NFTs Are Propelling the Future of Music
The following information regarding music NFTs is provided for educational purposes only and may not apply to your specific situation. We do not provide financial or investment advice.
Technology has always been a huge component of the music industry, dictating how we generate music and how we consume it. A music NFT, or non-fungible token, is a one-of-a-kind digital asset that exists on the blockchain and can be bought and sold. Whereas a conventional NFT is often just a visual element, a music NFT includes both a musical and a visual component.
NFTs are more than just another trendy acronym. When the value propositions of NFTs are closely examined—the potential for more equal pay, more collaborations and remixes, and time-tested scarcity appeals—NFTs appear set to change the music industry. The key will be for NFTs to constantly reinvent and creatively evolve, just like the musicians they support.
The openness of data ownership and accessibility is one of the advantages of holding an asset like an NFT on a blockchain. Because a blockchain is a decentralized system, anyone can join as long as they have a fast enough internet connection and enough money in their digital wallet to make the purchase. Cryptocurrency does not have the same norms and regulations as a centralized banking institution, but the blockchain’s transparency is self-regulating by design.
Money-making options for musicians have substantially dropped since the advent of streaming. As previously noted, NFTs treat music as a work of art, transforming it into a commodity that can be bought and sold in the same way that it could in the heyday of the music industry, via MP3s, CDs, cassette tapes, and vinyl albums. Music NFTs enable fans to invest in artists they like and believe in while (hopefully) profiting financially. In contrast, they let musicians to directly fund (or at least partially fund) their music projects through the assistance of their fans.
One of the most promising avenues for musicians to be appropriately compensated for their work is in secondary, tertiary, and higher-order marketplaces for NFTs. Currently, creators frequently cede ownership rights to platforms at the outset of a contract and have trouble tracking where their content is ultimately distributed. According to The Verge, one singer was owed up to $40,000 in song royalties after signing with a large independent label, which they never anticipated to receive.
However, with NFTs, musicians and other creators do not have to give up ownership of their content to platforms right away. Although they can opt to give up ownership of a song or album when minting an NFT, they can alternatively keep that ownership by baking it into the NFT. As a result, when musicians sell content, they may be reimbursed more directly and equitably. If an NFT owner decides to resell the NFT, the original developer can get royalties automatically—a process that can be repeated each time the NFT is sold. This is due to the fact that the NFT’s metadata includes a record of ownership.
This vision of the future may not be visually appealing, but it may be a step toward more equitable remuneration for certain performances. Most people’s first impression of NFTs is likely to be the whoosh of large quantities of money passing hands, but as this new technology evolves, it’ll be worth wading through the hype to hear what musicians do with it.