Nonfungible tokens, or NFTs, experienced a meteoric rise in the mainstream media and popular culture in 2021; by now, everyone has heard of them. NFTs for independent musicians are a game changer, so in case you are unaware of what it is, allow me to explain briefly.
NFTs are among the digital assets kept on a blockchain. NFTs are the best type of storage for music, videos, and artwork because they are one-of-a-kind and cannot be duplicated. An artist can set the price for an NFT of their work when they create it. The NFT can be purchased by anyone, who will then own it forever and be free to do with it as they please.
As new NFT exchanges and drops continue to appear, top businessmen and media moguls such as Mark Cuban and Gary Vee support NFT usage strongly, and the part smart contracts will play in the near future. Did you know that NFT CryptoPunk serves as Jay-Z’s Twitter profile photo?
Let’s dive into the world of NFTs and how this technology can benefit your music career. Are NFTs a game changer for independent artists and musicians?
When Did NFTs Become a Thing?
Nonfungible tokens have been present since 2014, but it wasn’t until 2021 that we encountered NFTs in mainstream media.
According to experts, a variety of factors contributed to the explosive growth of NFTs in 2021, demonstrating the unpredictable life of new technologies. This is because the bull market in Bitcoin and Ethereum attracted a lot of new investors to the cryptocurrency market in 2021.
Who Can Create an NFT?
An NFT can be made by anyone, including artists, business owners, art supporters, organizations, authors, videographers, and social media personalities.
As long as a person can demonstrate that they legally created or own the content, they can mint an NFT without any prior experience.
NFTs and Music Industry
By giving independent artists a new way to make money and engage with fans, NFTs have the potential to change the game, and this kind of change is long overdue. We can easily say that the music industry is affected by NFTs in a significant yet underappreciated way.
Depending on your objectives as an artist, there are a number of reasons why you might want to use NFTs and music together. Artists can express gratitude to their supporters by providing fans exclusive access to digital assets.
NFTs can assist artists in monetizing their work in new ways; by selling NFTs of their songs or live performances, artists can make money straight from their fans.
Finally, given that both NFTs and music are hugely popular forms of entertainment, they go together perfectly. By combining the two, you can expand your audience, strengthen your brand and even make your music go viral. The following are some possibilities for making NFTs that are music-related:
- A song or an album
- Video content
- And much more
Photo by Markus Winkler from Pexels
NFTs are a Game Changer For Independent Artists and Musicians
NFTs have a few features that musicians find particularly appealing. First, from a financial standpoint, these tokens have been going for astronomically high prices. Millions of dollars have been raised from the sale of NFTs by A-list artists like Kings of Leon and Steve Aoki. But a surprising fact will blow your mind: even lesser-known artists have made tens of thousands of dollars from selling NFTs-artists such as Vérité and Zack Fox. For example, with only 27,000 followers on Instagram, artist Young and Sick sold an NFT for $865,000.
By selling their 2D and 3D works of art, visual artists in India have begun crossing over to the NFT metaverse. For example, a South Indian musician sold an NFT of a demo he had recorded for $200,000! However, there is potential in the NFT space, which needs to be explored further. A revolutionary opportunity for musicians, NFTs’ high value and distinctive rewards system is one you should definitely check out.
Earning from Streaming Platforms vs. NFTs
In the digital age, streaming platforms have been a significant source of income for musicians; during the COVID-19 pandemic, when live show revenue dwindled, this has only increased. But these platforms’ payout rates are still not very high. Spotify pays out between $0.003 to $0.005 per stream on average. For 1 million streams, that works out to roughly $3,000 to $5,000, but 1 million is a considerable number for an independent artist.
Only 13,400 artists on Spotify made more than $50,000 annually (the median wage for workers in the United States) as of 2020.
These figures show how NFTs are beginning to look like a viable business opportunity. If you sell a song or a collectible, you can make more money in one transaction than you could make throughout your entire career on a streaming platform. NFTs can also generate recurring income by being programmed to give the original creator 2.5% to 10% of each sale every time the token is resold. I must admit, that’s pretty cool.
NFT Artworks’ Benefits for Artists
When live concerts, a significant source of income for artists and their labels, were eliminated in the years 2020 and 2021 due to the COVID-19 pandemic, the music industry was turned upside down. Artists are searching for ways to connect with and create for their audiences as the world continues to be digital, and NFTs offer them a fresh outlet with a number of advantages.
Convenience is the first important benefit of NFTs. To access the content, fans only need to set up a digital wallet. They can then take part in an auction to win prizes. As a result, creating winning content is as simple as online shopping.
Authentic Experiences and Content
The items that artists want to auction off can be chosen with great freedom. These tokens may be digital or physical. Artists exchange NFT in the form of albums, digital art, concert tickets, and merchandise, among other things. Fans are excited to have access to these unique opportunities and are prepared to pay for the chance.
There Are No Mediators
The music business is rife with middlemen. Some of the money that fans spend when they buy an album, stream a song, or purchase merchandise actually goes to the artist. Still, a large portion of it goes to the record label or streaming service. Even when we purchase concert tickets, the same mediators are present, so while artists profit from ticket sales as well, record labels take a cut.
NFT transactions are direct transfers between the participants and represent a fundamental asset in the cryptocurrency exchange. The fan receives the content in their digital wallet, and the artist receives the payment.
The “unlockables” feature of NFTs, which essentially allows creators to include extra benefits within the contract of an NFT, is another benefit for musicians. These can consist of a one-on-one video chat with a fan, shoutouts, tangible goods, or even giving away a portion of the rights to a song. This particular instance is exceptional because music creators can now treat songs like equity investments by transferring 30% ownership of a song through an NFT. In addition to putting money in the artist’s pocket, this gives those who donate money a chance to see a real return on their investment.
Photo by ThisIsEngineering from Pexels
NFTs’ potential drawbacks
There are definitely people who will not benefit from the rise of NFTs, proving that not all change is positive.
It May Be Difficult for Emerging Artists
The market for a specific musician’s art drives the demand for a token. Acts that are well-known or established have no trouble putting up tokens for auction and attracting interested fans. This demand doesn’t exist yet for up-and-coming artists. However, as some of the examples demonstrate, it’s not impossible to make it big.
Some musicians have put their sample pack usage rights up for auction. To have total creative control, a fan buys the ownership of the samples. One type of token like this one could land the musician in legal trouble in the future.
When a well-known musician works with a record label, they frequently consent to a contract. To avoid breaking any of these contracts, the artist must be careful as they design and distribute tokens.
As you can see, NFTs are a game changer for independent artists and musicians in the digital age. With their high value and unique rewards system, NFTs offer musicians a revolutionary and incredibly alluring opportunity. In past years, we saw the meteoric rise of their usage. An NFT asset could be a piece of digital art, a collectible, a musically inspired extrapolation, a combination of all three, or a wholly original and unheard-of composition. By modifying NFTs in fresh and creative ways, creators continue to push the limits of creativity.
To all independent artists and musicians: don’t forget that help comes from our side, too! By connecting you with some incredible Spotify playlist curators, SoundCampaign can assist you in promoting your music on the streaming platform. We are here to make your music stand out among many potential listeners and help you create an income while connecting with fans worldwide!