Innovative Use case of NFTs in the Music Industry
Many experts believe NFTs will impact the future of music. NFTs are offered to the music industry with the prospect of higher profit when music artists face constraints on live performances and engagement with fans.
Music NFTs, as they are popularly called, are a much-needed introduction to an industry that currently faces a slew of issues.
The first and perhaps most significant of these issues is that of ownership. This question of ownership spills onto other areas of the overall lifespan of a track or album. It affects not only the artist but audiences as well.
Currently, an artist must work with a production company to record their tracks. They then release these tracks (or albums) under the production label, sharing their earnings with them. They must also pay for a presence on popular streaming platforms such as iTunes or Spotify. The Spotify Royalty Calculator, for instance, projects an average earning of $400 for every 100,000 streams which are well below the amount of marketing expenditure necessary to get there. For instance, the case of rapper Haleek Maul is a great showcase of how music NFTs can help artists monetize their work. We also look at how US rapper Tory Lanez got involved in the music NFT. The rapper, singer-songwriter, and producer launched his first NFT-based album titled “When It’s Dark” on August 10, 2021. Rolling out one million copies to the public, Tory Lanez sold all in just 60 seconds.
Audiences, purchasing a track through such platforms only buy the right to listen to that track, but ownership over it remains in the hands of the production label. This means that there are potentially millions of others around the world who also own that right concurrently, making it a redundant and dull experience for fans of an artist.
There is also the issue of reach and engagement for both artists and audiences. Stemming from the issue of platform subscriptions, the listening experience is marred by advertisements that serve as constant interruptions to audiences. Only by paying for a premium subscription can fans enjoy an uninterrupted experience.
Artists who are up and coming may also struggle with gaining any traction against more established names in the industry. They must then invest in marketing campaigns and efforts that once again prove expensive, serving up another portion of an already limited earning capacity.
Engagement also affects fans, with the current model relying heavily on an artist’s social media presence and other marketing channels. All of these issues have created the scope for the innovative use of NFTs in the music industry.
Innovations That Work:
Music NFTs are a great solution to the aforementioned problems, serving as a direct fix to the issues of ownership and engagement across the industry’s spectrum.
First of all, it is important to know how they work to properly understand their effectiveness.
The process begins, as with all entertainment products, with creation. An artist who has written and performed new track mints an NFT for it on a platform geared towards music NFTs. Such an NFT would be a single edition, popularly called a 1/1s. Artists could also mint NFTs for a whole album consisting of multiple tracks and associated artworks as a collection, which is known as 1/10s.
This NFT is now a unique, exclusive collectible that a fan could purchase through the associated platform once the artist releases it. One may wonder what the difference between buying a track on iTunes or an NFT platform is. The answer is that a streaming platform only provides a license to listen to that track or album. The NFT, however, gives the buyer exclusive ownership over that file and serves as a unique, distinct product associated with the artist.
Music NFTs are a great way for artists to profit from their work without paying a part of their earnings to a product label or a streaming platform. Once their music NFT is sold, they retain the money. They could also use the Smart Contracts feature to set up royalties every time the NFT is sold to another buyer!
Another important issue that is addressed by music NFTs is that of engagement. It is not only for music files but for tickets to live performances as well. They can also set up exclusive benefits for fans, making it a very engaging and enjoyable process. This allows them to garner more popularity and reach a wider audience through a simple process.
For fans, music NFTs give them ownership over the track in a way that production labels and streaming platforms cannot currently replicate. That may be set to change shortly, however, with the introduction of Music NFTs on DigiRack marketplace. More so considering that Spotify plans to integrate NFTs and Web3 into its services.
However, the industry does seem initially resistant to the disruptive changes that NFTs are bringing to the table. Many artists continue to rely on tried and tested methods of connecting with audiences and profiting from their work. Minting NFTs can also prove expensive, depending on the platform that the artist is using. Of Course with DigiRack it would be quite cheap which means artists get to keep almost every penny made from their Intellectual properties. Talk about giving power back to the artists.
It is evident that music NFTs are set to change the way we engage with our favorite artists and that further innovations can only strengthen their standing in the industry. It will be interesting to see how artists engage with the technology and profit from it. If NFTs and their various use cases are music to your ears, follow us on ;
