The art world recently went NFT crazy when a digital piece of artwork by the artist Beeple sold at auction for nearly £50 million. The music industry is now turning a keen eye towards the possibilities of NFT’s, as musicians like Grimes, The Weeknd, Mike Shinoda of LINKIN PARK and Kings Of Leon are getting involved.
What kind of impact will NFT’s have on artists and musicians in the future, and what kind of NFT should you use? In this blog we’ll tell you everything you need to know including:
- – What is an NFT?
- – How is the music industry using NFT’s?
- – What impact will NFT’s have on the music industry?
- – Are there any concerns with NFTs?
What is an NFT?
NFT is an abbreviation for “Non-Fungible Token”. In other words, it’s a token for something that doesn’t physically exist in the real world. An NFT gives you ownership of digital content, by providing a record of ownership using “blockchain” technology. NFT’s use crypto assets (virtual currency) such as Bitcoin, to provide a certificate of ownership of the content that cannot be duplicated. Think of it as a digital certificate of authenticity. NFT’s makes it possible to add value to things that exist on the internet.
How is the music industry using NFT’s?
In February 2021, electronic artist Grimes exhibited a collection (known as a drop) to Nifty Gateway, a digital art market in the United States, for a limited time of 48 hours, and sold millions worth of art.
Since February 2021, Mike Shinoda, a member of Linkin Park, has started an experimental auction of music works published in NFT format on the platform “Zora” where you can buy and sell NFTs.
Attempts to sell rare and valuable content on NFT trading platforms have also recently been made by The Weeknd and Aphex Twin, but the US rock band Kings Of Leon were the first to offer their album itself as an NFT. In March 2021 their new album was released as an NFT that included download links alongside artwork and additional benefits such as VIP seats for upcoming concerts. While an NFT doesn’t actually exist, it can be a token that you can ‘exchange’ for something real like a vinyl, or concert tickets.
What impact will NFT’s have on the music industry?
As mentioned above, NFT’s are being used in various ways by artists, musicians, and creatives. So what will the impact and benefits be long term for artists like you? And how can you sell your music as an NFT?
First of all, NFT’s represent an entirely new ecosystem to sell creative works. Alongside physical vinyl and CDs, digital streaming like Spotify and Apple Music, artists now have NFT stores to sell all sorts of artistic endeavours.
Works that combine video and graphics with music have often been used as promotional materials in the past, but in the future, such works will also have irreplaceable value. Fans can ‘collect’ exclusive album artwork and promo material from your new album. As richer video techniques such as VR and AR expand, artists’ ability to create immersive digital experiences will increase the desirability of such videos. Perhaps your album won’t be released as mp3’s but as a soundtrack to a VR video sold as an NFT. The possibilities are endless.
Another way in which NFT’s can be used is as a crowdsourcing opportunity for young artists to directly engage with fans. The market determines the value of an NFT and as it grows in-demand so too will the price. When someone buys an NFT created by you they are directly investing in you. As you career skyrockets so too will the value of the NFT’s you sold in your early undiscovered days. Your NFT buyers become patrons to your art.
A final way in which NFT’s offer opportunity to musicians is the way they offer an NFTs ability to make a royalty on every transaction recorded. Imagine you created an exclusive record limited to 100 copies and sold for $10. Five years later those hard-to-find records are being sold on Ebay for $1000. If you sold the vinyl with an attached NFT you could ensure that for every time the record changed hands, you get a 10% cut as the creator. Nowadays, when a physical record is resold from one purchaser to another, there is no benefit to the creator, but in the case of NFTs, when such distribution occurs, it is possible to incorporate into the NFT itself a program that pays a part of the price generated at the time of resale to the creator.
Are there any concerns with NFTs?
NFT’s represent something in the digital world, so anyone can technically bootleg a copy of your creation. Artists will need to think about what kind of art they decide to publish. If you have a song on Spotify, you will get a royalty every time it’s played (and keep 100% of those royalties when you distribute with Spinnup). A song exclusively released as an NFT could easily get copied and downloaded without the purchase of the actual NFT.
In addition, there are currently no legal regulations or rules regarding NFT ownership and transactions, so problems may occur when dealing between sellers and purchasers.
When minting an NFT’s, it is expected that the majority of cases will go through reliable services in the near future, but since many services are appearing every day, the reliability and support of the services themselves is iffy. You will need to carefully weigh the costs and do some research before deciding which service to partner with.
The world of NFT’s is new and evolving every day. We hope it brings an exciting new marketplace for artists to sell creations and engage with their fans in a new way.
Stay tuned as Spinnup will keep you up to date with the all the latest music industry news and advice, including the changes NFT’s bring to the music industry. The music industry continues to change but, we will still continue to get your music onto the biggest platforms in the world so, make sure you sign up today to release your music.