How does NFT define the future of music?

NEW YORK, NEW YORK - June 29: Artist Derrick Adams auctions off an NFT titled Heir to the Throne,... Source: GETTY IMAGES

In the first few months of 2021 and 2022, there has been a surge in interest and excitement about non-homogeneous tokens (NFTs). Today, digital tokens stored on the blockchain, NFTs that can record the ownership of items, have been developed for a wide range of items, from digital art to event tickets to real-world luxuries. The figures are jaw-dropping: NFT sales total $25 billion in 2021, compared to just $95 million in 2020. By 2022, the popular NFT peer-to-peer market Opensea's daily sales have reached an all-time high.

NFTs have the potential to disrupt many industries. As far as the old Yapi himself is concerned, all walks of life in the future society will be more or less linked to NFTs, and many experts expect NFTs to be particularly transformative in shaping the future of music. Songs, albums, music, lyrics, and soundtrack clips can all be NFTs. Last year, Kings of Leon became the first band to release an album in NFT form. Music can even be combined with digital art in jpeg or gif format to create a unique artwork that blends into the music. For example, Lostboy NFT is a popular music group that combines music and art while focusing on mental health. Since Smart NFTs can support multiple formats, music-related NFTs can be displayed in different ways depending on how they are accessed. For example, an audio NFT can contain a PDF resource containing the lyrics of a song or information about a musician that will be displayed when opened in text format.

As you delve into the capabilities of NFTs, NFTs seem ready to define the future of music.

Achieve fair remuneration

For decades, musicians didn't get paid fairly for their music. This is especially evident in the music industry. According to Fortune magazine, the usual income distribution is 50 to 50, with only 50% of the revenue going to the artist, and the rest being shared by agents, lawyers and distributors. The reality is even harsher for musicians who spread content through streaming services. Of Spotify's top 0.8 percent of artists, most earn less than $50,000 in streaming revenue.

NFTs have the potential to ensure that musicians are paid more equitably for their work. Consider the personal anecdote of Mike Shinoda of Lincoln Park, who raised about $11,000 for his own NFT. He explained on Twitter: "With NFTs, we can let the early numbers speak for themselves. Even if I upload the full version of the contained song to DSPs around the world (which I can still do), I won't get even close to $10,000 after deducting DSP, labeling, marketing, etc. ”

One of the biggest opportunities for musicians to get fair pay involves the secondary, tertiary and higher tiers of the NFT. Currently, creators tend to abdicate ownership of the platform in initial contracts and struggle to track where their content subsequently spreads. According to The Verge, a musician was owed up to $40,000 in song royalties after signing a contract with a large independent label, something they never expected.

With NFTs, however, musicians and other creators don't need to cede ownership of their content to the platform from the start. Although they can choose to give up the rights to a song or album when casting an NFT, they can also retain that ownership by baking it as an NFT. As a result, when musicians sell content, they can be compensated more fairly directly. If the NFT owner decides to resell the NFT, the original creator can automatically receive royalties – a process that can continue each time the NFT is sold. It's all thanks to the ownership records built into the NFT metadata.

Create greater potential for collaboration and mixing

Over the past decade, collaborations have become increasingly common in the music and entertainment industries. Today, artist collaboration is an iconic feature of modern pop culture. There's no denying the appeal of seeing two or more entertainers come together in new, creative ways.

We've seen NFT support new and exciting collaborations. Grammy-nominated DJ Steve Aoki recently released an NFT series in collaboration with digital artist Maciej Kuciara. As Kuciara reflects, "NFTs represent a new canvas for digital artists, allowing a new generation of artists to collaborate with talent from different industries and leave a lasting emotional impact on the viewer". With the NFT, musicians have the option to include royalty collection mechanisms in the NFT, which makes collaboration more profitable.

Closely related to collaboration is the mix. NFTs are also able to take advantage of the increasingly popular "mixing" culture, which encourages compositing or editing content to generate new ideas and derivatives. A popular example of a remix is "fan editing," such as a version of a music, movie, or artwork edited by a fan in order to add, remove, or enhance content to create something new.

Musicians and other creators can take advantage of "upgradable NFTs" to incentivize mixes in ways that benefit them. Digital agency Blue Manakin explains: "Upgradeable NFTs open up possibilities for more efficient music dissemination, without the need for intermediaries, and help create exclusive material, collaborations and mixes without the frequent legal issues."

An upgradable NFT is an NFT that evolves and mutates over time. For example, a musician may post soundtracks, choruses, or bridges that fans and collaborators can legally build on them, while bypassing the expensive legal process often involved in legally creating cover songs. With an upgradable NFT, original authors can retain control of derivative works and even profit from them.

Make the most of the demand for scarcity

The respected psychologist Robert Chardini is one of the leading figures in the field of influence strategy research. Chardini is known for his "Six Principles of Influence", one of which is scarcity. Cialdini's research shows that when the supply of products is limited, people think they are more attractive. In the music industry, scarcity has a long history of creating profits. The music industry thrives on unique and rare fan experiences, backstage passes, fan clubs, collectibles, and other scarce assets.

NFTs enable musicians to take advantage of scarcity attraction in new ways, while on the other hand, it enables fans to take advantage of new opportunities to build deeper connections with their favorite musicians. A recent survey by media company Variety asked the following question: "It's 2022. A film company released an NFT for your favorite movie clips. There are 1,000 copies of this NFT for sale. What is your desired price range? "

A full 20 percent of respondents believe the price range will be over $1,000. Getting exclusive, rare content gives a sense of excitement and appeal.

In NFTs, the opportunities for appealing to scarcity are limitless. Take Live Nation, the world's largest music event organizer, which recently announced the launch of Live Stubs-NFTs, which fans will get for free when they buy concert tickets. Michael Rapino, president and CEO, explained, "Our Live Stubs product brings back the nostalgia of collecting ticket stubs, while also providing artists with a new tool to deepen their relationships with fans, and we can't wait to see the creativity of this community grow." "Over time, Live Stubs and similar NFTs have become rare collectibles that can appreciate over time and can be legally resold.

NFTs have also contributed to other claims to the scarcity of the music industry. Canadian singer Shawn Mendes partnered with avatar technology company Genies to launch its own NFT. NFT launched on OpenSea and includes rare digital versions of his signature accessories, such as his Fender guitar and gold ring.

Drive the future of music with NFTs

NFT is more than just another popular acronym. As you take a closer look at NFT's value proposition — more fair pay, more collaboration and mixing, and a proven appeal to scarce resources — it seems poised to transform the music industry. The key is that NFTs are constantly reinventing themselves and developing creatively, just like the musicians they support.