It has been said that the Internet was going to save music as it directly connects artists to their fans, creates communities around art, let musicians take control of their music and make a better living while they are still a part of music industry. The Internet actually made it possible for both artists and fans to have alternative connections.
New points of distribution, such as Napster, iTunes, etc., found a way to expand the distribution on music industry and also gain more profit from selling music art to fans in favor of themselves. Recently, artists in music industry receive a mall share of incomes from the sales or stream of their music, where the main profits go to middlemen corporations. Therefore, artists preferred to take tours to support themselves and earn more money. However, due to Covid-19 pandemic, artists had to cancel their touring plans which left them no incomes! Then, everyone in music industry was obsessed with NFTs, non-fungible tokens.
With the introduction of blockchain technology, a digital way to record information which could not be erased or changes but is transferred, the opportunity was made to create an original piece of art that was limited in number and easily signed by the artist. An NFT should be considered as the first edition of a book signed by the author which comes in limited number, which makes it really precious! Also, such signature allows only the original owner to sell the asset. Now, take the signature on original art into digital form. Now the original owner may gain more profit selling their digital assets directly to buyers with no middlemen. That is way musicians got interested in NFT markets.
Similar to fine art, games and sports in NFT markets, music is finding its place in the market as the White hot DJ/EDM/remixer sold $11.6 million of NFTs already, and very recently Kings of Leon turned to the first major artist to release a recording as an NFT. Steve Aoki, the DJ/dance artist, also sold $4.25 million of NFTs this month. All these artists mostly sold short music videos and digital collectible versions of a record and fan experiences which get their value from the artists.
Though, more important than promising money-making from NFTs is the gap between the value music brings to people lives and the price they pay for it, which has been kept low to artists by music industry. In this regard, RAC, an electronic pop artist who is a pioneer in the NFT world, mentions that play counts are not good measures of value for an artist or art since they may offer tremendous value to audiences though experience no increase in price. So, a song which may change your mood or feelings is sure worth a better price.
It seems that the promise comes finally true that the Internet empowers artists, and one way could be NFTs. NFTs seem to change the existing business industrial model through improving ownership contents, new ways of connecting to audiences and more.
Although NFTs have been around since late 2017, a few experimental musicians such as 3LAU and RAC were minting NFTs before the blossom of the markets. Though the music industry did not mainly get its share until last few months so that since 2021 musicians only earned $70.5 million in NFTs. Considering the current craze for NFTs and advertising new cases for NFTs, it seems that many musicians in the industry may rush to join the market quickly.
One of the most popular forms of NFTs has been audio-visual, a graphic paired with an audio recording; though these can easily become a copyright mess, as these sorts of NFTs likely contain the work of multiple artists (visual artists, songwriters, producers, etc.).
Dina LaPolt, an entertainment attorney and the founder of LaPolt Law, warns that since there are other owners and controllers [of copyright], this may cause some legal problems. Therefore, it is necessary to ask permission from each copyright holder involved and determine royalty splits for the NFT in advance to do this safely and legally or clearing the music within an audio-visual or even a simply audio-based NFT often becomes a lengthy, expensive process.
As the use of NFTs continues to grow in the music business, minting will become more apparent and legal. Record labels are already creating protocols to make more sense of the space. Now, when an artist clears the sound recording for an audio-visual NFT with a label, the company is able to treat it as a sync license which can develop some industry customs. Of course, with such customs come some regulation, but it will also provide some much-needed clarity, helping artists legally mint NFTs with security.
The potential of NFTs in the music industry
In addition to the collectibles and artistic pieces being currently offered by some artists, there are so many things that can be packaged as a collectible and sold as NFTs, including concert tickets, special access and private NFT holders-only performances, livestream interviews and shows, and limited-edition albums.
Therefore, different NFTs allow fans to own something directly from their favorite artist, where it could be a concert ticket that shows undeniable proof of their attendance or a special limited-edition collectible. Coming directly from the artist and not a distribution platform, the NFT has a deeper meaning which also creates a much stronger artist-to-fan relationship.