NFTS are Shaking up the Traditional Music Industry, Creating Transformative New Avenues for the Musical Experience

Historically, and traditionally, the music industry has been heavily reliant on royalties. While streaming does provide some recurring royalties for an artist, a physical record purchase usually results in a single, one-time payment to the musician, regardless of how many times the album is listened to. And if the record’s owner sells it, the royalty holder isn’t compensated again, making it difficult for most musicians to make a livelihood solely from their music. This is where Music NFTs come in, already disrupting the traditional music industry in several ways. The global NFT sales skyrocketed to $25 billion in 2021 from $95 million in 2020, holding incredible potential for musicians and artists testing the waters, all over the world.

What Do You Mean By Music NFTs?

A Music NFT is essentially a certificate of ownership for a unique audio or musical piece that may be bought or sold. NFTs use blockchain technology to provide incontrovertible proof of ownership, as well as a certificate of authenticity that can be verified at any moment. NFTs are stored in a distributed ledger, similar to crypto tokens, preventing attempts at counterfeiting or theft. Artists can claim full ownership of their music through NFTs, rather than sharing income with intermediaries such as music labels or lawyers.

And when it comes to the world of music, there are a number of different types of NFTs, each of which are transforming the established and conventional ways of listening to and experiencing music, in different ways.

How Music NFTs are Transforming the Domain

Many of us have dreamt of owning the very first vinyl release of our favourite song or album, our own pride and joy.Now, we can. Artists and musicians are increasingly turning to NFTs to interact with their fans by releasing unique songs and records. This is especially true for digital artwork and photos, which are also an important and popular medium of showcasing a musician’s talent and, to a degree, a source of monetary income. Limited edition record covers, posters, and unique behind-the-scenes shots from concerts are a few examples of digital artwork and pictures.

The growing popularity of NFTs has also led to new physical use cases, such as exclusive access to in-person bonuses, luxury items, and even concert tickets. An NFT ticket comes with a bonus that helps fight ticket fraud and can never be lost! What’s more, you can now purchase an NFT of a memorable moment from a performance, for instance, like the ‘NBA Topshot’ NFT video clips, and digitally display it in your house.

Last year, popular American rock band Kings of Leon earned over USD 2 million from the sale of their latest album ‘When You See Yourself’, released as an NFT, the first band to do so. Music producer 3lau, on the other hand,generated over USD 11.7 million from the 33 NFTs he put up for sale on the third anniversary of his album Ultraviolet, one of the biggest music NFT deals till date.

Music NFTs in Web 3.0

At the end of 2020, the global music industry had a staggering valuation of USD 21.6 billion, however, it is wrought with several issues, making it difficult for artists to sustain a living from the sale of their music alone. NFTs are especially valuable to independent musicians who are not signed to a music label, as they provide them entire control and ownership of their creations in the Web 3.0 era, where people create content which creates monetary income.

Reports state that only the top 1% of artists internationally receive 90% of revenue from the streaming of their music, while just 0.8% of the most famous and popular artists receive roughly USD 50,000 every year from streaming. With NFTs, musicians are not bound by streaming services because they can disseminate their music to the public individually. NFTs are paving a new road for independent musicians, giving them more options to diversify their revenue streams and develop exclusive content for their fans.

NFTs in the Existing Music Industry

People that buy music NFTs are usually not buying the rights to the audio or composition; instead, they are buying virtual bragging rights and supporting musicians who they believe are undervalued by the old system. NFTs not only allow artists to earn commission-free cash, but they also give them a lot of flexibility because they can auction any type of digital asset. This includes songs, whole albums, merchandise, concert tickets, and much more, giving artists greater leverage by providing an alternative means to monetise their creativity or other types of digital products.

However, despite this, big industrial companies have also been rapidly hopping aboard the NFT bandwagon. Warner Music Group, for example, has a collaboration with Genies, a firm that makes digital avatars and wearables. And Universal Music Group teamed up with the Bored Ape Yacht Club to form Kingship, a metaverse band.

The Role of NFTs In Its Future

With the way NFTs are disrupting various industries, we may soon see an era in which artists reclaim complete control of their work by bypassing middlemen such as music labels and streaming platforms to expose their music to the public on their own. Major actors in the music industry can also employ NFTs and comparable technology to form music collectives that release music in the metaverse.