NFTs for the music industry: protecting musicians’ incomes
Over the past few decades, people have believed that the Internet will save the music industry. Indeed, switching to the digital environment has helped artists communicate directly with fans, create diverse communities, submit their music to popular platforms, and ultimately make money.
Although the Internet could provide the creators with a distinct alternative for getting income, unexpectedly, music streaming technology has dramatically brought down the cost of musicians’ art.
To resolve this pitfall, another innovation comes to the rescue of the entire music industry — blockchain and, in particular, non-fungible tokens (NFTs). So, let’s discover how NFTs and music form a fantastic combo!
NFTs for the music industry: what do you know about it?
What does NFT stand for in music? The big boom in non-fungible token sales has sparked a gold rush in the music industry that could be a lifejacket for artists economically hit by the streaming era.
In short, NFT is a digital asset that gives owners the right to store various real-world items such as art, tickets, or even music. In addition, NFTs are also used to prove ownership of a particular piece of music, artwork or to provide secure access to live performances.
Thus, an NFT is something like a digital certificate of authenticity or proof of your ownership of digital work. Its main difference from a regular electronic ticket is that it’s impossible to copy.
In other words, artists can make money by selling their “merchandise” directly to fans rather than streaming. Also, some platforms offer artists their share of any artwork sales on the market after the initial deal.
NFTs rely on blockchain, the same energy-intensive technology that underlies bitcoin and other cryptocurrencies. Thanks to using blockchain in music, artists can earn royalties, and record companies pay people who’ve supported songs and albums.
NFTs for musicians: key benefits and possibilities
Due to the rapid spread of the coronavirus and consequential global lockdown, 2020 became an extremely challenging year for everyone. The music industry wasn’t an exception. Artists and labels lost their significant income due to the cancelled live concerts.
Luckily, with the prosperity of digital space, musicians can freely share their art with the public online. With the use of NFT, they can not only protect their incomes but also get numerous beneficial opportunities:
Convenience
One of the main advantages of using NFT in music is the convenience of transactions. The fans create digital wallets to purchase content and can try their luck by participating in contests.
No intermediaries
Unfortunately, the music industry has many middlemen. For example, when you buy an album, stream a song, or purchase merchandise, the artist gets only a small share of your money. Most of the income goes directly to the record company or streaming platform. Intermediaries are also involved in live concerts, taking a share from the money earned on tickets.
To resolve this issue, NFTs provide the ability to conduct direct transfers between consumers and artists. In other words, you buy a song or album, your favorite artist directly gets paid, and you receive the content in your digital wallet.
Here, at DEIP, we also strive to support the musicians with the power of innovative technology. Our unique digital platform allows songwriters to share a percentage of a song’s royalty for royalty-based funding. The marketplace is based on blockchain to exclude intermediaries so that creators get complete value from their work.
Additional income through the auctions
Artists are free to choose the items they would like to auction off. These tokens can be both digital and physical. For example, albums, sound bites, merchandise, or concert tickets are all forms of NFT that artists can sell. The loyal fans dream about receiving these celebrities’ items and are eager to pay for them.
That’s how, in 2020, Deadmau5 was selling NFT for virtual stickers. What’s more, a DJ and music producer, 3LAU has made nearly $11.5 million, while DJ Steve Aoki raised $ 4.1 million thanks to the NFT technology.
Profitable resale
The underlying blockchain technology, smart contract, sets out all the transaction details. With its help, you can easily find out who exactly will earn and the amount they will get from the sale of an NFT. For example, it could be 50% to an artist, 30% to a producer, and 20% to a graphic designer.
Smart contracts also determine how much money goes to the creator of the NFT in the event of a resale. For instance, you can sell NFTs for $10,000 and stipulate that you get about 20% of any resale. After that, if your buyer resells the NFT for $20,000, it will change hands for $100,000. As a result, you’ll earn about $34,000.
A great future with blockchain for musicians!
As we can see, blockchain and NFTs provide unique opportunities for artists to get deserved incomes and create new experiences for their fans. The creators have a chance to maximize their profits. The innovative technology is revealing its potential to revolutionize the music industry as the Internet did in its day. And it’s the right time to get protected royalties!
