We all know that the music industry is changing as we speak. Streaming platforms (Spotify, Apple Music), social media platforms like Instagram, and the internet overall have completely transformed how artists promote their music and how fans consume it.
Now, NFTs are poised to change everything again.
What is an NFT? It stands for “Non-Fungible Token”—and while that may not mean much to you right now, it could very well mean a lot to your favorite artists. An NFT is a unique digital asset with its own proof of ownership attached to it—like something you would buy on eBay, or a collectible baseball card. The difference is that an NFT can be just about anything: a piece of art, a song, an album cover, a video clip, or even an entire album.
A music NFT is a certificate of ownership of a musical piece and unique audio. They provide undeniable proof of ownership over a blockchain technology. Having a certificate of authenticity that can be validated at any time provides new monetization avenues for artists.
Music NFTs come in the following forms;
Digital artwork and photos: This could include posters, album covers and exclusive behind the scenes content.
Tickets for gigs: The rising popularity of NTFs has resulted in novel use cases such as concert tickets, in-person tickets and in-person tickets. NFTs can help you to combat the threat posed by ticket fraud.
Producers can also sell their beats as music NFTs. The immutability of NFTs means that end users can purchase these end-beats and use them forever. They can also resell them at a profit.
There is a limitless potential for the monetization of NFTs as it is still in early days and it remains unclear how far the technology will transform the music industry. Electronic musician 3LAU has sold about $12 million in music NFTs and Ozuna has released a catalogue valued at about 1 million dollars.
Artists can integrate royalties into the contract, allowing them to earn residual income from their work.
Video clips from your favorite performances: You can immortalize moments that were special to you-and your fans-creating new avenues for capitalizing on your brand.
The most important utility is that NFTs are giving creatives power and control over their music. As more creatives seek to earn more from their work, NFTs have emerged as one potent tool that would allow them to realize this goal.
They allow them to verify the originality of their work and thus allows them to negotiate for value with others.
Leveraging some events such as NFT airdrops could enable creatives to reach a new audience.
Musicians can also leverage new brand experiences such as allowing their fans the opportunity to interact with them virtually or physically.
Mostly, the people who buy music NFTs are not interested in having a possession just for the sake of it. They want to have bragging rights-this means you have to one build a brand with a loyal following-and also create NFTs that are worth having.
Warner Music Group, in partnership with Genies-a company that creates wearables and digital avatars-has ventured into this category. Universal Music Group has also ventured into the monetization of NFTs.
What does this tell you?
There is some value and opportunity in this wild west. But to navigate it well, you must find the right partner that will allow you to succeed. You must be strategic in how you leverage these technologies.
Like everything, the devil is in the details. Know that music NFTs are not a get rich quick scheme kind of thing. You can only make bank if you create great music, build a fan base and identify strategic ways to monetize it in ways that enhance the value of your brand and bring you closer to your fans.
This space has high barriers of entry as it requires that you are tech-savvy, extroverted and have the ability to innovate and create content that is aligned with evolving consumer needs.
NFTs are providing opportunities for ensuring that some artists are able to reclaim ownership of their work in ways that allow them to benefit as much as they can.
Whether music NFTs will become a big segment remains to be seen, but based on current trends there is all reasons to believe that this will become an important part of the industry and will benefit from increased angst among creatives towards traditional models that have milked them dry.
Ultimately, the long-term success of an artist is based on their ability to earn the loyalty of fans-ask the Beyhive and Rihanna’s army. NFTs could provide a medium for strengthening your relationship with fans, while allowing you to benefit more from your work.