Our deep dive series aims to provide in-depth analysis on important trends happening in the NFT space.
This week’s article was written by community contributor @doublew0rdscore
The Opening Act: the Introduction of Music on the Blockchain
It’s somewhat fitting that on the eve of the Grammys Award Show, a celebration of music and performance, electronic music producer 3LAU combined with Slimesunday for a historic collaboration of their own by breaking Nifty Gateway’s record for a single NFT sale.
Eccentric T-Mobile CEO John Legere topped all competitors with a stunning $1.33M bid and won a package featuring a full length music video of a previously unreleased song with an interesting perk: the ability to name the song itself. Artists like 3LAU have paved the way for mainstream NFT adoption by creating awareness for digital ownership of music and encouraging a seamless integration between NFTs and the music industry.
Perhaps the most powerful and compelling use case of NFTs in this space is the ability for musicians to interact directly with consumers, with provable ownership and transparency. The traditional music industry is littered with a bounty of middlemen, from record labels to distribution platforms to payment processors to streaming services to marketing & management personnel. Income from albums, touring, & merchandise is often significantly diluted by the time it reaches the artist. This inefficiency is problematic for both the artist and the fans trying to support them.
Because NFTs alter the fundamental structure of the music industry, artists can experiment with different ownership and distribution models with its fans. Rather than a limited release, Kings of Leon recently opted for an open edition NFT package on OpenSea that provides buyers with digital ownership of their latest album as well as voucher redeemable for a vinyl.
While the NFT integration with the music industry is still nascent, there are many creative avenues to explore. In the near future, NFTs could be used as redeemable vouchers for merchandise & collectibles, provide exclusive or limited edition music content, or serve as special access passes for online or in-person performances. The most ambitious, forward thinking musicians may even fractionalize future album sales or touring revenue, and create their own mini-economy.
Further, musicians that create NFTs provide fans with a higher quality experience, more meaningful engagement, and in return, fans can show support for the artist in a more direct manner. SEEN HAUS recently dropped an exclusive track with MADGRRL; the winner of the auction had been an ardent supporter who had seen the artist perform at EDC 2019.
Platforms like SEEN HAUS also encourage the artists to become members of the community, where they regularly chat with fans on their official Telegram and Discord. Through conversation, fans are often afforded a rare glimpse into the perspectives of the artist, providing a memorable and enriching experience.
NFTs on the blockchain provide musicians the freedom of expression and complete control of its dissemination. They can now make choices that benefit themselves and their supporters, not the record labels or the businessmen. The pandemic has hit the music industry hard and artists that rely on touring revenue have been particularly hurt.
The silver lining is that artists have accelerated the transition into NFTs and the unprecedented demand will attract more and more musicians. Steve Aoki has lined up auctions on Nifty Gateway, and Modestep has a planned package featuring both physical and digital work for SEEN HAUS. This year, there will not be an award at the Grammys for best music NFT. But what about next year? It’s not so crazy, is it?