The year is 2022, and whether or not you gave permission the internet has bombarded you with either NFT or crypto related content. The world is changing and there’s good reason for it too. An emerging technology turning over billions is bound to draw some attention. Right?
So what the hell are NFT’s? Do they have fried chicken? Don Jazzy spent how much on a what? Bored ape? Over $300,000?? On a picture?? If you’re completely confused wtf is going on you’ve come to the right place. If you’re an artist, producer, digital designer, or a content creator, this is also for you. Now how does the average Joe enter this space? With so much money moving around of course he wants to know what’s up. Well, if you’re like Joe this is definitely for you, in non technical terms I’ll unpack the mystery of NFTs, and how it’s disrupting the creative space; with music as a focus.
Stick around, you might enjoy yourself.
What are NFT’s?
An NFT or “Non Fungible Token” is a digital certificate of ownership.
Essentially a unique stamp that can’t be duplicated. NFT’s are built on blockchain technology, a self validating digital ledger that stores data. Blockchains are interesting because they’re impossibly difficult to hack yet ridiculously easy to integrate into a variety of uses. NFTs are one of these uses. You can make anything an NFT; pictures, songs, videos, documents, whatever can be digitally rendered into software can be minted as an NFT. Forever. Minting a song into an NFT attaches an infallible code, it becomes more than just a song but a valuable collectible. Mint a song into 10 NFT and there will always only be 10 NFT. Think of them like autographs, minting an Nft is basically just signing an autograph, except that autograph can never be duplicated. Trust me, people have tried. So why are they so appealing in the art and tech space? First because NFT’s create a medium for creatives to authenticate their work. NFTs create value using the appeal of exclusivity. For context, gold is valuable not only for its shiny color but its scarcity too. Bitcoin for its limited supply. NFT for its exclusivity.
What’s all the fuss about?
So why are NFT’s such a big deal in the creative space today?? To answer that let’s take another walk down memory lane.
Remember when artists sold cd’s of their music? In peak 1997-2000, as an independent artist Joe would have to physically promote and distribute his songs to gain any relevance. And to “make ends meet” Joe better be ready for ground work. Label companies and distributors could help speed the process though for a piece of the pie. A very sweet piece. Two decades later and that model changed with the rise of the internet. An independent artist could theoretically promote and distribute his music from the couch, simply uploading the audio to a DSP (Digital streaming platform). Of course there’s the mind numbing work of promoting independently but it’s been done before. It’s not impossible right? But see this small victory is short lived, DSP conversion rates are horrible and if it weren’t for the unimpressive rates per stream maybe just maybe the majority of independent artists wouldn’t starve for our entertainment. Maybe Joe could finally afford that new mic and record more songs.
It’s safe to say artists suffer under the current model as well, with songs raking millions of plays only pulling a couple hundred dollars every now and then. Worse still if Joe was signed a 360 deal with a label…they’d be entitled to split even that too. The current model is flawed.
But this is where NFT’s shine! For the past decade artists and creatives in general have endured the inequitable monetization techniques of the day but over the last two years NFTs have blown out of water. Unlike the traditional model, where middlemen, labels and DSPs charge Joe an arm and two legs to manage everything from promotion to distribution, now Joe can create NFT’s of his next project for sale to his biggest, most dedicated fans. Completely exclusive. NFT’s also allow Joe program royalty deductions from every ‘resale’ of his NFT, so royalties are a non issue. After much research, trial and error, Joe’s finally found a new revenue stream to earn on his craft, directly from his fans.
In real time, contemporary artists have blazed into this foray, and much like everything else fortune favors the bold. Late last year, an unreleased Whitney Houston song sold for a $999,999. Canadian artist Grimes raised $7 million selling her music as NFTs in February 2022. Another artist, 3LAU made over $11 million selling his album as a single collection of 33 NFT. Closer to home, Bnxn’s collectibles; “Heads by Bnxn” are having a good run. Rema only a week ago also indicated interest in making his coming project available as an NFT although we’re yet to see that happen. Music veteran Akon has also ditched the traditional model to independently release his next project as NFTs.
The list goes on but that boys and girls is the utility of music NFTs.
Artists finally enjoy complete creative autonomy over production and distribution of their craft. With NFTs an artists can also package a range of uses into their exclusive collectibles. Trey Songz released a collection of collectibles that features exclusive music with exciting rewards attached. Minting a Bnxn Head NFT automatically makes you eligible to win a trip on tour with Bnxn. Concert tickets, private performances, personal interviews, VIP tour access, whatever.
An artist could integrate a percentage of the song masters into their NFT, that way fans also get to own the songs (by a small percentage) via their NFT holdings. In theory, this community of holders can influence the direction of the specific project, themes, number of tracks and even feature on or remix the song in question. NFTs brings deeper meaning to fan relations and interaction.
What’s It To Me?
Now although it’s great news for Joe; the crypto innovation brings ease to a difficult process. What’s on the other side of this non fungible coin? Why should anyone want to spend money on NFTs? First, there’s the natural inclination to support an artist you love and believe in. There’s currently nothing more depicting of that love than buying their NFTs. Also NFTs are a valuable investment, like limited edition gold watches and other status pieces, the rarity of these exclusive collectibles make them a valuable digital asset to hold and resell.
Creative packages like these are only the beginning. With NFTs an artist can tokenize whatever, utilize every aspect of their craft and enjoy a deeper relationship with their fans. Sky’s the limit. Lucrative as it seems though, not every artist is gonna make millions in a heartbeat selling NFTs. However the standing recipe for the most successful mints however indicate one thing; the secret ingredients are rarity & community. Bnxn’s fan base of over 7 thousand strong raised $1.2 million buying “Heads by Bnxn” collectibles. For that kind of big break an artist must prioritize community building, the more involved the artist and his fans, the more likely his NFTs will take off. Many times those rules are thrown out the window, but in that there’s at least some precedent. The other factor that influences an NFT’s value is clout (you read right). One famous person acquiring an NFT almost instantly ignites FOMO (fear of missing out) among prospective investors to buy out an artists collection.
So where does it all lead you ask? Truth is no one knows exactly. Pragmatists dub NFTs as only a byproduct of the crypto bubble, a disruption to the creative industry at best. Optimists and fiction novels predict we may be living in a fully NFT world sooner than later. Imagine attending a pre recorded virtual Wizkid concert every time you run your 1/1000 Wizzy NFT. Maybe the future sits snug in the middle of those projections, but the rule of thumb is to be prepared.
As the NFT wave gains momentum it’s important to understand that like all investments, crypto is volatile and NFT’s are no different. Artists and fans interested in the space must thoroughly understand the technicalities involved so they don’t get burned and lose money. ALWAYS DO YOUR OWN RESEARCH. To reiterate, be cautious. But if you’re like Joe, unfazed and freshly inspired by the bubbling potential of a new frontier, you’d best buckle up and enjoy the ride. Cheers.