- Music NFTs are participating in increasing the excitement for space exploration.
- NFTs balance out the financial tension between musicians and distribution companies or streaming services
- Digital music streams have grown during the Covid-19 pandemic while musicians’ shares remained the same
- Musicians can boost their earnings by promoting music scarcity through NFTs.
The affordances of NFTs are becoming increasingly acknowledged across the creative sector after the speculative “bubble” burst. Mainstream media discourse often compares NFTs to collector’s items. In the digital space, NFTs are one instrument of blockchain technology that help society inch closer to complete independence from intermediaries. In the music industry, the NFT music revolution increases the financial opportunities given to musicians by shifting the power to the artist.
The Televised Music Revolution
Web 2.0 platforms have once again reshaped the music industry just as the digital revolution made music more accessible when CDs and WAV files replaced analog devices. Platforms such as Soundcloud or Spotify expanded the music industry’s exposure metric by facilitating easier, equal access for musicians. Despite that, the revenue of musicians remained minimal, with 2020 music sales plunging to $1.2 billion, reaching a low in the past 14 years.
NFTs stampeded existing market norms and grew in conformity with musicians’ demands. With musician’s rights being the equivalent of an artist’s creativity, artists demanded new ways of monetizing their creations without giving in to the pressures of intermediaries. Thus, NFTs are empowering musicians of all calibers by giving them the much demanded “economic clout” in the new internet iteration.
By 2027, the blockchain value could surpass $27 million, with the music industry joining the decentralized revolution. 3LAU is the first musician to sell his music as an NFT, with Kings Of Leon following suit and offering additional perks to their listeners. What’s more, is that content dissipation induced NFTs to every corner of the world. However, Kimberly Parker highlights, not all NFT artists are “chasing in” on the revolution, as the average number is “skewed by a handful of enormous sales.”
Scarcity adds value to one’s asset, as is the case of non-music-related platforms like OnlyFans. As data shows, only 1% of top creators are making 33% off, making smaller creators worry. Big artists are also joining the NFT music craze to cash in on the scarcity, showing similarities with other networks where influential personalities decrease creator’s luck chances.
Will It Last Forever?
Artistic scarcity is a powerful consumer determinant, and music NFTs unlock new marketing opportunities for musicians. Pitchfork notes NFTs, regardless of the creative sector, are “luxuries for the wealthy,” with one NFT selling for $69 million recently. Grimes sold an NFT containing digital art for $6 million, reemphasizing the luxurious appeal of NFTs.
Their scarcity and speculative nature fuel the current high prices of NFTs. Data from shows NFT sales have decreased; however, cheaper NFT sales are overtaking high-ticketed sales.
Moreover, NFTs add continuous value to the creator. Artists can obtain a constant source of income by condition and receive anywhere between 2% to 10% anytime their token is resold. In contrast to the payout offered by streaming platforms, musicians can increase their revenue by providing exclusive access and part ownership to their content. In that regard, NFTs fuel another form of revolution: driving ownership monetization among creative agents.
Conditioned By The Environment
Blockchain technology has come under increased scrutiny as regulators strive to regain control of the virtual space. NFTs, ICOs, and DeFi have all contributed to the growth of the network while indirectly putting the industry under a microscope.
Chinese regulators have intensified their control of the nation’s cyberspace. During the recent technology pressure, country-controlled outlet Economic Information Daily noted gaming is tantamount to “electronic drugs,” criticizing Honor of Kings, Tencent’s flagship game. Tencent, who bought additional shares in gaming companies such as Epic Games or outright rights to Riot Games, incurred a loss of 10% with others.
Tencent’s digital music division, Tencent Music Entertainment (TME), is set to launch its own NFT service. However, given the regulatory clampdown in China, the promise of retaining ownership for Chinese users could be a distant reality.