The music industry is not without its flaws. It’s time for changes to be made that improve the experience of those at the centre of it all – artists & fans. How exactly can NFTs bring about this change?
It’s all too easy to get stuck doing things in the same old way. We become accustomed to certain things, whether good or bad, and struggle to progress or change. That’s because getting comfortable is, well, comfortable. It’s no differnet when it comes to the music industry, but it is time for change.
Why are we saying all this?
It’s no secret that NFTs have been a contentious topic in recent years. The negative impact on the environment due to power hungry blockchains has been an underdtandable cause for concern. But, it is possible to have environmetnally friendly NFTs.
Solana is a blockchain that uses the Proof of Stake consensus mechanism. This requires far less computational power to run it, and draws from greener energy sources. This is just one of the many reasons Fractis is built on the Solana blockchain!
NFTs have also come under fire as being a waste of money, and branded as vain and show-offy. In some cases, this is sort of fair to say. However, there is a difference between non-productive and productive NFTs. Basically, some NFTs are just for bragging rights, and others have real value.
People have been resistant to NFTs, but the music industry has its problems too. Because they’re such ingrained and old problems, a lot of people simply accept them. We’re referring to things like artists not being paid properly for sales or streams, as well as having control over their art taken away from them.
Why should major music industry problems carry on, and misunderstood NFT problems stop them in their tracks?
We’re going to exlpain how NFTs can benefit artists and fans, and change the music industry for the better.
Revenue Goes Directly to Artists
When an artist releases any music or work of any kind, there will be lots of other people involved. These people include record labels, publishing companies, the list goes on. Before the artist sees any money for their work, a large cut will go to these other people first.
In fact, it’s estimated that only around 50% of revenue ends up going to the artist.
In the case of releasing works as NFTs, revenue goes straight to the artist. Because transactions on the blockchain are direct and quick, there’s no need for a middle man. An artist can set up the sale themselves, and receive payment directly in their wallet from paying fans.
Doing things this way promotes a level of transparency and control that is rarely enjoyed within the current music industry.
Fans Enjoy Bonus Perks
Kings of Leon were among the first artists to release musical works as NFTs. Whilst their album, When You See Yourself, was available for sale as normal, fans could purchase the NFT version and receive bonus extras. The band offered the album as three types of NFT, each with a different level of perks. One included an automatic entry for a competition to win a concert ticket of theirs.
Artists can be creative with the perks they attach to NFTs. Offering things in addition to music makes fans feel appreciated for their support, strengthening the connection between artist and fan.
On top of this, attractive extras encourages fans to purchase the NFTs, helping the artist to receive that all important direct revenue.
Royalties NFTs Create New Revenue Streams
The music industry is very much run by a handful of large and powerful companies. Record labels largely dictate how much artists get paid. Depending on the initial deal struck, an artist could be locked into a less than ideal contract for a much longer time than they’d like.
NFTs pose an opportunity for artists to create a new revenue stream that record companies can’t touch. Equally, NFTs open up the same possibilities for independent artists who handle everything themselves.
By selling a fraction of their streaming royalties as NFTs, artists get instant revenue, but can also benefit from passive income later down the line. Should a fan wish to resell an NFT they bought, the original artists will get a percentage of the resale revenue – that’s how it works on Fractis, anyway.
Fans Can Invest in Music They Love
The music industry wouldn’t exist without dedicated and devoted fans. Any business needs customers, and music lovers ensure that making music is a viable career for passionate artists.
NFTs make it possible for fans to be even more involved in the industry – by investing directly in it. Of course, people invest in the music they love, and the industry, when they buy a record or tickets to a gig. But, again, this doesn’t go just to the artist, and so the investment isn’t as direct.
Purchasing royalty shares as NFTs means fans can give directly to the artist, and really feel responsible for helping them continue on their musical journey.
Besides personally set up crowd funders, there simply isn’t anything else out there currently that enables fans to get so closely involved.
Not only do music lovers get to feel like a vital component in their favourite aritsts’ career progression, they also get to become collectors. Buying NFTs and holding onto them lets people potentially make a profit in the future. Just like old-fashioned A&R, fans can bet on an artist or act that they feel is going to make it big. If they’re right, the NFTs they invested in could gain in value, making some serious profit.
Whilst it might sound like music NFTs have a lot to do with financial benefits, the important thing they represent is control.
Yes, music NFTs are a commodity, but they’re a commodity that benefits both buyer and seller in an ongoing way. These digital tokens have the capacity to put ownership and power back into the hands of artists, rather than leaving it in the paws of fat cats.
By enabling fans to connect more deeply with their favourite musicians, a healthier ecosystem within the music industry is created. It is one of accountability, traceability, and support.
Making NFTs a common part of the music industry would ensure vastly improved experiences for new artists. It would also result in much greater opportunities for growth for artists both new and seasoned.
This technology is still relatively new, and doubtless will continue to develop and change in the coming years. To keep up to date with the needs, wants, and lives of those who keep the industry afloat – the artists and fans – the music industry, too, needs to develop and change.
If embracing a new music inductry sounds good to you, sign up to Fractis now!