(Non-Fungible Tokens) NFTs are the new buzzword in the music industry in 2021. But what value will it actually bring to artists and fans?
The music industry has fundamentally changed since the arrival of music streaming. Today, billions of listeners have access to streaming services like Spotify and Apple Music. Streaming is by far the biggest source of revenue for recorded music.
The global music streaming market is expected to reach $23 billion in 2021 and is expected to grow by $7 billion between 2021 and 2025. A small number of centralized streaming platforms still dominate the market and major labels are focusing on the absolute top of the list. artists.
At the same time, growth is driven by independent artists. It’s never been easier to produce and distribute your music. However, the competition is fierce.
More than 60,000 songs are released every day, according to Spotify. Talent and good music are always necessary for success, but that’s not enough to cut through the noise. Hard work, proper tools, and capital to invest in your career are also required.
To thrive as an independent artist today, you must ensure your own success, building your audience as you grow. The need for decentralized financing and promotion solutions, as well as new revenue streams, is growing.
Benefits for artists
An NFT is digital proof of ownership, with every action performed on it stored as a record in an immutable blockchain ledger. One of the main characteristics of non-fungible tokens is their uniqueness. There cannot be two identical NFTs.
Another is their versatility. Using smart contracts, NFTs can be programmed to perform specific automated actions. These allow the creator to exclude the middleman in many scenarios.
For example, receiving a predefined share of any resale. This is one of the reasons for their appeal to the modern artist.
Musical artists have the ability to provide the key components of a valuable NFT. They are collectibles, similar to the original vinyl pressings, and they can provide larger-than-life experiences, such as behind the scenes.
Music has always been visual, which has been the main ingredient of the NFTs we’ve seen so far. Exploring early audio NFTs will now be an exciting opportunity for creatives.
NFT risk management
Although cryptocurrencies and NFTs are potentially risky new technological spaces, there is no reason not to experiment with them. Some artists are already making hundreds of thousands selling their tokenized art, while others are nowhere near that level of profit.
Risks can be mitigated by working with experienced partners like an NFT agency or distributor. The right partners will help build and market the asset and support artists throughout the process.
With NFTs, fans win too
NFTs are also changing the way artists interact with fans. Not only will fans be ready to support their favorite creators in new ways, but the creator can also offer various NFT-specific perks.
Virtually anything can be symbolized. Pieces of music, digital artwork, pieces of text, apps, files, and even actual physical objects — like concert tickets or unique merchandise — can all come with their own NFTs. Thus, allowing artists and content creators to offer new experiences to their fan base.
Of course, NFTs are still in their infancy, but as technology improves, they will reach the masses. That said, NFTs offer real benefits to artists and fans alike. So while people outside of the crypto space may not yet feel the need for NFT, they should keep an eye out for this fledgling technology.
NFTs have the potential to be a game-changer for the next generation of musical artists. This will provide new opportunities for artists to monetize music on top of streaming royalties, but it will also be a tool that will help artists build closer relationships with their core fans.
Who knows, but NFTs could potentially become as important to Gen Z as music videos were during the heyday of MTV in the 90s.
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