How NFTs are taking off music industry

Posted By : Krishna Kumar | 23-Dec-2021

In industries where organizations such as record companies and streaming services account for a significant portion of a music artist's revenue, non-fungible tokens (NFTs) are increasingly being used as a new, independent source of income for musicians. Music-focused NFTs offers new opportunities for artists to become independent (indie) and monetize their work on the blockchain without a third party.

Blockchain for Artists:

Non-Fungible Tokens (NFTs) give creators the ability to benefit from their work in unprecedented ways. Whether it's the art world or the music industry, the creative industry is burdened with brokers and intermediaries who divert huge portions of artist profits in exchange for distribution, marketing, or access to scale. Whether it's an art auction house or a record label, NFTs offer a unique opportunity to overhaul an outdated system, making it fair not only for creators but also consumers and fans. This is why NFTs have gained notable notoriety in such a short time. 4,444 NFT-enabled creations use automated smart contracts (which automatically run programs on the blockchain) to authenticate their creations and track their origin and value as they pass from hand to hand. . Original artists can now retain most of their revenue when they first sell their work. By current standards, NFT artists retain around 80-90% of their sales, with royalties expressed as a percentage for each subsequent sale. These processes are cryptographically protected and guaranteed by smart contracts, eliminating the need for expensive intermediaries and gatekeepers. With the ability to put more money in the hands of musicians on the initial release of an album or song, and the ability to guarantee pre-determined royalties payments for blockchain music in the future, NFTs are a powerful example of reimagining the music industry. no, see. Generally the dominant payment model.

Old-fashioned music industry model vs. NFT market:

Just as blockchain technology and cryptocurrencies apply the disruptive spirit of decentralization to the traditional financial sector, the music industry is ripe for a radical reorganization of the value capture system. Music is a highly centralized industry and the three major record labels - Sony, Universal, and Warner - control the industry's largest share, with an estimated 66-80% market share, a figure that does not change significantly from year to year. 
 Unfortunately for many producers, many independent record companies are also owned by parent companies associated with one of these three giants. For music artists, this means that there aren't many ways to generate an independent income, even what is traditionally referred to as "independent". With the digitization of music starting at 
 Napster and leading to the widespread growth of Spotify, record sales receded into the background, giving way to streaming services that are also notorious for making the most of their money, eventually leaving almost original artists... Music artists get about 75% of their revenue from touring and live performances, as most of their revenues come from labels and streaming platforms. 
 Unfortunately, the reality is that music artists struggle when traditional industry models and circumstances limit their ability to host live events, and many are seeking new sources of income. NFT gives artists the ability to deliver music directly to consumers, without the need for third-party intermediaries. Many artists hope that NFTs will provide a new way to get fair pay for their work through blockchain music licenses and royalties. While it is unlikely that the NFT's music release will completely replace the role of a record label, it will help artists diversify and increase their revenue streams.
 

How does NFT audio work? 

So far, NFTs have mostly been image or video-related. This is also true for most musicians. Most musicians experimenting with NFTs have released sets of images or videos of pairs of sounds that repeat side by side. You can think of a combination of images or videos as a kind of album cover. It is an original image of an inseparable relationship with music. 
 Even this early version of the Music NFT opens up whole new opportunities for music and visual artists to work together to create unique collaborations. Many music artists are looking for visual artists as collaborators to create  NFTs. Each NFT can be created programmatically with various specifications using smart contracts, but this is for illustrative purposes only. 
 As an example of what this process might look like, let's look at the release of Kings of Leon NFT's album "When You See Yourself". In this particular case, the group released their albums using traditional methods such as iTunes and Spotify, as well as NFT-exclusive versions with digital music downloads. It came with special perks like a limited edition vinyl version of the album, digital artwork, and asset title tags. 
 Artists can issue rare  NFTs by auction, sell a limited number of NFTs issued at a fixed price, in a limited quantity, or have a public issuance that allows them to issue an unlimited number of NFTs. predetermined period. In this case, Kings of Leon made a public release and sold their NFT albums for only two weeks, then no longer released and the albums in circulation became collectibles. In addition to the standard NFT version of the album, Kings of Leon has released a very limited number of Golden Ticket NFTs, which include exciting fan perks such as tickets to all concerts on their lifetime band tour. ... anyone who owns this NFT will have access to these benefits, and if the owner wants to sell the NFT, it will be communicated easily and transparently using the NFT standard. In this way, it is possible to creatively create NFTs to build special relationships between artists and fans. Although very rare and collectible items like this 
 Gold tickets were made available to Super Fans and sold for over $90,000, a wide range of fans can still participate in the NFT Kings of Leon offer by purchasing the NFT standard version $50 album.

Beneficial opportunities for musicians:

Even if NFTs do not revolutionize the economic model of the music industry, music artists will still be able to enjoy the benefits of NFT technology even if they sell individual tokens. Many major artists have already started monetizing their music through NFT. For example, electronic music artist 3LAU tokenized a version of their album "Ultraviolet", which sold for over $11.6 million in NFT. Dance music duo Disclosure sold a song to the NFT  for $69,000. Kings of Leon released the NFT version of the album and donated over $500,000 of the proceeds to the event organizers. Grammy Award-winning music producer, RAC has been experimenting with different forms of NFTs since 2017, establishing a reputation as a pioneer in the field. 
  NFT Music has a long way to go before it becomes an industry standard or generalization, but this exciting new way of presenting music is showing signs of life thanks to these innovative musicians. Although very few musical NFTs have been released to date, they have received great interest and comments from fans, collectors, and speculators. Musicians around the world have noticed this and are starting to use NFTs as a creative outlet and a potential source of income.

About Author

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Krishna Kumar

.He is a tech enthusiast and ready to learn new technology. Also he is a good team player and a responsible person.

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