The world is evolving and digital currencies are becoming more common and accepted by society. Cryptocurrency trading isn’t limited to coins, artworks, and stocks anymore, but is gradually extending to other aspects of business, culture and now music. NFT music has been in the works for a few years now, but has only just recently made its first official public success.
What does NFT have to do with music?
NFT—Non-fungible tokens are digital collectibles that are created (‘minted’) and sold using the security of block-chain, a publicly accessible ledger that tracks and records transactions. NFTs can be artwork, music, pictures, trading cards, or other assets that are unique and not easily exchanged. These works of art when purchased gives the buyer a unique token (similarly to an autographed copy of an art). So, there could be several copies of a book, but only a few people can have the special edition of an autographed copy for a price, or as the case may be, a token.
For music, what this simply means is, to monetize your music with a resale value that goes to fans and creators simultaneously, with the artist retaining full rights to their intellectual property. That means, no middle man, no waiting on labels to decide what to do with your music, and no industry gatekeeper to tell you what and how to go about your distribution.
Artists and musicians can create NFTs themselves to auction off various forms of digital media to their fans who pay using cryptocurrencies like Bitcoin, Ethereum and other forms like credit cards. They could add multiple buyers to the NFT or make it so there is only one original owner (themselves). The artist also receives royalties every time a buyer of that digital copy sells it to somebody else.
What this means is that, if someone feels like the digital ownership of your next project, video performance, or backstage experience (now minted to a digital copy on the platform) is worth 10 or 50 thousand dollars, then let them buy it. Instead of just posting it on YouTube or Spotify for a percentage of what the artist might think their work is worth, they could see a sizable payday in a shorter period, as people find greater value in digital assets.
E-NFT.com is a new streaming platform designed specifically for NFT music that allows artists to restore creative control while still ensuring fair compensation. The platform created by Emmersive entertainment launched with Tory Lanez’s new album “in the dark” as the first NFT streaming album, and sold all 1 million copies in 57 minutes.
With a standard $1 purchase price, it provides fans with cheap access to distinctive music in unique tokens (like an autographed copy).
What Emmersive entertainment (founders of E- NFT) does is collaborate with the artists to determine the pricing for their tracks, and they also give them 50% of all earnings. When fans purchase this limited edition music (and artwork) they receive digital copies of the record (in unique tokens) and can resell from a stipulated date for any price of their choice. Tory’s album currently sells at ranges from $10,000 to $60,000 a copy. Fans can buy and sell this music album using cryptocurrency or credit cards.
Now, Intellectual Property and Copyrights.
Artists have to beware of using the intellectual property of someone else who is not involved in the process of minting (creating) the NFT. It is important to note that the fewer the number of creators involved (graphic artist, producers, co-songwriter) the better and more profitable for the artist. That is why NFT music is more favorable to independent artists.
Unless otherwise stated, NFTs do not transfer the ownership of the copyrighted material therein, so if a song is featured in an audio-visual NFT, the composition and sound recording itself still belongs to the original owner. What the buyer owns is a unique copy they can resell for any amount they desire, or the new buyer is willing to offer.
However, there are cases where the artist decides to sell a fraction of their intellectual property to the fans, such that the fans can collect royalties on the continuous success of the song as each copy is resold. Hence, a fraction of the ownership is sold to the fans. Taylor Bennet, brother to Chance the rapper, recently teamed up with Bluebox to sell 75% ownership rights to his fans while he retains the full 25% majority. Although, this specific sale indicates that he retains full copyright ownership.
That means there are two ways NFT music works currently.
- Artists can mint their music, upload on the E-NFT platform, make the first sale to fans at $1 each, and open for fans to resell for as high as $50,000 per copy.
The artist then earns a previously discussed percentage off each resale value (for Tory lanez, it’s 15%) as well as 50% of all earnings of the initial sale.
- Alternatively, Artists can mint their music, partner with Bluebox , and sell their music along with a percentage of the rights to ownership in bits directly to fans who continue to earn royalties on every resale. However, artists can retain full rights to reproduce, redistribute, and all that comes with copyright unless otherwise states in their contract.
What does this mean for musicians?
In two words, “Big bucks”. In the past couple of years, few musicians have taken advantage of this relatively new space to independently earn huge amounts of earnings through the sale of their projects on NFT platforms.
According to Dallas Observer, In February, DJ and music producer 3LAU made $11.6 million selling music NFTs in only 24 hours. Just a few days later, Canadian musician Grimes made $5.8 million in 20 minutes. DJ Steve Aoki made $4.2 million in the first week of March, while Post Malone auctioned off an NFT to play beer bongs against him. The latest addition to these smart musicians is Toronto artiste Tory Lanez. He sold all 1 million copies of his album “In the dark” in 57 minutes, making the 7 track and 7 artwork album platinum in less than an hour.
These amounts of revenue would have taken artists years to earn and collect, but NFTs have created a new platform for artists to reach fans and create a chain of recurring revenue, without the interference of any middleman. With NFT music, distribution dates are easily set, sales are made easier and faster, streaming is exclusive of digital streaming platforms, and fans get to earn money from their resale. Sounds like a win-win for everyone that loves to listen to music.