NFTs Are Changing the Music Industry
By now, you’ve probably heard the term NFTs, and some of today’s top artists — from The Weeknd to Snoop Dogg — are making waves in the NFT world. What exactly are they, and how are NFTs expanding into the music industry?
NFT stands for “non-fungible token” or, more simply, a digital collectible bought and sold using cryptocurrency. NFTs can range from art and sound recordings to tickets and more. NFTs generated an impressive $25 billion in overall sales in 2021.
Trying to understand cryptocurrency and non-fungible tokens (NFTs) can be annoying AF, but the amount of cash being made and spent in the crypto space can’t be ignored. Artists and musicians have been independently making millions of dollars by selling digital versions of their art, music, video clips, photos and pretty much any other kind of digital media they can think to throw up on the blockchain.
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 bong against him. Those types of paydays might’ve normally taken the artists years to collect, but NFTs have created a new model for artists to reach consumers by avoiding middlemen in distribution.
In the music world, an NFT could be defined as a rare collectible that is stored on a digital ledger. 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 others. They could add multiple buyers to the NFT or make it so there is only one owner. The artist can also receive royalties every time a buyer of that digital copy sells it to somebody else. This puts a lot of power back in the hands of artists who now have another way to monetize their art or other forms of digital merchandise.
NFTs could have a huge effect on streaming platforms that simply don’t earn artists enough. We could see an era when artists are able to do business directly with music retailers and sell their NFTs like they used to with self-produced CDs. Keite Young from Medicine Man Revival says this is just the start of cryptocurrency and the concept of blockchain technology being utilized in the creative space.