How NFTs Affect The Music Industry

Ulung Suseno . September 21, 2022


Techspace - NFTs (Non-Fungible Tokens) are cryptographic assets on a blockchain with unique identification codes and metadata that distinguish them from each other. NFTs are tokens that we can use to represent ownership of unique items. They let us tokenize things like digital art, collectables, videos, pictures, music, and many more.

Nowadays, NFTs are quite popular, especially in the music industry. According to The Guardian, Muse, a famous British alternative rock band, was on top of the music charts at the beginning of September thanks to their new NFT album, entitled “Will of the People”. They have made chart history by becoming the first act with the UK No 1 album sold in the form of an NFT. The album sold as many as 51,500 copies in its first week alone. An American rock band, Kings of Leon, was the first band ever to release an NFT album back in March 2021, according to Rolling Stone. Even Eminem and Snoop Dogg performed Bored Ape Yacht Club (BAYC) NFTs at VMAs last month. Therefore, NFTs have a huge impact on the music industry.

The question is, what are the impacts? How do they affect the music industry? How do NFTs work in the music industry? You will get the answers in this article.

Read also: Sony Music Applied for Trademark, Covering Its NFT-music

Easier for musicians to sell their music

NFTs are really helpful for musicians, especially if they are not signed with major labels.  They can create and tokenize music, and make it into an NFT. Musicians who weren't signed to major labels now have the freedom to create and distribute their music on their own terms. Unsigned musicians that wish to distribute their music and forge close ties with their fanbase will have even more access to opportunities, and that is all because of the NFTs.

New music streaming platforms

Due to the explosion of NFTs, decentralized crypto-based streaming services are already emerging, including Audius (who just teamed with TikTok to facilitate song transfers to their platform). Electronic music producers like Deadmau5, Weezer, Mike Shinoda of Linkin Park, 3LAU, and many others are contributors to Audius. The music industry will soon be expanded by NFTs, and many musicians are already embracing the new technological environment. 

Ownership of music

Musicians can include a clause that every time their specific NFT is sold, the owner may earn a designated percentage of royalties. This is the first time ever that fans are able to support the artist while unlocking the potential for themselves to profit too.

Over time, the value of these assets may increase, and they might be kept, traded, or sold for a profit. It's equivalent to having a genuine digital first pressing of The Beatles' White Album.

The value of music and the notion that owning musical releases has dramatically decreased over the last 20 years as a result of the growth of streaming and digital downloads, which is a second reason why this is crucial. Owning copies of an artist's work, in this case, digital ones has a new value thanks to NFTs.

More power and income to musicians

NFTs have the ability to give musicians control over their work. In 2017, the music industry in the US made $43 billion in revenue. But how much were the entertainers paid? Only 12%! The balance is distributed through distribution channels, publishing companies, and record labels. An artist may charge a commission on each NFT sale in order to ensure a steady cash stream. NFTs provide the exciting possibility for artists to cut out some of the middlemen in the industry. Since fans pay for their work, it also enables independent artists to prosper.

With the impacts that are described above, we can conclude that there are plenty of benefits that musicians can get from NFTs.

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