Picture: NFT News Today
TechSpace - We all consume music in some form. Times have changed, music has become more accessible to us, artists have been able to communicate more with their fans, and they have been able to create more diverse revenue pipelines. Therefore, industries in which intermediaries have excessive power, such as the music industry, are the most suitable for blockchain / NFT to be applied.
The music market itself has traditionally been a structure where some famous artists make big profits and many artists don't. Big record labels and streaming services have an absolute influence, making it difficult for unknown artists to promote their music. The distribution structure of music copyright fees is also unreasonable. Most of the revenue goes to numerous intermediaries, and the revenue that goes to the artist is only about 10% of the total revenue. This market structure has been going on for quite some time. But changes have begun to change that.
Spread of Music NFT
Traditionally, the way to own music is to purchase a record or download a digital asset such as MP3. However, you only own the right to hear the copied music, not the true ownership of the music.
Music NFTs are different from regular albums and music purchases in that they can have ownership of specific music. Music NFT can prove ownership and verify at any time through blockchain technology. NFTs are non-counterfeiting and can be created with only one digital asset. What makes music NFT different from CD-like records is that there is only one in the world, can own it, and it is a medium that directly connects artists and fans.
There are many ways to utilize the Music NFT. Famous singers make and sell their own music through NFT. At this point, you can have 100% of the sales revenue. Web 2.0's music platform takes 80-90%, while NFT-based Web 3.0 music market is the exact opposite. In fact, there is a big difference between the revenue an artist earns on Spotify and the revenue earned on the music NFT marketplace, Catalog.
NFT Craze Blowing in The Music Industry
As a technology called NFT was introduced, the music industry also began to actively introduce NFT.
For example, an American band called Kings of Leon released an NFT album and sold the rights to download music and digital artwork by purchasing tokens for $50, and auctioned 4 tickets for the first row, moving to the concert site. We sold a set of related vehicles, Meet & Greet, and all the MDs of the tour.
Rising Music Copyright Finance
As it became possible to issue NFTs to music, rights to music, like works of art, began to be traded as an asset. Music copyright includes performance rights and neighbor rights, and these 'rights' are also available for sale with tokens.
First, investment platform company republic announced that it is selling security NFTs (S-NFTs) that allow music fans to share their rights to artists' music royalties. It can be seen as a method of splitting the compensation for music copyright that occurs through playback, streaming, and use and selling it to multiple people.
Are There Any Risks to Investing in Music Copyrights?
As in the above-mentioned cases, recently, music copyright is being recognized by many people as an asset that can be shared and monetized by many people. The characteristic of products that can be invested in music copyright is that the settlement of 'copyright' use is protected by law, so it is emphasized that it is a stable source of income.
However, on the other hand, the fact that it is difficult to make large profits in a short period of time through music copyright finance can be a disadvantage. It is difficult to make a lot of money in a short period of time unless you succeed in going backwards in a short period of time. In addition, it is also important to consider that it is difficult to sell the copyright fees of lesser-known songs at the desired price at the desired time due to the low demand at auction. So, since the concept of NFT issuance of music is newly created, there is a risk in music copyright investment through NFT.
The issue of 'fake minters', which steals original works without the consent of the original author and sells them as NFTs, is also emerging, and the law on taxation of transactions through NFTs is still under review. Therefore, when investing in music copyright through NFT, it would be better to research carefully and do it.