Music NFTs’: Angels or Demons?

A (relatively) short explanation about the immense buzz around music NFTs'

In a musical world ravished by a 2 years long pandemic where social restrictions meant no live concerts, combined with the venues’ capacity reduced to a bare minimal,  artists were forced to search for new ways to create revenue in the digital space.

As online concerts and ticketing proved to be a not so reliable replacement for the real ones, the most handy source of income is the royalties paid by DSP’s. And they are a generous source of income… if your name is Ed Sheeran or Adelle. Else, an artist should work his creative mind to generate a few millions streams per year only to receive the minimum wage in paid royalties. Yeah, the eternal problem of gatekeepers, publishers and record labels, getting their lion’s share and leaving the artists with a tiny share.

Independent artists and record labels were always confronted with the issue of a centralized distribution and promo system. Going back to the times when vinyl records and cassette tapes rocked the music industry and up until download stores burried the CDs: same story, different format.

Then came the streaming craze we’re living in. Having access to virtual any song ever released and instead paying a monthly fee as low as a few euros turned services like Spotify, Apple Music or Tidal into these massive success stories with hundreds of millions subscribers. Then again, this came with a cost, paid by who else than the artists themselves (see above).

As the web 2.0 empowered the music scene into creating and growing huge communities of fans in direct contact with the artists through various social media platforms, from those controled by the tech giants to the independent ones, like Discord, along came democratization and descentralization of the music scene. Now the artists don’t rely on service providers and labels to reach their fans. The only thing remaining to be solved in this equation was to provide the fans the so much needed tools to directly support their favourite artists.

And here is where NFTs’ came into the spotlight. The NFTs’ (non-fungible tokens) are essentially digital certificates of authenticity that point to a file, such as an image, audio or video, and exist on a record-keeping blockchain in a way that makes them uniquely identifiable and able to be sold and traded with cryptocurrency. The NFTs’ are somehow in the middle of the decentralized web3 movement. It provides a way for the fans to own a unique and non-replicable piece of their favourite artists’ creations (be it music, graphics etc), it’s a digital collectible item that could up its value in time and it provides that scarcity status that the digital world has yet to offer until now.

To prove the NFT craze right now, here are some figures and success stories: NFT sales were around 25 billion USD in 2021, compared to a mere 95 million in 2020. 140 indie artists sold over 350 albums for more than 1 million USD combined, on Catalog. 3lau became the first artist to sell an album as NFT (he made 11 million USD in less than 24 hours). HipHop star NAS built his own NFT platform, Royal, where he sold a NFT collection on a live sale for over 560K USD. And the examples can continue forever.

Sounds too good to be true, right? Because, like everything else in this consumer-driven world we are living in, there is a hidden cost: ethical, economical and ecological. NFT’s are based on the cryptocurrency market: extremely volatile and speculative. There are already strong voices stating that this is nothing more than a hitech Ponzi scheme. There is also the rights ownerships issue when it comes to NFTs’: you actually own a token, not a share from the original work. And, last but not least: the environmental problem that comes with producing cryptocurrency: you buy a unique digital piece along a huge bubble of greenhouse gas emissions. And also, you need to become aware of scammers who would sell you music NFTs’ without the artists’ consent.

Maybe you think that NFTs’ will change the music industry forever. Of maybe it’s just a bubble that would eventually burst and provoke a mass disappointment for the music lovers. It’s too early to draw a conclusion, but the NFTs’ are, from our point of view, the first step into a brigther future for all the independent artists out there. How it will transform to become a reliable source of income for them? Well, only time will tell 🤗 In the meantime, if you feel ready to jump the NFT bandwagon, you should check these 10 NFT platforms