NFTs are making their mark on entrepreneurship and business as a whole, but how does this technology specifically affect musicians? Are NFTs disrupting the music industry? Well, if you ask super-producer Pharrell Williams, that’s exactly what happens.
Last week, the icon attended Gary Vee’s Web3-focused Veecon conference and talked about how NFTs are changing the game in the entertainment industry. Other music celebrities also attended the conference, such as Miguel, who announced that he would join Web3 studio T3mpo as the company’s creative director.
But, when we say “disrupting the music industry”, what does that really mean? According to Webster’s dictionary, “to disrupt” means to “interrupt the normal course or unit of”. With that in mind, looking at the history of the music industry is a good place to start.
Historically, when an artist wants to break into the music industry, they are discovered by an A&R and then signed by a record company (ideally). In return for ownership of their masters and essentially the artist themselves (different topic for a different day), the major label will provide funding and resources, funding the artist’s entire lifestyle to make it a star. Now, while that may sound appealing, there’s a dark side to this story. Many artists who have signed with major labels or 360 deals have sold millions of records but barely received any compensation. Some even went bankrupt, as we saw with iconic 90s band TLC. Since these artists usually don’t own the masters of their work, they have to try to buy them back (rarely possible) or re-record their projects – which don’t have the same effect as the original versions. This cycle has been going on for years, causing artists to take the independent route and fund their own careers. While this process is quite rewarding, it can be very expensive, slow, and may never give the artist the fame or lifestyle they’ve always dreamed of – until NOW!
In general, NFTs and blockchain technology allow artists to earn a living without having to give up their lives to a major record company – but how? With NFTs, you can turn your content into digital assets that your fans can buy to invest in your career.
The advantage of NFTs is that you don’t need millions of streams to make a profit. You can sell items at any price AND get a royalty percentage each time that item is sold to someone else – for life. For example, Web3 artist TK sold his single as NFT for nearly $3,000. It would take almost a million streams on Spotify for it to earn the same amount of money. Yet, with NFTs, he was able to do it from just one fan. Legendary DJ Steve Aoki has mentioned that he has made more money from NFTs than from his entire catalog of music, and Snoop Dogg recently earned $40 million from ONE NFT project alone. Gone are the days of trying to attract millions of streams just to get through. You can now focus on building a strong qualitative community that believes in what you do.
Why is it beneficial for artists? This means you no longer have to “sell” or create music to appeal to a larger audience – you can create your niche sound for YOUR community. This means no longer having to give your masters to labels to obtain resources and funding. Your community can fund projects through NFTs and provide you with the resources you need.
Now, I know some of you might be thinking, “Who would buy these NFTs?” How do I know my fans will actually buy them? If your fans buy merchandise and tickets, they will buy NFTs. The key to getting them to do this is to provide the value or utility that your fans expect from you and nine times out of ten that utility is simply additional access to YOU!
Imagine running an NFT subscription where your fans get private live streams, content, community chats, meetups and more. These are incentives that you probably already provide as an artist, but now you provide them exclusively to a selected group of people. They will run to buy this item.
And that’s only the tip of the iceberg. You can even use NFTs to fund your next single or project. To do this, create an NFT project where your fans will have exclusive access to the entire creative process: studio sessions, writing, photo shoots, illustrations… even give them the power to vote on which song should be your single. When it’s time to drop your song, these NFT holders will be your GREATEST marketing tool. Why? Because they are invested in your project (emotionally and financially), and they want it to succeed, they will push and promote it themselves.
Labels and distribution companies are starting to realize that NFTs are here to stay. UnitedMasters has partnered with Web3 artist Iman Europe, Spotify allows creatives to post NFTs on their platform, and Warner Music Group recently announced its entry into Web3 by partnering with POAP Inc. Although j admire these companies for being progressive with this new technology, do I still have to look at them sideways because they aren’t the same institutions that have put artists through hell all these years?
While this topic is still up for debate, it’s great to see current and past artists using blockchain technology — Tupac’s estate is even selling one of his album covers as NFTs. Could this mean fans will be able to hear unreleased music from some of our late legends? With a bit of luck.
But what I know for sure is that there is no longer any need for an intermediary to make your dreams come true. NFTs pave the way for artists to REALLY make a living.
But the question remains: with all the digital tools to promote yourself online and fund your own projects, will major record labels become obsolete because of NFTs? Or, can the two worlds coexist? Only time will tell, as this technology and the Web3 space in general continues to evolve.