The NFT Music Boom
Art and music are in the misdt of yet another period of disruption, as NFTs (Non-Fungible Tokens) make their debut, and the blockchain continues to engender innovation in the ownership and transaction of music, as well as redefining the relationship between artists and fans.
Guest post by Jesse Kirshbaum of Beats & Bytes
We are living in a historic time of transformation.The art and music world is changing before our eyes thanks to the potential of NFTs and social tokens. It’s a massive boom that is paving new roads and rewriting the rules. The blockchain is proving to be a truly disruptive and innovative way to track payments, ownership, royalties, and the relationship between artist and fan.
How is this possible?
By attaching these pieces and releases to the blockchain, creators are able to both track transactions and earn future money on the resale of their works. The structure of these transactions is being workshopped and amplified on platforms like Clubhouse, concurrent with the industry’s evolution. Part of the success of this space is the alchemy of Clubhouse promoting it, the cryptocurrency boom, the dominance of “drop” culture in streetwear, the movement for more and more artists to own their masters and the pandemic leaving us all at home with not much else to pay attention to or spend our money on. After a year of weird crypto kitties and wonky creators futzing around trying to figure out how to utilize these currencies, real utilization is on the horizon and the future is taking shape.
What is happening?
In the past week alone there have been multiple examples of social token power:
3LAU started an auction for some of his exclusive NFT’s, which ended early morning on Sunday, February 28th, and generated a total of $11,684,101. 3LAU used Origin Protocol’s decentralized e-commerce platform to build its own site and DShop to ‘auction’ a collection of NFTs commemorating the three-year anniversary of his best-selling album, Ultraviolet. Only 33 Ultraviolet Vinyl NFTs will ever be minted.
Also this week, Ozuna released “small bears,” a project consisting of five NFTs featuring the animal that he has included on the covers of two of his albums, “Odisea” (2017) and “ENOC” (2020). Ozuna’s collection is divided into “Bears 1”, “Bears 2”, “Bears 3”, “Bears 4”, and “Bears 5”. The NFT cost of “Bears 1” is $ 1,555, “Bears 2” 1,666, “Bears 3” 1,777, and “Bears 4” 1,888, as displayed on the Niftygateway page. (via SpainsNews).
Linkin Park’s Mike Shinoda also sold his first piece of cryptoart as an NFT on the online marketplace Zora last week. Midway through Sunday (Feb. 7), as Decrypt reported, the composition’s highest bid came in at 18,000 DAI, a stablecoin cryptocurrency that closely parallels the U.S. dollar — meaning users valued it at around $18,000. Later that same day, Zora announced that Shinoda had accepted a bid equaling $30,000 (200 WETH). The musician plans to donate that to charity. (via Loudwire).
Grimes is the latest artist to get in on the NFT gold rush, selling around $6 million worth of digital artworks after putting them up for auction yesterday. A series of 10 pieces — some one of a kind, others with thousands of copies — went up for sale on Nifty Gateway on February 28th. The highest-selling piece was a one-of-a-kind video called “Death of the Old” that involves flying cherubs, a cross, a sword, and glowing light that’s set to an original song by Grimes. The winning bidder took it for nearly $389,000. (via The Verge).
And tomorrow, Kings Of Leon claims to be the first band to release their album as an NFT. The auction will include six “golden tickets” that will include perks like front row tickets for life. (Variety)
Is this new format hype?
Hell yea! This is wild. These numbers don’t make sense and in many instances, neither does the art. These products are quite weird, not to mention, how do you show off digital art? That’s still very uncertain but the community is growing and the first movers who do it right are being rewarded handsomely.
Where is this going?
Well, that’s where it gets interesting. Right now this is a very techy world, a super niche marketplace being driven by Crypto kids and first-movers with massive fanbases, making it a very wealthy person’s game. The art being auctioned in such a limited capacity is ballooning prices. I believe the future is going to be a mass-market opportunity for fans to purchase directly from artists by eliminating the middleman. Eventually, prices will reflect that.
Ultimately, what this movement does is reinvent the music business model and drive all revenue directly from fans to artists, making traditional models antiquated and costly. How music is released is now completely at the artist’s discretion because they have a direct, trackable, and easily monetizable relationship with their fanbase.
As with any brand new frontier, there is no clear formula for success. It still depends on the elements of what’s released (i.e. how much product is released vs a bidding war for very few products), what platform the release is on (ie SuperRare, Nifty Gateway, Zora, Opensea, Foundation, etc), and the nature of the artist’s fanbase.
Bridging the gap between digital and physical, imagine how this can change the merch experience, revolutionizing the artist-to-consumer drops, paying artists fairly for their work, and allowing for a clear sharing of royalties both in the primary and secondary market.
Take, for example, this weekend with the D’Angelo and Friends VERZUZ backdrop, which was not only stunning but will be available for purchase very soon. The piece, created by the very talented Ryan Keeley, is coming…you guessed it…to an NFT auction near you.
This world is growing fast and it is going to be one helluva block party (wink wink) for artists and fans alike. Every artist, manager, label, and fan needs to educate themselves about this emerging marketplace because it’s trending in one direction: to the moon!