The Impact of NFTs on the Music Industry. What Does BigONE Think?
Music has always been an important part of people’s lives because it evokes a sense of excitement in them. In terms of cultural redefinition and structural change, the twentieth century was a watershed moment in the music industry. The world witnessed the evolution of music publishing, from CDs to mp3, and finally to the streaming era. Music publishing has always found a way to evolve to bring musicians closer to their fans. The social media era also helped introduce what we now call ‘stanship’ or ‘fanbase’. A group of people becomes die-hard supporters or fans of famous musicians, purchasing and promoting their music on various platforms.
The fan culture has aided musicians in achieving tremendous success in a relatively short period of time. Their fans are eager to buy whatever the musician releases, from their recordings to ‘merch’. The rise of non-fungible tokens (NFTs) is a growing trend in the music industry. These NFTs allow fans to participate in auctions for exclusive content from their favorite musicians. NFTs also assist musicians in selling their works, allowing them to earn more money and get closer to their fans. Clearly, blockchain technology in general, particularly NFTs, is impacting the music industry.
What Are NFTs?
NFTs are digital asset ownership tokens that represent collectibles and are stored on the blockchain. NFTs use the same blockchain technology that Ethereum and other cryptocurrencies do. The term ‘non-fungible means it is one-of-a-kind and therefore cannot be replaced. In other words, NFTs are not interchangeable. A common characteristic is that they can be anything digital if the buyer sees value in it. Most NFT platforms are built on the Ethereum blockchain, which supports a record of the NFT purchase history from its first owner onwards.
How Are NFTs Transforming the Music Industry?
NFT transactions are secure and instant because they take place on the blockchain. There is no intermediary or central authority involved in the transaction. These are some of the reasons why it is so appealing to musicians and their fans. Concert tickets, digital merch, music, and one-of-a-kind experiences and content for fans are examples of NFTs offered by musicians. They may also auction personal items that are important to their fans. Because there are no middlemen, the money obtained from the NFT trade is entirely for the benefit of the musicians. To summarise, the advantages of NFTs for musicians and fans are:
· No middlemen or record labels
The music industry has many middlemen who cut, whether from streaming revenue or concert ticket sales. When you listen to an album, the revenue is split between the record label, the streaming platform, and the musician. The emergence of NFTs has therefore enabled musicians to reap direct benefits from their creative materials.
● One of a kind and personal experiences
Fans can benefit from one-of-a-kind experiences from their favorite musicians, thanks to NFTs. When they have this direct and personal experience with the musicians, they feel special and closer to the artist. Musicians can also have control over what kind of experience or content to share with their fans.
While NFTs add value to the music industry, it is also important to consider the potential negative impact of this new technology. Some of the potential drawbacks of NFT in the music industry include:
● Difficult for new musicians to utilize
Though there is a demand for NFTs, popular musicians and established musicians are really the only ones who can fully utilize them right now. New musicians may find it harder to take advantage because they lack the fanbase to purchase their newly released NFTs.
● Legal control
Most musicians sign a contract before signing with a record label. One of the powers granted to the label by the contract is authority and ownership of the musician’s music and creative materials. Because NFTs are supposed to be digital asset ownership, this can potentially lead to conflict and legal issues for the musicians in the future.
NFTs open up new possibilities for the music industry and help musicians create one-of-a-kind experiences for their fans. Despite the drawbacks, the NFT phenomenon is still growing, and solutions will be found for the majority of the current issues. The rise of NFTs in the music industry will allow musicians to be more creative, bringing them closer to their fans and reaping direct benefits from a closer relationship. Overall, we believe that NFTs will transform the music industry, just as first CDs and then Napster with the growth of the Internet.
In our next article, we will be discussing how NFTs are impacting supply chain management.
BigONE is a global cryptocurrency exchange that provides a platform for trading various cryptocurrencies. It was founded in 2017 and registered in the Netherlands. The group operates in Russia, Brazil, Vietnam, Seychelles, Singapore, Japan, and Indonesia, providing marketing, investment, and blockchain technology research & development.