NFTs are making their mark on entrepreneurship and business as a whole, but how does this technology affect musicians specifically? Are NFTs disrupting the music industry? Well, if you ask super-producer Pharrell Williams, that is exactly what’s happening.
Last week, the icon attended Gary Vee’s Web3-focused Veecon Conference and spoke about how NFTs are changing the game in the entertainment business. Other music celebs attended the conference, too, such as Miguel, who announced he will be joining 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, “disrupting” means “to interrupt the normal course or unity of.” With that in mind, looking at the history of the music business is a good place to start.
Historically, when an artist wants to break into the music industry, they get discovered by an A&R and then signed by a record label (ideally). In exchange for owning their masters and essentially the artist themselves (different topic for a different day), the major label will provide funding and resources, financing the artist’s whole lifestyle to turn them into a star. Now, while this might sound appealing, there is a dark side to this story. Many artists who have signed to major labels or 360 deals have sold millions of records but barely received any compensation. Some have even gone completely broke, as we saw with iconic 90s group TLC. Since these artists usually don’t own the masters to 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 releases. This cycle has been going on for years, which has pushed artists to go the independent route and fund their own careers. While this process is quite rewarding, it can be really expensive, slow and may never get the artist the stardom or lifestyle they always dreamed of — until NOW!
In general, NFTs and blockchain technology allow artists to make a living without having to sign their lives away to a major record label — but how? Thanks to NFTs, you can turn your content into digital assets that your fans can buy to invest in your career.
The great thing about NFTs is that you don’t need millions of streams to make a profit. You can sell items at any price point AND get a percentage of royalties every time that item is sold to someone else — for life. For example, Web3 artist TK sold his single as an NFT for almost $3,000. It would take almost one million streams on Spotify for him to earn the same amount of money. Yet, with NFTs, he was able to make that from a single fan. Legendary DJ Steve Aoki mentioned that he has made more money with NFTs than he has with his whole music catalog, and Snoop Dogg recently made $40 million from just ONE NFT project. The days of trying to pull in millions of streams just to barely make it by are behind us. You can now focus on building a strong qualitative community that believes in what you are doing.
Why is this beneficial to artists? This means you no longer have to “sell out” or create music to appeal to a broader audience — you can create your niche sound for YOUR community. This means no longer having to sign over your masters to labels for resources and funding. Your community can fund projects through NFTs and provide you the resources that you need.
Now I know some of you may be thinking, “Who would buy these NFTs? How do I know my fans will actually buy them?” If your fans will buy merchandise and tickets, they will purchase NFTs. The key to getting them to do so is to provide value or utility that your fans want from you and nine times out of ten, that utility is just more access to YOU!
Imagine curating an NFT membership where your fans get private livestreams, content, community chats, meet-and-greets and more. These are incentives you most likely already provide as an artist, but now you’re providing them exclusively to a select group of people. They will be running to purchase that item.
And that is just the tip of the iceberg. You can even use NFTs to fund your next single or project. You do this by creating an NFT project where your fans will get exclusive access to the whole creative process: studio sessions, writing, photoshoots, artwork … even give them voting power regarding which song should be your single. When it’s time to drop your song, those NFT holders will be your BIGGEST marketing tool. Why? Because they are invested in your project (emotionally and financially), and they want it to be successful so 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 is allowing creatives to display NFTs on their platform, and Warner Music Group recently announced their entry into Web3 by partnering with POAP Inc. While I admire these companies for being progressive with this new technology, I still have to side-eye them because aren’t these the same institutions that caused artists to go through hell all these years?
While that topic is still up for debate, it’s great to see present as well as past artists utilize blockchain technology — Tupac’s estate is even selling one of his album covers as an NFT. Could this mean fans will get to hear unreleased music from some of our late legends? Hopefully.
But, what I do know for sure is that there is no longer a need for a middle man to make your dreams come true. NFTs are paving the way for artists to make a REAL living.
But the question still remains: With all of the digital tools to promote yourself online and fund your own projects, will major record labels become obsolete because of NFTs? Or, will the two worlds be able to coexist? Time will only tell as this technology and the Web3 space, in general, continues to evolve.