Effects of NFTs on the Music Industry

The music industry has been bound to technology for more than a decade and a half, since the invention of sound recording. From discs to mp3 and mp3’s to streaming services like Spotify and Apple Music, a lot of things have changed. Technology changed how music is made, performed, preserved, distributed, and consumed. And it could be in a changing period again with NFTs. It is thought that non-fungible tokens (NFTs) grabbed the attention of numerous musicians. It could make a profound impact on the music industry as artists have already added millions to their revenues by selling tokenized versions of their tracks, digital art, or virtual and real-world merchandise.

An NFT is a non-fungible token that represents ownership of a digital asset, such as a photo, song, or digital artwork. Non-fungible means cannot be changed. For instance, an original Dali painting is not-fungible, as there is only one original copy. Before NFT only physical objects were classified as non-fungible. NFT’s ables digital items to be classified as original, limited edition, and can’t be copied. In other words, it allows digital items to be treated just like an original Dali painting. People can copy and paste these digital objects yet they are nearly as valuable because they don’t have that tag of authenticity, just like a copy of a famous painting. With the help of NFT, people can now invest in songs, videos, and digital artwork just like physical art. Thus, it creates a whole new marketplace to invest in.

NFT creates three important features for artists. Firstly, fans can invest in your career. Fans can invest in an artist's career by buying their NFTs. Artists that are not famous they can invest with the hope that if you blow up, it will be worth more in the future. Secondly, artists can give fans exclusive perks. Artists can sell NFTs that have an exclusive perk or experience that buyers can redeem in real life other than the digital product. Lastly and most importantly, artists have the potential to make more profit. In the music industry, musicians only take 12 percent of the profits made from their music. NFT makes a direct transaction for artists and their fans. Differently, Spotify stated that it pays between $0.00331 and $0.00437 per stream. With NFTs, artists can virtually keep all of the money they make from the sale.

 

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