Cyber PR is always on the lookout for new technologies and markets for artists to incorporate into their music release plans. Today, we’re sharing the Musicians Guide to Using NFT’s.
The current interest and phenomenon of NFT’s is strongly influenced by the pandemic. But, it is also a solution to a decades old problem in the music industry. This past year, artists saw a big drop in income. Artists searched for revenue through things like live streaming, fan clubs, ticketed virtual meet & greets, and more. Many artists have turned to the world of NFT auctions where they can sell exclusive content and digital goods.
Understanding cryptocurrency & NFT’s
NFT stands for Non-Fungible Tokens – which simply means that the token can not be recreated or replaced. “Fungible” = able to be replaced, so “Non-Fungible” = not able to be replaced.
NFTs use the same blockchain technology that cryptocurrencies use and make digital assets trackable, verifiable, and typically limited. We can attach these tokens to pretty much anything, including digital files. This can be a photo, a video, or an audio recording. It can also lead to a tangible collectable item.
By creating an NFT, whatever item or good the artist wants to sell can become not only verifiably own-able, but also trade-able. The NFT can change owners hundreds of times or be exclusively owned by the highest bidder forever. Be sure that what you put up for grabs is unique and original, as that’s what makes it non-fungible.
Why NFT’s are beneficial to artists specifically
The possibilities are endless when it comes to what can be sold. For example: collectable items from concerts, publishing rights to songs, snippets of unreleased music, digital artwork, archived concert footage, and so much more. As the world continues to remain digital, artists are looking for ways to connect and create for their audiences, and NFTs provide a new outlet for them with several benefits.
Now, here is why blockchain technology will allow artists to bring in a more instant income versus waiting for their traditional payday. NFT’s cut out the middlemen. When fans buy an album, stream a song, or purchase merchandise, some of that money makes it to the artist, but a lot of it goes to the record company or the streaming platform.
As a fundamental benefit to crypto exchanges, NFT transactions are direct transfers between the participants. The artist gets the money, and the fan receives the content in their digital wallet. As an artist selling NFTs, it is important to take notice of supply and demand. Creating tokens for your work can be quite costly if they aren’t selling as quickly or at a higher value than what you pay to generate these tokens.
What makes NFTs so high in value is scarcity. The industry has a way to generate mass production that eliminates the feeling of scarcity. NFTs bring this back as artists can now set their own values on their work and control how much of it is distributed. In addition, NFTs bring a direct-to-fan engagement that is far deeper and more meaningful, making the experience much more intimate.
[Linkin Park‘s Mike Shinoda sold a digital piece of art for $30,000 and took to Twitter explaining his reasoning: “Even if I upload the full version of the contained song to DSPs worldwide (which I can still do), I would never get even close to $10k, after fees by DSPs, label, marketing, etc.”]
Examples of recent NFT sales
Here are a handful of NFTs launched by musicians proving the success and possibilities of NFT’s.
- Jacques Greene and LuckyMe: LuckyMe, is currently exploring the possibilities of selling publishing rights in cryptocurrency via blockchain.
- 3LAU: 3LAU has been a huge advocate for blockchain / crypto technology. He brought in $11.6 million in sales by releasing a blockchain exclusive album Ultraviolet.
- DeadMau5: He launched his first NFT in December 2020 when he sold a 1-of-1 audio-reactive video via SuperRare that sold for $49,777.
- Grimes: WarNymphs was a music NFT but a collection of digitally created art and video set to music. A single unique piece called Death of the Old auctioned for almost $389,000 on Nifty Gateway. Grimes’ NFT project attracted roughly $7 million.
Understanding your marketplace options
Getting started with the world of NFTs has never been easier than right now. Currently, the largest marketplace right now is the platform Nifty Gateway. NG has processed 67% of all music NFT sales ($40.3M). Nifty Gateway specializes in highly curated, Supreme-style drops from celebrity figures in music, art and entertainment; recent customers include The Weeknd, Zedd, and Halsey.
That said, a few other companies are growing more quickly by market share. The Origin Protocol, which accounts for 19.5% of music NFT sales, takes a more white-label approach to helping artists and personalities run bespoke NFT campaigns. This customizable approach is quickly making Origin the partner of choice for the likes of 3LAU, Lupe Fiasco and Ryan Tedder.
Do you need cryptocurrency to buy items on these marketplaces?
Yes! Most transactions are made using ether, the native cryptocurrency to the Ethereum network, which powers marketplaces like SuperRare. Coinbase is an easy place to buy ether using a bank account if you haven’t used cryptocurrencies before. In order to receive content and participate in auctions, fans just need to create a digital wallet. This makes winning content relatively easy once a wallet is set up.
Drawbacks of NFT’s
It is difficult to say if setting up these online auctions for less established musicians is worth it quite yet. The demand for a token comes from the demand for pieces from a particular musician.
Popular or established acts have no problem putting up tokens for auction and drawing in many eager fans who want a piece of their favorite artists forever. For emerging artists, this demand doesn’t exist yet. Newer artists don’t have as much opportunity to benefit from the latest music trend. In addition, NFTs are quite costly to produce and as an emerging artist, you may not have as big a budget as others to generate products and objects desired by your fans.
NFTs allow artists to create new possibilities and experiences with their fans. As the situation with NFTs develops, it is a great idea for artists of all calibers to stay informed about the possibilities NFT’s could bring them, and if they should make leap into the crypto marketplace.
For more tips and tricks on music marketing and publicity, order “The Ultimate Guide to Music Publicity” today!