Your favourite artist brings out a new record, imagine being able to say you own the original copy. Well, this could be a reality, thanks to NFTs. You might have heard of these, they have even been on the news here in the UK. But what are they and what do they mean for the music industry? There’s a lot to unpack here, so I thought I’d break it down into two parts. In the next blog, I’ll look at some more in-depth examples of how NFT’s could be influential, but for now, let’s learn the basics.
What are NFT’s?
NFT stands for Non-fungible token. Before researching this I had no idea what fungible or non-fungible meant. So fungible means replaceable by another identical item; mutually interchangeable. For example, this 20-pound note is fungible. I could replace it with another 20-pound note or even two 10 pound notes and not have lost any value. Non-Fungible means an item is unique and cannot be exactly replaced. The token part also has a meaning. If you talk to someone in the digital community about a token, they would think of a digital file with a certificate of authenticity, verified by being on a blockchain. Without boring you too much with the jargon, a blockchain is essentially a decentralised database of transactions each linked together. So, NFTs are unique digital files that are certified and easily verified as unique. And they can be any digital file; whether it’s a piece of art, a video, trading cards, deeds for digital land (yes, that is a thing) or music files.
Why would you own an NFT?
So, why would anyone want one? Well, NFTs are all about social expression and collectibility. Collectability is something we all understand, I can’t be the only one that had that spice girls sticker book as a kid. This idea stretches back way before the online age but it digitally emulates the way we physically collect things. To understand this, before we dive into the music industry, let’s look at the art world.
Les femmes d’Alger - Picasso
Take ‘Les femmes d’Alger (Version ‘O’)’ a painting by Picasso. It is the most expensive painting ever sold at $179 million. It is valuable because it is an original by Picasso. You can buy painted replicas on Etsy for $69.99. They look the same but it are not as valuable because it’s not the original. It’s fake. If our Picasso was an NFT, the blockchain would allow us to publicly verify that it is authentic. Not only that, you can’t fake the certificate of authenticity - you can see where the item originated and its full transaction history. This is really exciting for art collectors as there has been a long history of people selling fake art as originals.
This March, a digital artist called Beeple sold a collection of five thousand digital images called ‘Everydays: the First 5000 Days,’ for almost 70 million dollars. But why? This is digital art, surely it can be replicated?
Everydays: the First 5000 Days - Beeple
Well, no. Like your Picasso, it’s a one-off, therefore scarce. Only one person can own this piece of art. This is really important for NFTs overall, the idea of supply versus demand. There’s also social context - like Picasso represented his time becoming a cultural icon, Beeple represents the modern age and a new digital culture. He has become a pioneer of the digital art world, his work has ongoing collectibility and sentimental value to a collector because he is one of the first big NFT artists. The price was not just about supporting Beeple, but also about supporting the new wave of culture that NFTs might be bringing us.
Something else to note is that future resales also support Beeple. With physical art, once an artist sells a painting, perhaps give a cut to an art dealer - that is it. They won’t make any more money from that piece no matter how much it sells for in the future. Imagine an early work of Picassos that he gave away or sold for not very much. Most of those sell for millions now and are enjoyed by the world. However, they wouldn't have made him any more money than that original sale. An NFT allows the artist to set a percentage that they take every time that piece of art sells, forever! If ‘‘Everydays: the First 5000 Days,’ sells in future for $100m, a cut of that goes to Beeple. You support the artist every time you buy a piece of their art, encouraging artists to create work that won’t just sell quickly but will stand the test of time.
But what about the music business?
Although visual art has been the starting place for NFTs, as I said, they can be any digital file, so the things you can create or ‘mint’ are endless. In music, this gives artists a new way to connect to their audience. I think we are soon going to be seeing artists use NFTs in lots of creative ways. Here are some ideas of what these could be.
Full Songs and Albums - This might seem like the most obvious but is also the most complicated because of copyright and legal issues. I’ll talk about this more in the part two video. But although we might not see widespread releasing of the original masters (and licence rights) of a song, we’re already seeing artists like Kings of Leon releasing their first NFT copies of that original master version. Imagine being able to own the first-ever vinyl of your favourite song! This is the digital equivalent.
Digital artwork and photos - Of course, we talked about this in the art world but the artwork is also a massive part of a musician's artistry and income. This could include limited edition album covers, posters and gig photos. They could be licensed for a specific concert or album, or even done by a member of the band with an artistic side. In fact, this is already being done. Someone claiming to be Daft Punk recently minted two NFT images with 200 editions each. They were then given out to pop figures like Lindsay Lohan for free. Lindsay Lohan has put hers up for sale for $15,000. Remember the cool thing is, the new owner will have the history of the previous owners encrypted into the NFT.
Memorabilia and Merchandise - Increasingly, all things we collect in real life are heading to this online space. You could even buy a t-shirt as an NFT, receive the real-life T-Shirt and have the NFT verify its authenticity.
Tickets for gigs - Yes, your actual tickets could become NFTs! I know plenty of people who like to keep their gig tickets as souvenirs but also it helps combat ticket fraud.
Teasers of Songs - Mike Shinoda, a co-founder of Linkin Park, raised $30,000, auctioning a 37-second teaser of an unreleased song as an NFT. This seems like a very profitable and fun way to publicise your new release.
Song Sample Rights - A song sample can be any piece of music that is remixed with or made part of a new piece of music. Think of that remix of “Singing in the Rain” by Mint Royale. This has historically caused a lot of issues as to who owns the rights to the new song. Well now, maybe that clip could be released as an NFT for people to own and have the right to use. In fact, Grammy-nominated producer Illmind recently offered up the world’s first sample beat pack as an NFT. Anyone can listen to the beat pack, but ownership and the rights to use the pack only go to the NFT owner.
Video clips from your favourite performances - Maybe you have a moment at a gig that was really special to you. Well, now you can own that moment and potentially digitally display it in your house! This is one that people struggle to get their heads around sometimes because you could watch the exact same clip on YouTube. For the doubters, check out ‘NBA Topshot’. They sell 10-second clips of NBA basketball games which have fetched up to $387,000.
Trading Cards - Remember that Spice Girls Sticker Book I mentioned? When I was ten, everyone in my school had one of these books. You could get a sticker from the local petrol station for 10p. Each sticker also had a built-in scarcity, some were much harder to get than others. Everyone wanted to complete the set and fill the whole sticker book. The next thing I knew, a girl in my school had managed to get hold of that magic rare card and was selling it for a whole £1! Imagine a digital marketplace filled with your favourite artists’ cards where each one is collectable and you can store it online for your friends to see. In fact, the metal band Babymetal has already minted their own trading cards which come with the real-world benefit of an exclusive gold coloured vinyl record. And, perhaps these cards could be linked to a game. Having a limited edition Jimmy Hendrix card could mean you get exclusive access to his songs on something like Guitar Hero. In the future, I suspect we will be seeing music trading cards selling for a little more than the spice girls stickers.
3LAU
As you can see there are quite a few people in the music industry adopting NFT’s already, but I want to touch on someone who’s fully embraced this to give you an idea of the potential. Justin Blau (aka 3LAU) auctioned his album ‘Ultraviolet’ as an NFT drop in March and it collected a huge $11.6 million. Similar to Beeple, 3LAU is a pioneer in the crypto space and some of the reason the album fetched such a high price was in support of his vision for the industry. He made his NFTs extremely rare with only 33 of these albums ever minted, including a one-off platinum edition for the highest bidder. But there were some other really cool in real life perks too. The top bidder got to collaborate with 3LAU on a new single which will then tokenised as its own NFT, whilst the bidders below him also gained access to extra content, including unreleased songs and a signed commemorative vinyl. I think this illustrates the scope for creativity and the ability for the digital and real-world to meet. While NFTs are in the music industry they will also be in the hands of creative people and I’m sure we will see even more interesting examples than the ones I have listed. In fact, Twitter co-founder Jack Dorsey sold his first-ever tweet as an NFT for more than $2.9 million! They really can be anything
I would be interested to know, can you see yourself buying an NFT in the future? What do you see them becoming? And if you have already bought one, where do you think its value lies?
But this isn’t just about making money, it’s about finding new ways for artists to connect with fans and fans to connect with each other. The most desirable and sustainable projects won’t be those which go for a money grab, but those that seek long term value and inventive ways to bring real-world benefits and connect people. That is where the real value lies.
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