How the Metaverse and NFTs can change the music industry for good.
Interest in NFTs and the Metaverse has radically increased in 2021 and the first few months into 2022. Total NFT sales have increased from $95 million to $25 billion in 2021 and daily sales on Opensea, the most popular peer-to-peer marketplace for NFTs, reached an all-time high in 2022.
Artists face a number of problems in their current day-to-day lives.
Normally, they only receive 50% of the sales. The rest is given to agents, lawyers, agencies and other third parties, and big record labels determine who will be the next star.
It is even worse with streaming. Most of the top 0.8% artists on Spotify get less than $50,000 a year.
NFTs give artists the opportunity to be fairly compensated for their work.
The biggest opportunity for artists to get paid fairly is because of the structure of the NFT markets. At the moment, many artists relinquish their copyrights in their first contract and no longer have a say in what happens to their songs and to whom they are resold. Moreover, they do not participate in the resales.
NFTs offer the possibility that an artist does not have to surrender the rights to his pictures or songs immediately. He can decide for himself whether he wants to create an NFT from his work and whether he wants to sell it or keep it. He can also participate in any resale and easily track sales, as the metadata of his NFT contains proof of ownership.
NFTs offer artists the opportunity to capitalise on a shortage and fans can build a deeper connection with their favourite artists.
As part of a survey by Variety, the following question was asked, “The year is 2022. An NFT is released by a studio for a clip from a movie you love. There are 1,000 copies of this NFT for sale. What do you think the price will be?”
20% of respondents assumed that the price range would be over $1,000. Access to exclusive, rare content has a certain appeal and fascination.
The Stage project, for example, is working on this possibility. Stage is an engaging, real-time & always-on music competition platform geared for the 15–25 year old fan audience. While their favourite or newly discovered artists compete, fans actively vote for them through “stages”. It provides an unprecedented digital stage for any artist — popular or yet unknown — to get a voice and be recognized for their talent. Fans mostly experience Stage as an immersive full-screen app similar to TikTok. Any vote earns each voter a unique collectible card and as the artists get famous, the tradeable value of the card increases as well. In this way Stage is creating a global label owned by the fans and not major labels. They help their artists to make a living from their talent and share artist’s success as they get famous.
With NFTs, the possibilities to work with scarcity are limitless. Another example is concerts, which are naturally scarce. The start-up Animal Concerts takes advantage of this scarcity and is creating a next generation entertainment experience. They provide intimate and truly unique venues for top artists to perform and leverage cutting edge VR technology to stream to audiences globally in the metaverse. Their goal is to be the household name for live, streamed events and immersive experiences. Creating a marketplace for concerts, events and experiences targeting both mainstream audiences and crypto communities. By creating this metaverse experience fans no longer miss out on that live ticket and additionally benefit from further experiences like visiting the band’s pre-concert venue or engage and unlock virtual merchandise that can be worn by the avatar during the concert. Bands benefit from theoretically unlimited ticket sales and the possibility to sell merchandise and other fan articles in the metaverse.
So when you look at the benefits of NFTs in more detail, the potential for change in the music industry is definitely there. In particular, the issue of scarcity plays an important role. Most importantly, however, NFTs and the music industry metaverse are constantly reinventing themselves and evolving creatively.
