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NFTS AND ELECTRONIC MUSIC
A growing trend in the music industry is the rise of NFTs or non-fungible tokens. Although NFTs have been around for a few years now, the movement has truly taken off in a massive way recently. If you’ve been on social media at any point in the past few months, you’ll know what NFTs are, but in case you don’t, here is a brief explanation.
To over-simplify, an NFT is a sort of like a digital certificate of authenticity. Digital artwork, by its very nature, can be copied and distributed instantly all around the world. But buying an NFT gives the customer proof of ownership for whatever they’re collecting, regardless of how many digital copies exist.
NFTs can come in the form of digital art, videos, sports cards, collectibles, and yes, music, that is exclusive to the owners and unable to be deleted or duplicated (this is what non-fungible means).
NFTs were originally only able to be purchased or traded with Ethereum (a cryptocurrency that can very generally be related to Bitcoin), but now are expanding into different currencies. NFT creators can release projects that hold any specific amount of “tokens” for people to buy into their projects.
Because of the limited capacity of some of these art pieces, or whatever the artist is selling, prices can skyrocket into the millions. As one example, singer Grimes recently sold a collection of art on Nifty Gateway – one website of many where artists are choosing to sell NFTs – for $6 million. It is the hottest new way for artists to make a lot of money in a short amount of time from their art and has been especially helpful lately with the ongoing effect of COVID-19 where artists unable to tour have extra incentive to seek out new sources of revenue. Songwriters’ catalogues are selling for hundreds of millions. And their listeners are spending more time staring at screens at home, including those fans with the impulse toward status-seeking and the money to afford it. From the forces of the market at large to the concerns of individual musicians and listeners, conditions were ripe for NFTs to breakthrough.
Many electronic artists are getting involved, and you have likely seen one of your favourite DJs posting about it or selling for themselves. Some love it, and some are against it which has sparked a lot of conversation around the subject - isn’t owning tokens really beside the point of appreciating art in the first place? - But artists like Steve Aoki, Dillon Francis, 3LAU and more are using the rise in the popularity of NFTs to their advantage.
Steve Aoki made history on auction site Nifty Gateway with one piece from his collaborative ‘Dream Catcher’ collection with 3D visual artist Antoni Tudisco selling for an auction record of $888,888.88. The entire collection itself collected a hefty $4.25 million.
As for 3LAU, he made in total $11.7 million from what he has sold, which has included a custom song, access to unheard music on his website, custom art, and new versions of the tracks from his ‘Ultraviolet’ album. The person who won that bid now owns the rights to the original masters of the tracks. A person who goes under the name of WhaleShark was the one to buy an NFT token from 3LAU for a head-turning, and record-breaking, $3.5 million.
We’ve also seen Deadmau5 selling NFTs for virtual stickers or Disclosure debuting a song on Twitch and selling it as an NFT for $40k.
But how many collectors will pay thousands of dollars for digital collectibles, and for how long? Even those with a vested interest in NFTs are wondering.
It’s impossible to know if and when the fervour will die down, and it seems safe to say that we’ll see some attempts to cash in before it’s too late. There’s some reason to believe it won’t last forever. The “initial coin offerings” that dazzled the crypto world in 2017 have already lost their lustre. Regulatory scepticism could be another risk factor.
Music, unlike visual art, doesn’t have a strong historical basis in the sort of sales NFTs encourage, with a single buyer paying top dollar for a single rarefied object. However, in recent years, as widespread streaming has made it harder for many musicians to make money from their recordings, a vanguard of artists, especially in hip-hop, has experimented with artificial scarcity. The most notorious example was Wu-Tang Clan’s one-of-a-kind album Once Upon a Time in Shaolin, which was released in 2015 and bought by pharmaceuticals honcho Martin Shkreli before his seven-year prison sentence and government order to forfeit the record.
One common question that remains though is around sharing the wealth: of course, big names of the industry can sell NFTs for top dollar, but how does that trickle down to the next generation of artists?
Watching headline names rake in six figures for their auctions could be understandably triggering for an artist who’s spent the past 12 months unable to tour, struggling to make ends meet.
And the truth is, if you don’t already have an audience, the likelihood of seeing significant returns from posting a looping video to an auction site is quite low.
If one positive can come out of the sometimes-absurd NFT auction gold rush and the resulting media frenzy, it’s that more people will become aware of blockchain and its potential for a genuine, artist-first, alternative digital existence. For music lovers, the most optimistic scenario for NFTs might be that they will give musicians the economic clout that they lack in the internet’s most recent iteration.
Let’s hope that whatever the future internet holds, the “Web 3.0” is better for recording artists than Web 2.0 has been, with its economics of virality and attention. For now, NFTs look less like the antidote than a way for venture capitalists and their friends to buy feelings.
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