Welcome to the fifth installment in PYMNTS ‘NFT series, the latest crypto craze.
For 12 days, we’ll examine every aspect of the non-fungible token craze sweeping the worlds of art, video games, social media, fashion and sports.
When finished, you’ll have a solid understanding of the basics of NFTs – what they are, how they work, what they’re going to be used for, what their downsides are, what you need to be aware of – and beware of – of, and why. people pay so much money for them.
See Also: PYMNTS NFT Series: What Are NFTs And Why Are They The Newest “Next Big Thing?” “From Crypto
PYMNTS NFT Series: Gaming NFTs Don’t Just Have Value, They Save Money
PYMNTS NFT Series: From Famous Artists To Forgers, The Art World Is Embracing NFTs
So how does the music world engage with NFTs? Either way.
Rapper Nas jumped into the NFT world this week, announcing that on January 11 he would sell a portion of the streaming royalties to two of his hit songs to fans for as little as $ 50.
The tokenization of music royalties is a subset of one of the biggest projected uses of NFTs from a business perspective: selling small chunks of big investments that small investors have never had access to before, like the real estate (a hotel has been tokenized). This is a topic we’ll look at in more depth in a separate article in this series.
But that’s just one way for recording artists to use NFTs. Songs and even albums can be hosted and sold on NFT tokens, with a variety of benefits for musicians. Notably, artists are cutting out middlemen, ranging from record companies to streaming services. But the move is also a way to connect with fans, offer special perks, and even sell merchandise that can be used by fan avatars in the Metaverse.
Selling 50% of the rights to “Ultra Black,” his 2020 Grammy-winning album “King’s Disease,” and 2021’s “King’s Disease II,” “Rare,” Nas jumped on a train. crypto market that chooses quickly. ramp up in the music business.
In this case, Nas sells 400 “rare” tokens on three tiers: 700 NFT Gold at $ 99 for a 0.0133% share, 400 NFT Platinum at $ 499 for 0.0658% and access to exclusive merchandise, and 10 Diamond Tokens for $ 9,999 for 1.5789% plus two VIP concert tickets, an exclusive signed vinyl album and a streaming chat with producer Hit-Boy. Ultra Black tokens range from $ 49 to $ 4,999.
It is also not limited to prominent artists. Nas, crypto fan and Coinbase investor, creates and sells NFTs via Royal, a company founded by Justin Blau. Also known by his stage name DJ 3LAU, in March 2021 Blau auctioned 33 NFTs related to their album “Ultraviolet” which included items ranging from new versions of songs on the album to access to unreleased tracks. to illustrations. The $ 11.7 million he raised was the biggest NFT sale ever at the time.
“The fact that Nas is the first artist to sell royalty rights through Royal is an incredible affirmation of our mission,” Blau says Forbes. It’s proof that artists of all genres are keen to democratize ownership of their music and want to be connected to their listeners on a deeper level.
NFT tokenization isn’t something entirely new – David Bowie sold 10-year “Bowies Bonds” backed by his catalog and other revenue streams for $ 55 million.
It’s also a new way for artists smaller than Nas to make money in the age of streaming. About 90% of all streaming royalties go to the top 1% of musicians, with artists like Daniel Allen earning just a few hundred dollars on millions of annual streams, he Recount TIME in December. And with the tour canceled by COVID-19, he turned to the NFTs, selling 50% of future royalties to fans – far more than he gets from traditional labels. He also sells songs on the NFT music site’s catalog. In total, NFTs represent 85% of its income.
The goal, says Allen, is not to get rich. NFTs, combined with strong interaction with social media fans, “To create a musical middle class” that has not existed for some time, he said.
That doesn’t mean it’s guaranteed. Kings of Leon released NFT versions for the release of their album “When You See Yourself” in March 2021 – the first major group to do so. But the response has been poor, despite additional freebies like art to concert tickets.
All this doesn’t mean that the big labels don’t see the value of NFTs. Warner Music Group announced in April 2021 a partnership with Genies to create NFT avatars and clothing products for its artists. The goal, Warner said in a statement, is “to make it easier for fans to reach out on immersive platforms and metaverse.”
Universal announced in November the creation of a new supergroup called KINGSHIP, made up of four Bored Ape Yacht Club avatars who will develop and release “new music, NFTs, community products, activations and experiences in the Metaverse, and will launch a new generation of engaging artists, fans and the community, ”he said in a statement.
Genies has also worked with Justin Bieber, Rihanna, and Cardi B, among others, and offers a 3D avatar and NFT production kit that allow musicians (and others) to create clothes, accessories, tattoos, and other limited edition products for fan avatars.
Mick Jagger and Dave Grohl released in April an NFT artwork linked to their single ‘Easy Sleazy’ which was auctioned off for charity, and musician Grimes – who has a son with crypto-favorite Elon Musk – auctioned a series of NFT artwork for $ TKTK last year.
Even music legend Quincy Jones hopped on the NFT bandwagon. In November, it partnered with the Recording Academy and the NFT OneOf Marketplace to produce a series of NFT collections that will commemorate the 64th, 65th and 66th annual Grammy Awards.
“I’ve been an advocate for artists my entire career, so any technology that goes into helping musicians make a living is something I fully support.” Jones said in the November 202 statement. “It excites me to know that OneOf is working to bring more money into the ecosystem, and at the same time, I’ve been with the Grammys / Recording Academy since its inception. So, it makes me smile to see OneOf partnering with this wonderful organization, and I can’t wait to see the good they will do for artists.