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Most performers struggle to generate money in the streaming era. Artists are paid cents per stream, and many struggles to establish large audiences: According to 2019 and 2020 data, 90% of streams go to the top 1% of artists. Daniel Allan, whose songs had millions of plays in 2020, only made a few hundred dollars per month from streaming, forcing him to work jobs like mixing and mastering other artists’ music to make ends meet.
These days, Allan uses a new paradigm that gives him both financial and creative freedom: NFTs. Instead of selling physical copies of his music, Allan has been selling digital copies of his songs as non-fungible tokens (NFTs) for thousands of dollars each. He spent months building relationships with NFT devotees and then used that popularity to amass 50 ETH ($140,000 on the day of trade) to crowdfund his upcoming album, Overstimulated. The campaign auctioned off half of Allan’s future master royalties, providing him a significant advance and creative freedom. Allan also sells tracks on the NFT music portal Catalog, which does not require him to give up his rights. He now makes 85% of his income through NFTs.
Hundreds of musicians have followed Allan here. One hundred forty artists have sold over $1 million records on Catalog. Songcamp is a digital collaborative of musicians from all over the world creating music and multimedia. They want to push the boundaries of technology and make a living outside the record label system. No rich artists emerge from this.
Music NFTs may result from a strong crypto market or a disruptive force destined to disrupt the music business. The existing model of music NFTs may not grow beyond a few musicians who are strongly involved in the crypto community, say detractors.
Replace record companies and streaming behemoths?
Where do people get tracks that used to be 99 on iTunes? In addition to being speculative assets, many early music NFT buyers are crypto fans who want to see these places prosper. “I would like to hear to this song and appreciate something that it’s a different experience to possess it,” There are 45 recordings on Catalog owned by Brett Shear, the NFT fan who has spent $177,000 for the music. “I’m pleased to support musicians whose vision I share, and I believe music NFTs will become increasingly valued in the future.”
The Chicago rapper Ibn Inglor, for example, raised $92,000 by selling NFTs for fans to participate in his future album’s profits. The rise of dedicated fanbases based on Discord, the favored forum for NFT and crypto fans, has been as essential as the cash bonanza for many artists. Every day, Allan spends 6–8 hours communicating with his followers on his Discord, where they offer support, feedback, and memes. They are emotionally and financially committed to his achievement because many of them own their masters. In his next project, he aims to blur the lines between artist and fan further. ‘Here are 20 demos,’ he says. However, many creative folks in my Discord haven’t had the means to express themselves.
Allan and others regard NFTs as a feasible alternative to the current system of large music labels. They provide artists with up to $1000 funded, coaching, mass distribution, and ways to succeed. In exchange, they usually get creative control and master rights to an artist’s song, allowing them to use it forever. Taylor Swift is re-recording all of her old albums from scratch to her masters. Catalog, NFT musicians think, offers financial stability, artistic freedom, and community.
A decade in the music industry, including being signed to labels, prompted Haleek Maul to believe in the power of NFTs. A lot of manipulation and disregard for my artistic vision, he claims. Maul sold four tracks for 56 ETH ($261,000) last month. Also, Maul owns his masters and plans to use NFT sales proceeds to create a music and art studio in Barbados, a community that regularly suffers from brain drain.
“Before, your fans couldn’t attend label meetings. “But now we’re all the label,” he continues. As opposed to getting out and advocating for what you believe in.
Latashá, an L.A. artist who has sold over 50 music and multimedia NFTs, says labels’ ability to develop talent was already waning before NFTs. She hasn’t been associated with a title that focuses on artist development in recent years. “Before a label would even consider an artist, they had to build a following on Instagram, TikTok, and Twitter. Artists should consider their autonomy, I believe.
As individual artists create their ecologies, more collaborative endeavors gain traction. A songwriting camp involving dozens of previously unconnected songwriters has resulted in new songs selling for thousands of dollars on Catalog. Artists then added visuals and narratives to the tunes before releasing them publicly. The music gets stuck in the music industry, and no music comes out,” explains Songcamp founder Matthew Chaim. As a result of Web 3’s new canvas, we decided to host camps where the fast and fun extends to graphic creation, release distribution, and music monetization.
Major industry giants are dabbling in the space to avoid being left behind. Genies create avatars and wearables. The Grammys have NFTs. The Bored Ape Yacht Club will feature characters from the popular NFT collection of the same name.
Technology in its Infancy
NFT recordings, a new technology, will never replace streaming powerhouses and their ease of use. Spotify has 381 million monthly active users versus 7 million for Audius, a 2018 crypto streaming platform. For many, the NFT music scene is out of reach: it favors artists who are tech-savvy, outgoing, and able to post online continually. To contribute so much to your community is unsustainable.
For now, NFTs on Catalog serve a more conceptual than functional purpose for music fans. Martin Shkreli did not buy the Wu-Tang Clan’s Once Upon a Time in Shaolin. Others can still enjoy the tune. As a result, purchasers mainly pay for virtual bragging rights and support artists they believe are undervalued by the existing system.
Mat Dryhurst, a technologist who works on cutting-edge digital music and AI projects, is skeptical of how NFTs are being implemented in the music industry. “I’m not sure collectibles are the best fit for the crypto music ecosystem I want to see,” he says. “I’d want to see ways to help musicians in the album development that don’t need constantly updating people with your latest music.”
Dryhurst is more interested in how NFTs and NFT-related technology may be utilized to foster music collectives that share a performance hall or recording studio. “Giving people a venue to make music and enjoy music together is fundamental to me,” he says. For example, “the optimistic aspect is thinking about how to take the vitality of strangers with a common purpose in virtual space—like a Discord group—and organize them in real life.”
Whether or not music NFTs become widespread, they have already changed the lives of numerous musicians who were previously failing. “I felt like a lot of my career was making music that I had to make—and sometimes didn’t,” Allan says. “From an aesthetic perspective, I believe NFTs and Web 3 in general can make art more visible.”