January 26, 2022
At the end of 2021, the world’s first music NFT marketplace was launched, giving new and emerging artists an effective way to sell their music directly to fans securely and without the risk of plagiarism. Many new and established artists aren’t yet fully aware of the benefits of this technology and its application in the music industry, but the role it can play in empowering artists in an age of powerful record labels deserves a lot of attention. So, let’s break down what an NFT is, what the NFT marketplace is, and how this technology is changing the game for all musicians.
What is an NFT?
An NFT, or non-fungible token, is something unique and cannot be replaced with something else. For example, a pound coin or bitcoin is fungible because it can be traded like-for-like. You can hand a pound coin to a cashier and exchange it for another pound coin without any loss of value. An NTF is different because it is one of a kind in every sense of the word.
This uniqueness is in part because NFTs utilise blockchain technology, a public ledger technology. While blockchain is pretty technical to explain, the most important thing to know is that it records information over such a widely distributed network and in such a way as to make it almost impossible to hack, change, or hoodwink the system. That’s why one of the biggest applications for the technology is in digitising legal contracts and agreements.
What is a music NFT and marketplace?
Essentially, this gives you the ability to change your music into tradeable, collectable tokens. A music NFT is a certificate of ownership of a unique musical work, and it can be sold or traded between you, your fans, and collectors. This can occur through a platform known as an NFT music marketplace, which has the functionality to create your NFT, accessibility for your fan base, and the technology to properly secure and manage these transactions.
With an NFT, the owner has complete authority over how their music is used, and the NFT can contain rights to the music, future royalties, as well as rights to album art, videos, and other exclusive content. For musicians, an NFT is an exceptional creative outlet that lets you curate a unique experience for your fans, letting them into your music and your world through direct interaction with you.
Loud Market is the world’s first NFT marketplace, but interest is quickly growing in this space and there will likely be many more options for musicians looking to trade and market their compositions soon.
How does an NFT marketplace benefit artists and musicians?
The music industry has long been under the considerable power of record labels in terms of the production, marketing, selling, and ownership of musical works. In fact, musicians typically see just 14% of the total profit from the music industry. New and emerging artists are unable to compete with bigger players, many of which are also losing a huge portion of their profits to middlemen. A second issue is that record labels and other middlemen have created significant barriers between artists and their fans, determining where they play, how their work is marketed, where and when tours will occur, and much more.
Music NFT marketplaces restructure this by putting the power to sell your music and interact directly with fans back into your hands. This overcomes the considerable barriers to entry in the music industry, the complications of streaming your content, and the many middlemen and other barriers between you and your success.
NFTs gives you the ability to take control of your music and sell autonomously whether you are an emerging artist or an established musician. Artists can keep 100% of their sale price (this is Loud Music’s policy, but it is worthwhile to read through any policies you encounter on music NFT marketplaces as they may differ) and interact seamlessly with your fans.
Set the sale or starting price
Fans can buy an NFT directly from you or bid against each other, with the platform tracking the sale price and seamlessly completing the transaction. Fans will run the bid themselves from this point, setting the value for your music themselves. This runs in direct opposition to how streaming services work, where value is set by the quantity of your fans rather than the quality of your fans.
Automated future royalty fees
The transaction is governed by the blockchain smart contract, allowing you to set the percentage royalty fee for future sales of the NFT. This ensures that your royalty fee is automatically paid directly to you, the original creator, each time it is sold. This secures instant sale income as well as future income from your music NFTs, helping to create a more rewarding, continual income stream.
The requirements set for quotas, genres, and artistic direction set by powers in the music industry combined with the poor returns, makes it exceptionally challenging to follow your own path. NTFs remove this control and put it back in your hands, so you don’t have to decide between your creative path and making an income.
Kore Studios – Let’s jam together and create your music NFTs
To maximise the value of your NFTs, it’s important for artists to be able to deliver a professionally produced, high-value result. While some artists have the resources, time, space, and know-how to build their own in-house studios, the simplest and most effective route is to work with a music recording studio that’s designed to support artists first and understands the needs of new and emerging talent.
Kore Studios is based in West London, with a rich history of working with some of the world’s most exciting talent. With the rise of interest in NFTs and the emergence of exciting NFT marketplaces that put power back into the hands of musicians, more new and emerging artists will be able to see the benefit of using high-quality studios, engineering equipment, and soundproofing. Want to launch your first NFT? Our award-winning producers and professional recording studios are waiting to help deliver your next hit!