NFT music rights: Own and profit from your fave artists’ music

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  Quantumrun Foresight
• November 26, 2021

Non-fungible tokens (NFTs) have taken the digital world by storm, redefining ownership and collaboration. Beyond certifying ownership, NFTs empower fans, reshape the music industry, and extend to art, gaming, and sports. With implications ranging from equitable wealth distribution to simplified licensing and environmental benefits, NFTs are poised to transform industries, empower artists, and redefine the relationship between creators and supporters.

NFT music rights context

Non-fungible tokens (NFTs) have gained significant traction since 2020 due to their unique ability to represent easily-reproducible digital items, such as photos, videos, and audio files, as distinct and one-of-a-kind assets. These tokens are stored on a digital ledger, utilizing blockchain technology to establish a transparent and verifiable record of ownership. The increasing popularity of NFTs can be attributed to their capacity to provide a verified and public proof of ownership for digital assets that were previously difficult to authenticate or assign value to.

Beyond their role in certifying ownership, NFTs have also emerged as a collaborative platform that fosters new relationships between artists and their fans. By allowing fans to own portions or even the entirety of art pieces or music royalties, NFTs transform fans into more than mere consumers; they become co-investors in the success of their favorite artists. This novel approach empowers fan communities and offers artists alternative revenue streams while creating a closer bond between creators and their supporters.

The Ethereum blockchain stands as the leading platform for NFTs, benefiting from its early adoption and infrastructure. However, the NFT space is rapidly evolving, with potential competitors entering the arena. As the market expands, other blockchain networks are exploring opportunities to accommodate NFTs, aiming to provide artists and collectors with more choices and flexibility. This increasing competition among blockchain platforms may lead to further innovation and improvements in the NFT ecosystem, ultimately benefiting both creators and enthusiasts.

Disruptive impact

The emergence of tools like Opulous by Ditto Music, which enable the sale of copyrights and royalties to fans through NFTs, marks a significant shift in the music industry. As the artist's brand and value increase, fans stand to earn more. This trend represents a promising potential for NFTs to reshape the dynamics of the music industry, blurring the lines between creators and supporters.

A report by UK investment firm Hipgnosis Investors highlights the role of NFTs as a bridge between cryptocurrency and publishing administration. While this connection is still in the early stages of development, it indicates the vast potential for a lucrative industry centered around digital collaboration between artists and fans. The rise of NFTs brings forth new investment opportunities and streamlines the licensing process, simplifying the management and distribution of royalties. Despite some resistance from large music companies like Universal Music Group, which has adjusted its royalty streams policy, NFTs are expected to gain further traction in the 2020s.

The long-term impact of NFTs extends beyond the music industry. As the concept evolves, it has the potential to transform various sectors, including art, gaming, and sports. These tokens can create a transparent and decentralized marketplace for digital artworks. Additionally, in the gaming realm, NFTs can enable players to own and trade in-game assets, giving rise to new economies and fostering player-driven ecosystems. Moreover, sports franchises can leverage NFTs to offer unique fan experiences, such as virtual collectibles or access to exclusive content and events.

Implications of NFT music rights

Wider implications of NFT music rights may include:

• More established artists selling percentages of their upcoming songs or albums to fans via blockchain wallets.
• New artists using NFT platforms to establish a fanbase and “recruit” marketers through royalty shares, similar to affiliate marketing.
• Music companies using NFTs to sell merchandise for their artists, such as vinyl and signed musical instruments.
• A more equitable distribution of wealth in the music industry, where artists have greater control over their earnings and can directly connect with their fan base.
• A shift in the traditional music business model, encouraging innovation and creativity in the industry.
• Discussions around copyright laws and intellectual property rights, influencing policy-making and potentially reshaping regulations to accommodate this emerging form of digital ownership.
• Opportunities for independent artists and musicians from underrepresented communities to gain recognition and monetize their work, contributing to a more diverse and inclusive music landscape.
• Advancements in blockchain technology and digital infrastructure, promoting secure and transparent transactions while ensuring the authenticity and provenance of music assets.
• Increased demand for experts in blockchain, smart contracts, and digital asset management, potentially reducing intermediaries in the industry.
• A decrease in physical production and distribution of music, resulting in reduced carbon emissions.

Questions to consider

• If you’re a musician, would you consider selling your music rights through NFTs?
• What are the other potential benefits of investing in music NFTs?