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

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  Quantumrun Foresight
• November 26, 2021

Blockchain became a buzzword during the 2010s, but the 2020s are seeing NFTs becoming the hottest application in the blockchain space. This insight will focus on NFTs’ applications in the music industry.

NFT music rights context

NFTs or non-fungible tokens are unique and non-interchangeable units of data that are stored on a digital ledger. However, NFTs’ growing popularity since 2020 has largely been fueled by their ability to represent easily-reproducible items (such as photos, videos, audio, and other types of digital files) as unique items, and use blockchain technology to establish a verified and public proof of ownership.

NFTs represent a collaborative platform that enables fanbases to become co-investors in artists’ success by allowing fans to own art pieces or music royalties in part or in whole. In this way, fans could become more than just consumers, but marketers that have monetary rights. Currently, the most popular blockchain for NFTs is Etherium, but potential competitors are quickly moving into this space. 

Disruptive impact

Previously, NFTs were just like rare collectibles that people could own for bragging rights. But music company Ditto Music’s blockchain-based tools called Bluebox (now renamed Opulous) are now selling copyrights and royalties to fans. This innovation gives fans a real monetary incentive to support music and promote artists. The more the artist brand increases in value, the more fans can earn. Ditto Music CEO, Lee Parsons, believes that this is just the tip of NFT’s massive potential.

UK investment firm Hipgnosis Investors released a report in July 2021 that argues that NFTs are a bridge between cryptocurrency and publishing administration. It will still take time to develop, but all signs point to a high-earning industry of digital collaboration between artists and fans. However, there has been some pushback from large music companies such as Universal Music Group, which announced that it would no longer accept letters of direction for royalty streams shares. Still, NFTs are expected to gain traction during the 2020s by opening up new investment opportunities, making the licensing process simpler, and incentivizing fans to support artists in new ways.

Applications for NFT music rights

Example applications for 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.

Questions to comment on

• 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?