Friday, 21 May 2021 19:42

The Music Industry Appears More Promising For Independent Artists Now That NFTs And Blockchains Are Around

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Latasha Latasha

You might know Shontelle as another Barbadian singer who like Rihanna signed with a major record label. Her hit singles “Impossible” and “T-Shirt” rose her to international fame, and her music style has been characterized as a mix of Ne-Yo and Ashanti. 

 

But like many other artists, the pandemic proved to be challenging for Shontelle, born Shontelle Layne, as well. Some of the pitfalls she faced was the expiration of her recording contract. Luckily for her, the new wave of NFTs, where artists can use technology to exert ownership on their work, was allowing her to profit lucratively off her creativity.

 

Before, these were some of the things record labels would monetize off of and artists would never see the benefits. Now NFTs have made it easier for artists to directly interact with fans.

 

For Shontelle, the experience of having a recording contract was akin to slavery, she tells USAToday. Now emancipated, Shontelle is never looking back. She says she will never sign “a major record deal ever in my life.”

 

The emergence of NFTs have made all this possible, removing the middleman of record labels and letting artists directly connect with fans. Yet such developments have led to conflicting perspectives on how this will directly affect the future of the music industry.

 

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But First… What is an NFT?

 

NFT stands for ‘Non-fungible token.' In short, ‘non-fungible’ means it is unique and cannot be replaced by something else. For example, a bitcoin is fungible – trade one bitcoin for another, and you get the exactly same thing. But take a one-of-a-kind trading card, which is non-fungible. If you exchange it for a different card, you’d get something entirely different. The Verge gives another example. NFTs are designed to be unique and gives you something that cannot be copied: ownership of the work (though the artist can still retain copyright and reproduction rights, just like the physical artwork). To put it in layman terms of physical art collecting: anyone can buy a Monet print but only one person can own the original.

 

New Wave of NFTs

 

A rise in NFTs have been making the circuit in the news recently, becoming all the rage in business and culture. These digital certificates of ownership are recorded on distributed ledgers or blockchains.

 

Just over the past few months, big-name musicians have made a ton of money selling NFTs. Several examples include Grimes selling almost $6 million in NFTs in just 20 minutes, Steve Aoki selling a collection for upwards of $4.25 million, and Kings of Leon selling a batch for roughly $2 million.

 

More and more it is beginning to look like musicians are embracing this new trend of NFTs. Lindsay Lohan is auctioning off an NFT of her new song “Lullaby,” a collaboration with DJ Manuel Riva, on the fledgling Fanforever platform, which promises other artists including Swae Lee, Tyga, Ne-Yo and Soulja Boy will be joining its roster soon. The current bid on this site is more than $32,000.

 

A month ago, Snoop Dogg tweeted out his interest in NFTs and, also on Twitter, The Weeknd said he had a “new song living in NFT space. coming soon…”

 

But What Does the NFT Forecast Look Like for Independent Artists

 

Industry insiders like Mat Dryhurst, a musician, researcher and lecturer at New York University’s Clive Davis Institute of Record Music, are saying that independent acts with smaller audiences are at a disadvantage in regards to the NFT trend.

 

He tells Vice that it doesn’t just depend on the number of fans these smaller acts have – it’s also all about who those fans are and where they happen to be on the socioeconomic spectrum.

 

Those fans who are willing to dish out thousands, if not millions, on a musician’s NFT tend to be already in on cryptocurrency platform – and have tons of it to blow, Dryhurst goes on to say. A few months ago, the EDM artist 3LAU broke the headlines with the news that he sold 33 NFTs for a total of $11.6 million. Further inspection uncovers that 3LAU has longstanding connections in the cryptocurrency world, including a friendship with investors Tyler and Cameron Winklevoss, who now own the NFT marketplace NiftyGateway.

 

The people who seem to be profiting off the most off of NFTs appear to be those already attached to the space. Having friends in crypto with lots of money adds an even edgier advantage.

 

Shara Senderoff, the president of Raised in Space, a music and tech investment group, tells Vice that a lot of these numbers – the Aoki numbers, the Grimes numbers – are pushed by speculative buyers who flip their digital goods for vastly larger sums than they originally paid for them. Mostly these aren’t music fans that are buying these NFTs. These are collectors that have been in the crypto NFT space before the recent boom. If you really look into these numbers, it’s the same group of 30 people doing the buying.

 

It appears that the gap between the music’s haves and have-nots are widening because of NFTs. But in some cases, a small handful of independent artists have been making some money selling NFTs. In March, about 20 have done so on Catalog, a marketplace where, by invitation only, musicians can put NFTs that represent their songs up for auction and “sell” them without losing ownership of their master or publishing rights, and retain the ability to share those songs however they like. Similar to all NFTs, those sold on Catalog can be coded so that each time they’re resold on a secondary marketplace, the artist who created them can get a cut.

 

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Latasha Alcindor, an independent R&B and hip hop artist based in LA, recently sold a song on Catalog for about $3,000 in cryptocurrency. She told Vice, she’s made roughly $7,000 from NFTs in total. While that doesn’t compare to the numbers that artists like Grimes has earned, for Alcindor, that money has proved to be a “game-changer.”

 

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Before NFTs, Alcindor mostly relied on commercial work and sync licensing to make a living – she wrote songs for brands and placed her music in ads, TV shows and movies. At the same time, she sold merch and encouraged her fans to buy her music on Bandcamp. Touring also helped pay the bills, but the pandemic has made that impossible. Streaming revenues has proven to be not that lucrative: Every six months, she said, she receives a check for about $40 to $120 in royalties.

 

This has led her to “scramble” to pay her bills. But this all changed when she sold her first NFT. In an instant, she made $3,000. The money wasn’t just a big help financially, she also said, it made her feel like her work was being valued.

 

According to Vice, Alcindor says, “It’s a big F.U. to all the times that labels or people have told me that I wasn’t worth what I’m worth. I know people are like, ‘It’s just a cash grab.’ But beyond that, to me, it’s like I get to see my soul’s worth. My work’s work.”

 

While it seems like success stories like Alcindor is able to validate that claim that NFTs will be opening up new possibilities for lesser-known artists to thrive, only a small percentage of artists like Alcindor are invited to sell their work on Catalog. A large number have yet to sell an NFT. While all of them could technically jump onboard at any time, the future of NFTs remain dubious.

 

What About Blockchains? Could They Save the Independent Artist?

 

On a broader scale, the blockchain – the technical framework that NFTs are built on – can possibly offer more promising solutions. Some people are moving forward by building these platforms.

 

Audius, is a streaming service that isn’t a for-profit company. They instead cater to artists who share the music and fans who listen to it. And artists can get to choose exactly how they want to monetize their music, instead of being forced to accept a one-size-fits-all model where they will be lucky to earn fractions of a penny per stream. This free-for-all model, also allows artists to upload their own music without having to pay a distributor to do it for them.

 

Audius is still in its early stages with so far 100,000 artist who have uploaded their songs to the platform, and more than 4 million people who use it to listen to music every month. Thanks in part to the flexibility of blockchain, Audius will allow artist to customize how they can monetize their work. According to Audius’ co-founder and CEO, Roneil Rumburg, an artist can charge one cent per stream or $2 per month for access to their entire catalog, or else they can offer both options, and a third in which $5 a month gets you access to all their music, plus exclusive opportunities to interact with them directly. This blockchain platform gives artists the option to choose.

 

The thing about Audius is that they won’t be taking a cut of that money. Instead artists will be transacting with their fans directly. There won’t be any middleman. Fans also don’t have to pay Audius for access to the platform. Signing up is free, and you don’t need to pay to browse Audius. This function allows fans to see what’s on the site and stream music that artists don’t charge fans to listen to, with no ads and no cap on the number of tracks they can listen to.

 

Audius plans to use the blockchain to run itself in the future. With more fans onboard, artist can use this free platform to upload their songs, customize the system in accordance with their financial goals, and keep 100 percent of the profits for themselves. Blockchains like Audius seems to be where the future is at for independent acts.

 

“Thousands” of other potential applications of blockchain technology are currently out there that could be just as helpful for lesser-known artists. These includes forums like a Discord room, that requires anyone who wants to enter to pay a certain amount of cryptocurrency to a communal kitty. The members of the forum could then decide on what to do with the money in that kitty to be used for – for example, provide the funds to their favorite musician in order for them to create an album. In return, that musician could issue each member of the forum a unique cryptocurrency token that gives them a financial stake in the album, allowing the community to reap whatever money it generates. Such communities are already being experimented on the blockchain-based platform Collab.Land.

 

In A Nutshell, What Does This Mean for the Future of the Music Industry?

 

According to Dryhurst, it’s applications of the blockchain like this that could be game-changing for the music industry and enable independent musicians to make a living off their work. To him, it feels like a shame that NFTs have gotten so much publicity, while the blockchain’s broader capabilities to reshape the creative economy has gone largely unexplored.

 

Perhaps it’s because NFTs has a way of capturing the public’s attention with its more vulgar and attention-grabbing headlines, but for now blockchains will have to come second.

 

But before the blockchain can truly reshape the music industry, cryptocurrency has to be more widely accepted by the general public. Currently, just 6 percent of Americans use it, according to a survey conducted by Statista. And for artists to benefit from the blockchain, they’ll have to learn more about it, how it functions, and at least develop a working knowledge of the technology. Many may not have time, or even the desire, to be so thorough.

 

For the most part the blockchain should be recognized as a tool not a cure-for-all. Platforms like Catalog, Audius and Collab.Land may not be for every musician, and it remains to be seen if any of these platforms have the potential to revolutionize the music industry. But you can say now that because platforms like these exist today, we don’t have to accept a broken institution as the status quo. With more and more possibilities opening up now, artists now have more options to choose from. And this paves the way for a brighter future for artists who have been previously beaten down by the system. With all these platforms opening up the way, the possibilities certainly do seem more limitless.

 

Artists Links

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Shontelle Instagram

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Shontelle Spotify

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Shontelle Soundcloud

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