Non-fungible tokens or NFTs are a part of what makes Web 3.0 and the blockchain special. In fact, NFTs are the foundational layer for a new, decentralized internet. Venture capitalists have poured billions of dollars into purchasing NFTs and cryptocurrencies. While many skeptics remark about the need for NFTs and blockchain technology. What is sometimes not mentioned is the fact that blockchains are a better way to build the internet. Hence, what is better will win the hearts and minds of entrepreneurs and developers. History attests to this. Today’s post is about music NFTs and how NFTs are a better way to run the music business with more value for everyone..
The way we will go about analyzing today’s post is by first understanding what NFTs are. Second, we head to the current business model in the music industry. And Third, we will think about how NFTs are the best way to build a new business model for music NFTs. Venture builders and capitalists note music NFTs.
What are NFTs?
Non-fungible tokens or NFTs are digital files that live on the blockchain. The blockchain is a decentralized database. This means that no single party can take over control of the database. The database hosts the data that participants generate by interacting with the blockchain. As and when they want. The nature, whether they are financial transactions or chat messages, depends. On the type of application. Today, we get used to consuming products and services in certain ways. For instance, we all know everyone is different. Hence, things should get personalized to them to increase the quality of outcomes. But this does not happen in reality. Since improving people’s lives and growing economy is difficult.
What can we do? We can make software that we can use together to coordinate what happens in the physical world. This is how we’ve seen the rise of technology giants like Microsoft, Amazon, Google, Apple, and Facebook. While each of them makes most of their revenues from different ways. For instance, advertising for Facebook and Google. Retail and devices for Amazon and Apple. They have one thing in common. They control the most amounts of data. Data that we’ve given them for free. NFTs can help us reclaim all our data back and treat it as an asset. The blockchain automates trust..
Business of Music is Difficult
There are a few key highlights of the music business.
One, a majority of artists do not make enough money. For instance, approximately a group of artists account near 90% of all legal music sales. While this is possible because the internet makes the best look even better. A majority of artists do not end up getting the scale of audiences they need for funds to sustain. This is as per the current model of advertising that works on the internet. It does not include what artists earn from concerts. This is since artists need to be present and spend energy performing it live. In fact, with faster speeds of 5G, holograms promise to make our favorite artists perform with us.
There are many digital platforms that help artists get paid direct. From fans. The crux of the matter is that production and distribution labels end up making the most amount of money. And retain the power to decide who gets the money in the business.
Second, audience data is not known to the artists. This is because digital platforms own them. This should have gotten shared with the artist. Who could then know where most of his or her listeners hailed from and used this information or not. Currently, it is being used by advertisers. This is to add it as a data point on every internet user’s cookie activity and try to sell you things.
Third, there is a lack of integration between what users can experience. This is from a consistent artist experience and what they are getting at the moment. In short, artists are not getting what they deserve too. NFTs and blockchain technology promise to create a new business model.
Why NFTs will Take Over the Music Industry
At the end of the day, NFTs will take over the music industry in the long term because of the same thing. They’re a better way for the economy to function. Likewise, for stakeholders to operate from the same decentralized database. They include regulation of music events and public events, house events, organizing events. Recording infrastructure, elimination of piracy, audience data providers. Manufacture of music equipment, music service providers, and accessories.
Since the entire supply chain of music will regulate itself using blockchain, NFTs. For instance, take something like music tickets. We can program it to get properties like being able to act as a store of entry to another event. This is when you can sell it to someone else for the same or more amount if you don’t want to attend it yourself. Likewise, there is a chance that going forwards we will have a tune and emotion for everything. Music has already surrounded us with music. As time passes, algorithms will start recommending music to us based on our moods. They will become so good at it that many people will let an algorithm pick up what to play next for them.
Music fans have other interests apart from music, based on where they belong to. NFTs can help music bridge the gap there too. This is because NFTs are interoperable across blockchains. Hence, they can get used to cross applications and services. This unlocks many benefits like rewards, points, and exclusive rights. This is to certain privileges based on your interaction with the network.
The world is amidst a host of technological changes. There are many macro-events that are leading to upheaval in financial markets. Hence, we need to remember that history always happens in cycles. It is inevitable that volatility in today’s day and time does not last for long. Order and restoration of peace is the ultimate harbinger of world order. NFTs and blockchain technology can play a part in creating a new economic paradigm. In fact, it is an open secret that the blockchain is neutral.
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