I have a new album coming out April 9th. No, I’m not about to pimp another album NFT (more on this in a bit). This is only for reference to say I’m A) a working musician and B) I feel this stuff intimately.
I’m going to give you a bit of (important) backstory. But if you just want to skip to the meat of NFTs, check below the break…
Ok, so, this album. It’s my first complete body of work (under my own name) in 7 years. It means a shit ton to me. It was a heavy, HEAVY thing to make. Not only because it was made during quarantine, but because it was how I processed my breakup from an 11 year relationship. I wrote around 40 songs during this process. And settled on the final 6 for this offering. Which were then recorded (remotely) with my producer and the musicians who helped bring this thing to life.
What does this have to do with NFTs? And will I just get to the point already?
I’ve put out a couple singles in advance of the album so far. The Spotify gods have not anointed these songs as playlist-worthy. (They rarely do) The Spotify numbers are relatively abysmal at this point. I know that it’s not about week one anymore. It’s about week 51. Week 151. Hell, Ricky Montgomery (who is appearing on a future episode of the New Music Business) had 2 songs go viral on TikTok recently from his 2016 album! (which landed him a massive major label deal – after an insane bidding war).
But I digress.
The numbers on Spotify are literally making me sick. I’m sick that I’m allowing these numbers define my self-worth. And the value of this work that so much of me went into.
But then, I get the messages. Most come through email (because that’s where the majority of my audience lives). Some come through Instagram DMs. And some people have paid well above the $5 minimum pre-order ‘name your price’ on Bandcamp (thank you!)
One person told me how they just found out YESTERDAY that their wife of 15 years was seeing another man. And now in a daze, he’s been aimlessly wandering his neighborhood with my song on repeat while weeping. But this music was bringing him solace and hope. I’ve honestly received more wonderful messages about the music than I could relay. One person told me that they’ve listened to just one of the songs over 25 times and it hit them so hard that they couldn’t stop crying over it. But it was bringing them peace. And one person said this:
“I’m a fellow musician. Thank you for sending this along. It’s beautiful and very poignant. I can relate to the loss and grief you express in this song but in a different way. As I was listening to it, I recalled leaving music for a period of time in order to enter into the 9-5 work world fulfilling the expectations of others. As you may imagine, there was a loss of identity and authenticity I experienced that I never really allowed myself to grieve over until very recently. Your song has become part of the process of letting go and recovering in order to move on to fulfill the work I came here to do as a musical creative. Thank you for that gift! I feel this is one of the most precious gifts musicians can give – the permission to fully feel through the emotions in order to allow the healing to follow.”
These notes are encouraging and comforting. And they remind me why I share the music I make. And how once it leaves me and falls into the world, it is no longer just mine, but can give meaning to others.
Do the 10,000 Spotify streams on these songs reveal this level of impact? Fuck. No.
How do I know if one of these streams (which I got paid around $.0035 each for) came from this person above and it changed her life, or if it came from someone who skipped it after 37 seconds on a playlist?
Spotify streams do not measure impact. Spotify streams do not measure worth. Spotify streams do not measure anything other than streams on Spotify.
NFTs have the potential to bring some value back to music.
What are NFTs?
NFT, literally stands for Non-Fungible Token. WTF does fungible mean? Fungible is something that has a defined value. Like a dollar bill. A dollar bill equals $1. Or €.85 euros. Or £.73 pounds.
Bitcoin is fungible. 1 BTC equals like a gazillion dollars at this point (so what I sold all mine back in 2018, sue me 😭)
So NON-fungible simply means it doesn’t have a set, defined value. Like Jimi Hendrix’s strat. Or the first pressing of Dark Side of the Moon on vinyl. Or Carter Beauford’s drum sticks. Or the limited edition, numbered screen print I bought when Alabama Shakes played the Greek Theater.
NFTs are the digital version of these unique collectibles.
NFTs are one of a kind – just like Jimi’s Strat. Yes there are many Fender Stratocaster guitars in the world. But there’s only a few that Jimi Hendrix played. And those are worth a hell of a lot more than just the one off the wall at Guitar Center.
So what’s been happening here and why should you care?
If you’re reading this article, you’ve most likely heard about the electronic artist 3LAU who made over $11 million selling his NFTs.
Or Grimes NFTs which sold for $6 million. Or Kings of Leon who made over $2 million selling their new album (and other assets) as NFTs. Or Steve Aoki, who sold his NFT collection for $4.2 million.
Or, outside the music space, you probably heard about Beeple who sold a digital piece of art for $69 million at auction. Or a screenshot of Jack Dorsey’s first tweet that sold for $2.9 million.
Or that weird cat meme that sold for $600,000.
But these are the headline makers.
You probably didn’t hear about:
ODESZA – $2.1 million from their recent album drops
🏛 • REMNANTS • 🏛
Our first collection of NFT art arrives Saturday March 20th on @niftygateway
— ODESZA (@odesza) March 6, 2021
VÉRITÉ – $12,000 on 2 songs at auction (with some physical goodies tied to it)
new single 4/15
exclusive 1 of 1 NFT auction with option to redeem a % of master recording ownership
extremely excited to experiment with community ownership to show that music has value. !!!
— VÉRITÉ (@Verite) March 31, 2021
Lil Miquela – $82,000 visualizer
— lilmiquela (@lilmiquela) November 17, 2020
Pussy Riot – $200,000 on their drops
"TERRESTRIAL PARADISE" depicts an innocent, happy, utopian, kawaii world, where a hu(wo)man is still in peace and harmony with the environment.
PANIC ATTACK series (1/4). The first piece is out.
The VERY first Pussy Riot's NFT drop.@withFND
— 𝖕𝖚𝖘𝖘𝖞 𝖗𝖎𝖔𝖙 (@pussyrrriot) March 13, 2021
Young and Sick – $865,000 on his
"Drugs Bunny" 🐰💊@youngandsick says:
"HARD TO EXPLAIN is a mess of my trippy characters and nods to the #crypto community, that will take me years to explain to my parents. Thanks for tuning in and dropping out."
— Nifty Gateway (@niftygateway) March 15, 2021
Zack Fox – $15,000
Ozuna – $11,829 on their drops
View this post on Instagram
Or the other nearly 30,000 NFT sales from over 100 artists in the music space just this past year, grossing nearly $50 million.
Let’s just consider for a second the numbers of some of these artists. Because, of course, as an industry (and society, sigh) we’re obsessed with numbers. Young and Sick only has 27,000 instagram followers. He’s both a visual and musical artist who made nearly a million dollars on his NFTs.
Also, it’s worth noting that celebrity in the “real world” doesn’t necessarily equate to NFT success. Shawn Mendes with his 60 million Instagram followers only made around $380,000 on his NFTs.
Ok, so now you know that people are making money on NFTs. But why? And, wait, what are they?
Very simply, an NFT can be any digital file: a jpeg, wav, mp4, .mov, mp3, gif. Whathaveyou. Most NFTs in the music space have been short visualizers – typically videos between 10 seconds and a minute. And the vibe, as it is now, is fairly trippy and far left-of-center aesthetic.
These are limited edition items. Just like a screen print or an original pressing vinyl.
The question I know you’re screaming at this point is WHY WOULD ANYONE PAY MONEY FOR A DIGITAL IMAGE THEY CAN DOWNLOAD TO THEIR DESKTOP?
Well, it’s a status thing.
Why do people wear $50,000 Rolex watches? Or drive Bentleys? Or wear Yeezys? Or sport Nike? Or Yankee hats?
Humans wear brands, typically, to showcase something about themselves. Why did someone buy a Hockney painting for $80 million, when they could just hang a print up for $20?
It’s the story behind the item! The status symbol.
NFTs are collectibles. Just like sports cards or band Ts.
Some NFTs are tied to physical items. Like, Kings of Leon offered front-row tickets for life for one of their album NFTs. Whoever holds the token can redeem it. And it can’t be scalped.
RAC tied his NFT to a cassette tape. 3LAU offered a physical sculpture alongside one of his NFTs and he shipped it out to all 33 people who bought this NFT. He also included an experience – in one of his auctions, the top bidder could collaborate on an upcoming 3LAU track. (When/if the NFT gets resold, the seller does not need to send the physical item – that’s not how NFTs work – this was just a perk for the original buyers).
In this sense, it’s kind of like Patreon or Kickstarter packages.
Artists include merch and experiences in those. However, these can’t be resold and the value doesn’t change. The $100 Kickstarter package costs $100 and when the campaign is over, it’s over.
And the best part is, the original artist makes a commission on every sale.
If I go and sell an original pressing of Vulfpeck’s Thrill of the Arts vinyl record (which I bought from the band for $20) to Amoeba Records for, say, $100, I just made an $80 profit and Vulfpeck made exactly $0 from that sale. When Amoeba sells this record to the customer for $200, Amoeba makes a $100 profit and Vulfpeck also makes exactly $0 from that sale.
With NFTs the original artist gets paid ON EACH TRANSACTION.
When the artist puts up their NFT onto a marketplace, they can set what commission they’d like to earn on each sale: 10%, 25%, 50%. Whatever.
So, a fan could buy an NFT from me for, say, $1,000, and then flip it for a quick profit for, maybe, $1,500. If I set my commission at 25%, then I will have made $1,000 on the first sale AND $375 on the second sale. Let’s say that second person holds onto my NFT and I become super famous and the value of this NFT now skyrockets to $15,000, well I just made an additional $3,750. And so on and so on.
Not only does the artist get paid every time, it incentivizes fans to promote the artists for whom they own NFTs! If the artist becomes more popular, the NFTs will increase in value and that fan can decide to hold onto it for bragging rights or sell it and make them (and the original artist) some money.
And some artists are even offering master ownership and/or royalties baked into the NFT.
So now you’re not just investing in the artist long-term, but you’re earning residuals ongoing. Bye bye labels.
Because NFTs are bought, sold and stored on the blockchain, each one can be transparently verified as to who the original artist is.
And, on the blockchain, every transaction is noted. So anyone can see who sold which NFT to whom.
There are plenty of brilliant art impersonators out there who could recreate a Picasso or Monet and you and I wouldn’t be able to tell the difference. And that’s why the paintings that get sold at auction have all been verified by art experts. Diamonds are verified by experts. Hell, even Yeezys have to be verified before they can be resold on a secondary market.
Well, NFTs don’t have to be verified by an expert because the blockchain is a public record for everyone to see.
Currently most NFTs are on the Ethereum blockchain (not to be confused with Bitcoin blockchain, which hosts, you guessed it, Bitcoin currency). Ethereum blockchain hosts the Ether currency. And most NFT marketplaces require you to use Ether to buy your NFT.
So, How Do You Buy and Sell NFTs?
There are marketplaces out there where you can buy and sell NFTs. Some are curated and invite-only, some are open to anyone. Meaning, you could theoretically upload your piece of art today and list it tonight.
The biggest NFT marketplaces right now are:
Some of these marketplaces allow limited edition sales (like 100 copies for $1,500 each). Some marketplaces are auction only (like, one of one only, for whatever the highest bidder pays). Some marketplaces offer both.
The invite-only marketplaces, like Nifty Gateway, have an entire community built into the platform. So if Nifty Gateway puts up an NFT, that community will typically buy it.
And a somewhat overlooked talking point is that, at this current stage, selling NFTs is EXPENSIVE! There are a ton of fees associated with selling just one NFT. There’s what’s called “gas prices” – for the energy spent to put your NFT on the Ethereum blockchain. And then there are the fees the marketplaces charge. Some charge a commission fee (like 2.5% of the initial sale), others charge more or bake in flat-fees.
Most require you to use Ether to purchase NFTs. So, you have to buy Ether with whatever your local currency is.
Most steps of this process cost money.
It can be a couple hundred bucks to just sell one NFT. So beware!
Who Are NFTs For?
At this stage, 99% of the world has still never heard of NFTs. Even though the tech and music industries are obsessed right now because of headline-making price tags for various sales and auctions (and the sheer absurdity of some of the NFTs).
(yes this is a real NFT)
Most of the people buying them are early-adopters of technology. The gamers. The blockchain aficionados. The crypto club. And most are just speculating. Investing. Hoping they can flip these and make a quick buck.
The reason the majority of the music NFTs have been put up by electronic artists (and especially the blockbusters) is because the electronic community typically takes to early tech like this.
Most average music fans don’t have a crypto wallet. Or an NFT wallet.
And it’s super complicated to buy or sell NFTs. Well, not super complicated if you’re in this community, but I watched a boat load of tutorials and they make it sound sooooo simple, just these 27 steps and you’re there!
NFTs are definitely not hitting the general public most likely for a couple years.
But, what we do know now is, NFTs are the collectibles of the future.
And more importantly, for the artist community, art will be given value once again.
Streaming has completely devalued music. NFTs bring some of that value back.
The person who cried with my song on repeat may spend $5,000 on an original version of the song or visualizer. It’s meaningful to them.
But probably not today. Because they’ve never heard of NFTs, let alone have any Ether currency.
And when that day comes. When recorded music holds value once again. I will celebrate. With my newly minted album.