This utopian ideal may seem realistic on paper, but how does it translate in reality? Not very well.
Music has “transformed” in recent decades, but it seems that someone is left behind. The saddest part is that people who were left behind are the very ones who make us all laugh, get goose bumps, and make our feet move.
Streaming is economically challenging. According to this business model, platforms like Spotify take a cut of every stream. Although Spotify provides better-than-nothing distribution, there is still a significant issue. Ultimately, approximately 70% of the proceeds go to music rights holders, and the discovery feature tends to place lesser-known artists at a disadvantage compared to household names. Consequently, top-heavy distribution funnels benefit already-established musicians.
It isn’t news that the music industry is still rather damp and dark for most artists attempting to make a living through creating and doing the above. Intermediaries still try to undercut those who matter most by trying to take advantage of revenue-hogging strategies. There is a good chance that you struggle to make ends meet if you’re not like Taylor Swift, Billie Eilish, and Justin Bieber. You probably don’t get your due either if you are like them.
The good news is that change is on its way. Scratch that – change has already begun.
The beginning of a new era in music
The nonfungible token (NFT) and the underlying technology offer a level-playing field for artists. Through NFTs, digital scarcity is made real and assetized. Meanwhile, they give musicians, designers, and everyone in-between complete control over the distribution of their work.
Do you remember the first NFT you bought? And do you also remember the feeling after you bought it? Felt quite remarkable, didn’t it? That’s another thing about digital collectibles — owning them, stacking them, is simply intoxicating.
Now, imagine if you could support your favorite artist and get your hands on their latest hit directly from them and get the “NFT kick” out of it too. Say you want to attend a festival filled with all your favorite DJs — wouldn’t it be an absolute delight to be able to get your ticket straight from the source? And how rad would it be to also get a unique, customized and one-of-a-kind proof of attendance with your very own name in there? Now we’re talking.
Alright, that’s all cool and soon to be ubiquitous, but what’s the deal with streaming platforms like Spotify? Great question. Most certainly mean well (at least so we hope) and have moved the needle in the right direction. However, that’s not quite enough in a world littered with arbitrary numbers and standardized screens.
Giving music a sense of uniqueness by reintroducing scarcity
Digital scarcity allows fans to form more profound connections with their favorite artists and create a more unique user experience.
For fans to form more profound connections with their favorite musicians, digital scarcity is necessary to create a unique user experience. But Spotify doesn’t have a scarcity system. If you are a diehard fan of the Canadian producer and DJ Deadmau5, you will probably want to own the #1 release of any given track. Then there’s the #10 release, or #50 – something with a higher intrinsic value that shows your love of the artist. How come this doesn’t exist?
Such a “tiered” system of releasing music would undoubtedly benefit the artist since limited and early editions imply higher value. At the same time, it also enables fans to grow together with the artist. Take that #1 release of a Deadmau5 track you own as an example. The moment the track makes it into, say, the Weekly Top 10, others will see your name right next to it — that way, fans can get a slice of the “fame” pie.
At some point and for whatever reason, it might make sense for a fan to sell that #1 release NFT. Care to guess who would get a cut of that sale? Correct — the artist.
Direct one-on-one interaction, a margin of clout for the fans, an enhanced sense of belonging, and deeper connections — that’s one reason, or three reasons rather, why NFTs are en route to causing a fair share of trembling at the next Spotify shareholder meeting. The other? Enabling and empowering artists and putting them back in the driver’s seat.
The creator economy is entering a new era
You see, music streaming platforms stripped value away from musicians by standardizing everything, and the past few decades’ worth of digitalization largely created an environment that limits the artist’s control over distribution. With NFTs, this control is now present again — you can program and track anything and do whatever you want with your music if its initial release to the world utilizes NFT technology.
Additionally, you can now introduce creative twists like revenue-sharing to give your fans a piece of the pie. When an artist gets popular, fans are happy – it’s a win-win situation. If we combine that with the ideas outlined above, we have a recipe for success. It’s hard to believe, isn’t it?
NFTs represent the next logical step to enabling and empowering artists even more in this new era of the creator economy. In a market that benefits from uniqueness, it is time to restore scarcity and give the driving seat to those who are best prepared to face the challenges ahead.
Get ready for NFTs.
StacksWall does not necessarily represent or reflect the views and opinions of the author.