NFTs change the music industry: goodbye to record labels?

NFTs, non-fungible tokens, have had the potential to increase artistsassets by millions of dollars, setting new records in the art world. The non-fungible works, purchased through Ethereum, involve not only digital paintings or three-dimensional models, but also musical works. For example, artist Grimes has sold $6 million in crypto art through limited edition music videos. The music industry could change at any moment, and the first steps are being taken toward a new future of sound-based art.

The music industry

Generating $11 billion in the United States alone, the music industry is certainly an impressive one, but less so when compared to the film industry ($35 billion in the same year). In addition, the majority of revenues are handled by three record labels: Sony, Warner Music Group and Universal Music Group. Exacerbating the situation is the pandemic that has eliminated concerts and music tours. These, according to Billboard, account for 75% of artists’ income. A new way of making music is needed to support artists. Crypto versions of music albums, which accomplish a transfer of ownership to the buyer, are capable of generating from $20 up to $11 million. Like music producer 3LAU, which reached that figure in less than 24 hours. 

1 billion dollars

Artists in the music scene can enjoy an exorbitant independent income. As a result, the primary source of revenue becomes collectors and fans willing to support the artists. Over $1 billion in NFTs have been bought in recent months and the auction form of buying allows prices to skyrocket. Crypto art is capable of reviving a declining industry where a few majors are in control and benefit from the revenue. The percentages divided to the artists and the streaming on the main listening platforms (Spotify, Apple Music) do not allow enough income (it takes 250 streams to earn a dollar). Artists find themselves finding alternative ways to make money. 

Steve Aoki, Shawn Mendes and Halsey

Steve Aoki, Shawn Mendes and Halsey have planned their rise in crypto art and NFTs, due to the lucrative business that has come their way. Digital art also allows for elements to be added to the individual track or the entire album through CGI videos or noteworthy artwork. The relationship between music creators and labels may soon change to the point where they disappear. Current agreements call for the label to get 80% of the revenue made by the artist, creating a major disadvantage. NFTs can provide new bargaining power to those who own the reins of music creation, or even give them the ability to become independent. What started out as an experiment will become the future of art and music, providing greater freedom and destroying an antiquated system such as the record labels, who own a say and a stake in the artist. The power of NFTs is unique and powerful, giving full ownership to the musician, even with the ability to sell shares through percentages on resale. Crypto art is able to enhance the value of artists and return art to its rightful owner. A new kind of collecting has emerged that supports creativity and protects freedom. Check out the unique works of Valuart, the platform dedicated to buying NFT with unique works by rare artists. 

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