NFTs are placing power back in the hands of musicians…

A$AP Rocky has stolen the headlines once again but not in the way fans might expect. The modish Harlem rapper is making a name for himself in the cryptocurrency world, auctioning his limited-edition music as Non-Fungible Tokens. Although he’s not the first musician to take this venturesome leap into the digital world, his honoured status could set the ball rolling for other reputable figures to follow in his footsteps.

NFTs (or Non-Fungible Tokens) are digital collectibles that use blockchain technology like Ethereum and Tezos so they can’t be duplicated, making the product a finite resource due to its limited accessibility. NFTs have the potential to generate huge revenue due to the fact they can’t be reproduced at the hands of forgers. This unreleased content is desirable for the same reason that a signed vinyl record might be desirable to a collector: it’s rare and valuable.

Although copies of these digital files are widely available online, the highest bidder obtains complete ownership of the original file to do with as they please. While these rare files come with exorbitant price tags, they can prove to be fruitful investments in the long run because digital collectors are always willing to pay top dollar for something produced by a reputable artist.

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The stylish rapper is the latest musician to join the trend of releasing content in the form of Non-Fungible Tokens. His debut NFT collection will be made available this week and will include an unreleased snippet of his track ‘Sandman’ which was teased earlier in the year during a virtual event in tribute to his late friend, A$AP Yams.

This development comes only weeks after The Weeknd sold his latest song in the format of NFTs. The atmospheric track – apparently titled ‘Leave You Alone’ – and its accompanied artwork was made available for auction over 24 hours, with the highest bidder purchasing the exclusive ownership for half a million dollars.

This might seem like an extortionate sum of money at face value, especially for something which sounds akin to a throwaway outro from the After Hours album, but consider it like paying for an original Mona Lisa signed by Leonardo Da Vinci himself. With the help of blockchain technology, the owners can rest easier at night knowing their investment is safe from imitation. What’s more, they can decide either to treasure it as a keepsake or eventually sell it off for profit when the market appreciates.

NFTs are not an entirely foreign concept for the music industry – this form of digital auctioning has been around ever since the emergence of online distribution itself. For example, Martin Shkreli brought the only existing copy of Wu-Tang Clan’s seventh studio album, ‘Once Upon a Time in Shaolin’. Contained in an embellished silver box, the project was auctioned by the company Paddle8 before it was eventually snatched up by the shameless hedge fund manager for $2 million in 2015. 

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It’s only now with the stark exploitation of profit from middlemen corporations that musicians are waking up to the benefits of using NFTs. A Citigroup report published in August 2018 stated that artists receive only 12% of all the revenue generated in the music industry, notwithstanding the fact that its annual profits exceed $43 billion. These staggering figures reveal that streaming platforms and record labels are milking artists in order to afford the expenses of distribution and production. Therefore, it is no great surprise to find more distinguished artists turning in favour of the digital marketplace.

With the current streaming framework in place, artists with relatively small fanbases make comparatively little alongside the commercial heavyweights of the music industry. The most active streaming service in the world, Spotify, with 299 million monthly users, has an approximate payout of £0.0025 per play. Therefore, a musician must tally one million clicks to earn just £2,500. A campaign group called Justice At Spotify calculated that, “it would take 786 streams to generate enough revenue to buy an average cup of coffee.” If it were not for touring or selling merchandise, many of these artists would struggle to stay financially afloat.

These swindling negotiations have left creators scratching their heads over why they are contributing to an industry which blatantly favours only the top 1% of musicians, while the struggling majority are left competing for leftover crumbs. However, the introduction of NFTs are drastically reshaping the music industry by transferring power back into the hands of the musicians. This new digital platform allows creators to bypass the avaricious claws of these corporate giants and enjoy the fruits of their labour.

The global pandemic has certainly contributed towards this recent surge in popularity for NFTs. Since all tours and festivals have been cancelled over the last year musicians have been left with little choice but to find new means of income elsewhere. With blockchain technology democratizing an industry, “that has historically been kept shut by the gatekeepers,” it’s possible that a larger vanguard of artists will eventually dabble in this digital empire, especially under the current social conditions.

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The reason why NFTs have so much upside potential for reshaping the future of music is because artists can negotiate certain privileges for the highest bidder. For example, musician and producer 3LAU has recently sold an NFT collection worth up to $11.6 million. However, he also announced that the winner of the auction would get the opportunity to feature on his next song. These added utilities are revolutionary, particularly if more recognised musicians continue with this trend. It will increase the demand without the interference of record labels and give wealthy dedicated fans the chance of receiving extraordinary rewards.

Besides the chance of obtaining exclusive ownership to ‘Sandman’, A$AP Rocky has also announced that everyone who purchases the NFT will subsequently be entered into a raffle for the opportunity to win either an exclusive studio session or a customised vehicle from his Injured Generation Tour.

A$AP Rocky’s arrival into the NFT space is a watershed moment for the future of this digital marketplace. Despite a three-year hiatus since his last album Testing, the sleek fashionista is still recognised as one of the most decorated rappers of his generation. His participation in blockchain technology further validates the digital platform, opening doors for other artists to do likewise.

There is no forecasting exactly how far NFTs will affect the music industry but if things continue on the same upward trajectory then it could spell disaster for middlemen corporations. But whatever the future holds for music distribution, this digital platform is not going to disappear any time soon and could well become a linchpin of the industry if more notable artists decide to migrate over to digital auctioning.

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Words: Richard Sayell

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