Music NFTs continue to dominate buzzy conversations about the future of the music industry and "Web 3." Most recently, American icons Dolly Parton and Bob Dylan announced they'll be minting their own NFTs.
We constantly see questions around whether or not artists should jump into making their own music NFTs and if there's a golden opportunity ahead for new revenue. And we also see new "companies" popping up and causing a lot of anger when they de facto decide to create NFTs for artists whether they want them or not.
One of the most prominent digital marketplaces for NFTs also recently suspended sales of them due to rampant fakes. Other sites have reported that a lot of people are essentially trying to sell things that don't belong to them.
Adding to the confusion, a lot of NFTs are also wrapped up in cryptocurrency. Given the amount of controversy around both of these spaces, trying to figure out whether it's a smart move to get into the space can prove particularly difficult.
It's getting to the point now where even new artists who just put out their first singles are asking if they're missing an opportunity by not turning those songs into NFTs. Given all the noise, we thought it might be helpful to provide some very simple advice around the subject.
What Are Music NFTs?
When something makes as much noise as quickly as NFTs, sometimes it's important to just take a step back and simplify the concept. After all, if you couldn't succinctly describe what an NFT is to your grandma in a few sentences, you probably shouldn't be trying to sell them.
The term NFT is an acronym for "non-fungible token." It basically means that it is "one-of-a-kind." For instance, the original Mona Lisa is a "non-fungible" painting. It can be approximated, forged, photographed etc., but its value cannot be duplicated because it's an original, "one of one" creation. Money, on the other hand, is fungible. You can give somebody $5 and they can give you a different $5 back and they're both worth the same $5. It's a commodity.
The "token" part of NFT is where the concept starts to diverge from physical non-fungible items. NFTs are by their nature digital. So in order to prove "ownership" of the digital asset, you'd need some sort of ledger or proof. That's where the "token" aspect comes in. This is a pretty simple article explaining it in more detail.
When it comes to music artists, there are different forms of NFTs. Musicians and bands could easily release digital art as an NFT just like artists selling gifs and other images. But they can also "mint" their songs as an NFT and sell them. It's important to note that selling your song as an NFT doesn't mean you're selling any of the underlying copyrights or even the right to duplicate the song. In other words, you could both sell your song as an NFT and release it on all streaming services.
So Why Do People Make Music NFTs?
The simple answer is they're another potential revenue stream. It's important to note that some of the biggest artists releasing NFTs are usually doing so in conjunction with other events or experiences. They're used to commemorate a fan's unique, individual moments in a (usually digital) space.
In some cases, artists package their digital NFTs with other things, like when Kings Of Leon auctioned off front-row seats to all of their headlining shows *in addition* to digital ownership of copies of their album.
In just about every case, the most successful musicians creating NFTs are doing so with various content. Sometimes it's about their music. Other times it's about digital experiences. Often times it's other forms of digital art.
Ok But Why Do People Buy NFTs?
This is where it gets a lot trickier. Ultimately, NFTs are about being a collector. And why do people collect anything? Some people do it because they want to support the creator. Some people do it because they believe the product will increase in value over time. And some people do it because they just like "owning" stuff even if it doesn't really "mean" anything.
When it comes to NFTs, the psychology aspect is certainly a much bigger play. After all, anybody can go look at Jack Dorsey's first tweet. Anybody can even print it out and put it on their wall. So why did somebody pay $2.9 million for it?
But the point of this article isn't dissecting the reasons people do seemingly very weird things. It's to offer some simple advice on whether you should try to sell stuff to people who (may or may not) want to buy it.
Our Simple Advice On Music NFTs
There are downsides to minting and selling music NFTs. They take a lot of resources and despite what some people are pitching, the idea of "energy efficient NFTs" still seems pretty far-fetched.
So if you're very energy conscious and trying to keep a low carbon footprint, the simple answer is no, you should not sell NFTs, or participate in cryptocurrency to the best of your ability.
But if that's not a dealbreaker for you, here's the best advice we can offer. If you already have a very large fanbase and generate considerable value through traditional means (streaming, touring, merch, etc.), test the waters. Many NFT collectors are just that — people who collect. So if there's value associated with your brand, they'll assume there's value associated with your NFT.
But what about the millions of other artists?
If your fans already know what NFTs are and are asking you for them, make them. If not, focus your energy elsewhere.
There are certainly artists who have embraced cryptocurrency and NFTs from the outset. They live in that space. Their fans live in that space. And they can make a good amount of money selling their content as NFTs even if they seemingly have less "going on" by traditional standards.
But if you don't have a fan base that is already interested in this space, you'll be spending a lot of time and money trying to educate them just to create interest around your NFT. After all, it costs money to create and sell them. Your time and energy is probably better spent on developing and monetizing fans the more traditional way.
There are still a ton of questions around the space — from fraud to energy inefficiency to cost — and it won't hurt you to stay back for a while as we get more clarity on these issues.
Plus, pretty much everything you do digitally could be minted as an NFT in the future. It's just another wacky aspect of the entire culture. So it's not like you're necessarily "missing out" on an opportunity here.
A lot of this comes back to the original concept of ignoring the noise. If you don't already love the space, it's not worth emotional energy to stress over something like this.