Crypto Can Become a Source of Income for Musicians
Blockchain technology has shown us that transparency is not a vague concept. Despite the innate human nature of always gunning for the biggest piece of the pie, in the blockchain each person’s intent is known and carefully executed.
Unfortunately, the music industry, as we currently have it, is one area where transparency is nothing but a myth. Many fans might not know it because they are only concerned with their favorite artist’s songs or shows, but there’s a stark difference between what you see and what goes on financially behind the scenes.
The music industry is not what it used to be: revenues totaled only $11 billion in 2019, a figure that looks meager compared to the U.S. film industry and the U.S. information industry, which generated $35 billion and $807 billion, respectively. Sony, Warner and Universal control a large chunk of that $11 billion leaving smaller record labels with relative crumbs. After the expenses of promotion, distribution and production, very little is left for the artists themselves.
The emergence of streaming platforms initially helped. Napster started the revolution that’s been gracefully carried on by Spotify, Apple Music, and other streaming music platforms. Even so, artists’ earnings are still meager. An Insider.com study in 2019 revealed a skewed power structure, with artist income per stream ranging on average from $0.033 to $0.0054. That means the top paid artists would need 30 streams before they earn a dollar while the lesser paid artists would need 200 streams to make the same amount. Most artists recognize this truth and on rely on touring or other endeavors to supply the bulk of their income. According to Billboard, over 75% of artists’ money came from concerts and touring until Covid happened.
Until we get over lockdowns and vaccine administration, artists need highly innovative ways to make money. Fortunately, there’s one way many have yet to exploit; Crypto music.
Music and Crypto
The majority of crypto in the arts has been limited to images. In contrast, the NFT world is extensive, with different industries covering as many assets as can be digitized. For example, the NFT music industry has existed since 2017 and made a steady income for its early entrants. The wave of crypto music is not new, though many are still just getting introduced to it.
NFTs are non-fungible tokens, and unlike our traditional music that can be replicated without permission and fear of copyright infringement, NFTs provide a power shift from the original power brokers to the artists themselves. So when a fan purchases your crypto music, they enjoy the benefits of having an asset on the blockchain, and they can be sure the collection is authentic.
For instance, Grammy award winner RAC has made quite a fortune for himself selling his music in NFT form, joining the crypto party as early as 2017. In fact, one of his cassette tapes sold for $13,000 per piece a few months back. He attributes his success not to his popularity outside the crypto space but to his longevity in buying crypto and enjoying the perks of the crypto space. To make money from crypto art, many new musicians tend to forget that growth takes time. Music cryptocurrency is not a get-to-the-top-quick scheme. Instead, it helps you earn more by cutting little expenses like the exorbitant music producer’s income or the major label deals you signed in a hurry with hopes you’ll be famous.
Another person that made quite a fortune from cryptocurrency is Justin Blau, popularly called 3LAU. A few months ago, in March, he earned over $11.6 million in under 24 hours by selling limited music cryptocurrency from his just-released album. That’s much more than most artists, even the majority of active crypto traders on crypto exchanges like Redot, make in a lifetime. He is not a new player in the field, though, as he has spent over three years in the crypto art space. 50 Cent also ranks high amongst people who use crypto music to earn a fortune (though he only received payment in crypto).
NFTs versus Record Labels
The fight is much more nuanced than simply pitting NFTs vs. record labels, but there is little to counter the fact that a lot will change with a better payment system in the music field. Even famous artists such as Taylor Swift and Jay Z complained about the poor remuneration upcoming artists earn due to opaque contracts that leach most of their earnings to middlemen and record labels.
Here are a couple of reasons that NFT crypto can become an instant hit in the industry:
- Transparency: imagine if artists kept a higher percentage of their earnings. Would they be more motivated? Will we enjoy more direct artist-to-fan relationships? Unfortunately the music world is still mired in record contracts that make it difficult for artists to earn a living. What if we had a smart contract where all agreements are clearly stated and self-executed? Wouldn’t creatives enjoy being creative? With cryptocurrency in music, this problem is easily solved.
- Different sources of income: Not everyone is famous enough to willfully command cult-like follower-ship from fans. Instead of relying on tours, musicians can earn extra income from auctioning digital artwork, music demos, 3D images, video concepts, and tokens on several cryptocurrency music platforms. They can then earn cryptocurrencies from superfans who want to show their support and dedication. Artists can also run a royalty-based payment system where fans earn a share from their released songs.
- Better Fandom: Popular artists understand the importance of connecting with fans, so they spend quality time interacting with them or employ highly skilled professionals to keep their bases growing. With cryptocurrency, fans can get exclusive access to demos of future songs, send tips to motivate artists, and buy digital products which can be flaunted on social media.