NFTs have skyrocketed in popularity in a short amount of time. At the start of 2021, they were barely on anyone’s radar. By March, they were being utilized by big names, including Kings of Leon and Snoop Dogg.
But, while the technology behind NFTs is still very young, there is no doubt about the potential they have in creative industries. As NFT technology and infrastructure develop, the disruptive impact it will have on the music industry could be monumental.
In February 2021 alone, NFTs raked in around 22 million dollars, according to research done by Water & Music. There are also plenty of unbelievable stories of NFTs making artists insane profits—like 3LAU’s $11.7 Million NFT haul.
But, NFTs can offer more to artists than sensationalized profits. They can add a level of digital scarcity to your music, promoting unique opportunities for fans and collectors. Let’s explore what NFTs are and how they can add value to your future releases.
What are NFTs?
NFT stands for Non-Fungible-Token. Basically, NFTs utilize blockchain technology’s secure and transparent nature to create unique tokens that can’t be tampered with or re-created.
While you may have heard of cryptocurrency behemoths like Bitcoin, NFTs are a bit different. You see, Bitcoin uses blockchain technology to tackle decentralized monetary transactions.
NFTs, on the other hand, utilize more advanced blockchains to create one-of-a-kind collectibles on-chain using smart contracts. So, unlike other cryptocurrencies, NFTs can’t directly be exchanged with one another. No two NFTs are identical.
A couple of blockchains out there can support NFT minting, but the vast majority are built on Ethereum token standards ERC-721 and ERC-1155.
There are some other attributes to NFTs that make them so unique:
- Indivisible—NFTs can’t be divided into smaller allocations. They exist as a whole item.
- Indestructible—Since NFTs are securely stored on the blockchain via smart contracts, there is no way someone can destroy them.
- Verifiable—Since NFT ownership data is stored on the public blockchain ledger, you can easily trace original releases back to verify ownership.
If it all seems like a lot to take in, think of it this way: NFTs are like digital collectibles. When you create one, you are minting a one-of-a-kind item. The underlying blockchain technology can be confusing, but essentially it helps create authenticity and verifiability for these collectibles.
Why Would Anyone Want to Buy an NFT Music Release?
Much like other collectibles, like a rare baseball card or an original Van Gogh painting, the value of an NFT is derived from supply and demand. Due to the scarce nature of NFTs, there is a high demand for these digital assets.
It can give collectors and fans alike immutable ownership of a piece of their favorite artist or band. But why do they hold value in the first place?
They offer something previously impossible in the digital space: true ownership. When you release a song, it can be replayed, replicated, copied, and altered. When you release an NFT, there is only one copy, and it can’t be changed.
Take a look at this list of physical items that can be produced in a limited fashion.
- Special vinyl release
- Deluxe version of an album with extra tracks or commentary
- Limited edition merch drop
What gives these things value? What makes that special edition vinyl of your latest album so alluring to fans? That value is driven by scarcity in the same way that NFTs are.
How You Can NFTs Integrate with Your Overall Release Strategy
NFTs can play a unique role in your upcoming releases. You can use them in a few different ways to add a special element to a single release or an album drop. Keep in mind that the name of the game is scarcity, so don’t think that NFTs need to be a part of everything you do.
But, understanding them and the overall NFT market can help you create some additional value for your fans and make you additional revenue.
Let’s face it, releasing music today requires a multi-channel approach to marketing. To make a splash, you need to encompass other types of outlets like social media and even visual media.
NFTs can be another tool in your repertoire to create an engaging, creative, and rewarding experience for your listeners and fans. They can give people a piece of your work that is one of a kind.
Here are a couple of ways to incorporate them into your releases:
- Add limited edition NFT tokens to things like single releases—While you can release NFT of the track itself, you can also sell the actual release as an NFT as well.
- Create unique visual NFTs to accompany tracks—These can be separate collectibles tied to your track, creating a visual layer to every release.
- Incorporate NFTs into limited-edition merchandise—You can offer the NFTs of the merch and even create in-game items.
- Design NFT packages—Incorporate digital goods with limited edition physical collectibles. This can be a deluxe album package that includes an NFT as a true digital asset and a physical piece of work like a special album cover.
When it comes to how you sell your NFTs, be creative. Fans are always on the lookout for new experiences with their favorite artists, giving them something fresh that they haven’t seen before.
With every piece of digital work sold as an NFT, Beeple includes a physical copy of the work in the form of a tablet that displays the piece of art. This extra layer adds to the experience of buying and viewing the digital work.
While this may not be the only reason behind his wild success, it certainly shows how a little creativity can help you stand out. He was able to bridge the esoteric divide between the physical and the digital world.
Listen, there’s a lot to know about NFTs and crypto space, too much for this one article. But, we have explored what these collectibles are and how you can use them in our releases.
Blockchain technology can be confusing, and honestly, you don’t need to have a high-level understanding to start minting and selling NFTs. If you want to know how you can create NFTs, we’ve got an excellent video covering the subject.
Hopefully, you’ll walk away from this article with some fresh ideas about how to create one-of-a-kind experiences for your fans. While you might not fetch several million in an NFT drop, you can at the very least create something special for your listeners.