NFTs will save the music industry!
NFTs will restore music’s value!
NFTs will help artists merchandise themselves!
These are just some of the claims I’ve been hearing about NFTs, which are all the rage in the music press and… on Clubhouse.
Every music biz discussion these days is filled with chatter about NFTs. Every business magazine is talking up NFTs like it’s some Gold Rush. Silicon Valley cheerleaders are scooping up NFTs left and right!
Saturday Night Live even did a sketch about NFTs:
So here’s what you need to know about NFTs if you’re a DIY musician:
Forget about them (for now).
Seriously, you will know when it’s time for NFTs. Until then, don’t worry.
Yes, if you’re a big enough artist to capitalize on verifiably-limited digital products, cool — dive into NFTs (or let your manager handle it).
And yes, there are many promising big-picture possibilities (and exciting current uses) for NFTs. They could end the practice of ticket scalping, which would help both fans and artists. NFTs could also benefit artists who license their music. And the Blockchain could stand in for copyright registration, since it’s acting as a similar time-based witness of a work’s creation and usage. The list goes on.
But if you’re a brand new or emerging artist, still working hard to simply reach listeners, drive awareness, and build a modest fanbase, there are other things you should focus on. Turn around now. Stop reading. Stop reading!!!
Oh, still here? Okay, fine. Let’s learn about NFTs then: What they are, how to mint them, and why they’re not the answer to your prayers.
What is an NFT and why do they matter to the music industry?
To oversimplify: an NFT is a limited digital item. Think of it like virtual merch or artwork.
Something rare or one-of-a-kind.
Who buys music-related NFTs? Collectors, diehard fans, and randos that have money to burn proving their cache in the Secret Order of Aficionados.
“NFT” stands for “non-fungible token.”
[Remember, you still have time to turn around. After a term like “non-fungible token,” I hope you make the right choice.]
A non-fungible token is a unit of data that lives on a blockchain; a blockchain is a public, digital ledger proving ownership. The “public,” distributed nature of that ledger helps prevent tampering and fraud. Thus the blockchain also helps ensure proper rights attributions and allows for the tracking of subsequent transactions as the NFT is bought, sold, or traded.
Whenever the NFT is re-sold, the original creator can earn a percentage of all future transactions. In perpetuity. That means the revenue you earn per sale will likely increase as your career and stature grow as an artist. Because the same NFT now commands a higher price.
Cool, right? But there are (at least) five problems with NFTs.
1. NFTs don’t invent demand
For our purposes, let’s say your NFT is some form of digital music content, such as:
- A complete song
- A riff or musical idea
- An image of the album cover
- A band logo
- A concert recording
- A filter
- A music video
Or maybe it’s a Microsoft Paint image you made when you were 4 years old. Or perhaps you’ve decided to express your musical brand in the form of animated trading-card GIFs that resemble Garbage Pail Kids.
While any of those files might be replicable, the “official” NFT version is not — thus limiting ownership, and rendering that particular presentation of the digital content more rare. In theory, when quantity is limited, value increases.
But only if there’s demand. Just because my neighbor made a one-of-a-kind voice memo of his dog barking doesn’t mean I want to buy it.
As Vladislav Ginzburg says, “the traditional principles that govern the value of collectibles still apply—quality, authorship, uniqueness, scarcity, provenance, and cultural relevance.”
Ask yourself this: Do I have diehard fans with expendable income who will pay big money for an NFT if the same content is available elsewhere online for free?
[Remember, you can stop reading at any time.]
BUT WAIT! Didn’t I say NFTs are all about limited quantities? Why would the same NFT content be available elsewhere online?
Because let’s get real for a second; you don’t have extra time in your life.
Already selling shirts and vinyl? Great. Sell those better.
2. DIY musicians must be selective about scarcity
As an independent musician you might already be responsible for songwriting, recording, videography, editing, design, marketing, touring, and occasionally sleeping.
You don’t have bandwidth to create one set of amazing songs that are widely available on Spotify, AND THEN make a bunch of separate songs that only a few people can hear.
You don’t have time to make a bunch of great music videos for TikTok, YouTube, Instagram, Facebook, Triller, and Snapchat, AND THEN have a whole other production process for limited-edition videos.
I mean, sure — once in a while you might do something like that. But this isn’t a sustainable habit for the average indie artist.
Whenever you create something great, it’s to your advantage to deploy that content as widely as you can in order to reach and entertain as many people as possible. Not sell rare gems to whatever rich weirdo wants to hoard a piece of your brilliance.
And seriously, can we talk for a second about the type of fan who wants to be the ONLY person to hear a particular album, or see a painting, or read a one-of-a-kind book? What’s their deal?
Music is personal, but it’s also communal. It should be shared. With the audience. But also amongst the audience.
3. You’re competing with famous artists
What people are really obsessed with right now is the trendy concept and delivery format of an NFT, not necessarily the contents inside. It’s an economy and news story based mostly on hype. The hype is fueled by already famous or well-connected people cashing in.
Once NFTs lose their de facto luster, we’ll have a musical landscape that is crowded with competition, and fewer investor-types who want to buy NFTs “just because.”
Which leaves you in exactly the same place you are right now.
Depending on your outlook today, you’re either competing with Beyoncé for streaming attention (and losing) or responsibly acting like the cottage industry you are! Meaning that your success is tied to the ways in which you appeal directly to your fans, asking them to do something that has an immediate impact on your career.
If that’s where you’re already at, what’s the benefit (to you) of an NFT?
Your fan is probably MORE likely to send you $1000 USD through PayPal for a signed vinyl and their name in the liner notes. Because to purchase an NFT, that same person would have to Google what the hell an NFT is in the first place, acquire the crypto to buy it (yeah, you and your fans will need cryptocurrency to dabble in NFTs), and then they’ll have to jump through a few more hoops to finally purchase.
That’s a lot of obstacles to overcome for the average music fan.
4. You rarely benefit from evangelizing a new platform or technology
In the limited time that you command your fans’ attention, you need to deepen that relationship, either by furthering your own story or learning more about theirs.
How much time can you afford to spend teaching your fans about some new app, marketplace, or digital trend they don’t care about yet?
Once they DO care, be there. Until then, be where they already are.
5. NFTs solve problems that don’t exist for lesser-known artists
Some people I really respect are thrilled about NFTs. And I know I probably sound like a luddite here, but your average DIY artist just doesn’t suffer from the problems that crypto/blockchain enthusiasts assume need to be solved.
Digital music usage is already being tracked and monetized in a more thorough way than ever before. Rights are being accurately claimed. Royalties are being paid. It’s not a problem of payments.
DIY artists also don’t have a problem creating exclusivity or scarcity. Prior to NFTs there were plenty of IRL ways to provide that value: limited pressings, meet-and-greets, private Zoom concerts, signed CDs.
But speaking of rarity, in the digital age a lot of this stuff just seems like false-scarcity to me.
Theorize and mathamattack me all you want. I think we’re wired to see a difference between scarcity in the virtual realm and scarcity in the physical world. And yes, I know an NFT is pretty much the same as arbitrarily saying “I’m only going to print 25 of these shirts, so order now!”
But it still FEEEEEELS different to your average human (at least today) when the entire process from creating, to buying, to accessing an NFT happens digitally.
What is the real problem for your average artist? Same as always. Obscurity.
Get past that giant issuue and you won’t have any trouble selling things: NFTs, boxed sets, old socks…
How to mint and sell your own NFTs
So, you still want to make some of your own NFTs? I award you 100 points for stubbornness.
Here are the basic steps you’ll have to take to create and sell NFTs related to your music:
Ready your wallet
You’ll need a way to buy, sell, or swap NFTs.
A “wallet” is a digital place to store your cryptocurrency while also storing private data used to validate transactions. Some wallets are used for specific currencies, such as Bitcoin, while others allow for multiple cryptocurrencies.
With something like MetaMask (available on mobile and as a Chrome extension) you have a secure way to access Blockchain-based applications. More to the point, this is the way you’ll get paid for your NFT sales!
Just be sure to do your research on which wallet is best for you. Also be sure to download it from the correct official source — because there are some scams that trick people into going through a fraudulent signup flow.
NOTE: A new-ish, free app called S!NG gives you a way to create NFTs without a wallet. You can list those NFTs on the Open Sea marketplace mentioned in more detail below.
Fill your wallet…
… with cryptocurrency such as ETH, BTC, USDC, DAI. You’re going to need crypto in order to cover the costs of creating your NFTs.
Choose your NFT marketplace
A marketplace is where people make, buy, sell, and trade NFTs. Check out options such as https://opensea.io/ where you can “mint” and sell the NFT in the same place. When you create an account you’ll also be able to flesh out your profile as an artist/seller.
Create an NFT collection
Within OpenSea, you can list collections of NFTs (items that are grouped together by theme or series). Give the collection a good name and description.
Mint your tokens!
Once your collection is created, you get to the fun part — actually making your NFTs.
You can upload a digital file along with any other unlockable content that you want to be bundled with the NFT. Then write a description for the item.
Set the quantity and initial price of your NFT
Now you choose how many of this particular NFT item you want to make available. Remember: limited is the name of the game. One-of-a-kind is always an option too.
After you set the quantity, list the buying price.
If your NFTs don’t sell at the asking price on Open Sea, someone can enter a bid at a lower price. It’s up to you whether you want to say yes or no.
One other thing to know, the cost to “mint” these tokens is paid (by you) in crypto when the NFT actually sells.
Tell people you’re selling NFTs
Again, I wouldn’t expect armies of rich folk to come calling. So it’s up to you to spread the word about your exclusive, digital merch.
But holy moly that was a lot of work to make, list, and market this NFT stuff, wasn’t it?
Maybe you should’ve just offered your fans some autographed vinyl. ; )
Are NFTs the future of the music industry?
How much should that matter to your average DIY musician in the present moment?
Keep focusing on getting your music out there, making connections, and building an audience. Then do a better job of selling them the merch, experiences, and patronage access you already offer.