Updated: May 17
In this article, we demystify NFTs and explain the real opportunity for independent musicians.
What is an NFT?
When I was young I traded PANINI football stickers, just imagine if PANINI decided to only print one Lionel Messi football sticker rather than 1,000,000. Now imagine you were lucky enough to own it, had proof you were the only one to own it and there was no way you could lose it. That's basically the principle behind an NFT. Now swap Lionel Messi's face out for a unique piece of art, music, video, invite to an exclusive event or even an item of clothing (physical or digital) and you have an NFT.
Why are NFTs interesting to independent artists?
Up until this point success in music has always been reliant on reaching a mass audience.
Selling millions of physical records, CDs, tapes, DVDs
Selling millions of downloads
Generating millions of streams
Selling millions of tickets to live shows
Reaching millions of people on TV, radio
This reliance on mass reach means lots of incredible independent artists never get heard and if they don't get heard, they don't get paid. Consider this, just 0.7% of the artists on Spotify take 90% of the revenues. That's depressing especially when you realise 93% of the music released on Spotify last year was provided by unsigned artists and indie labels.
With the odds of financially sustainable success so firmly against them, it's unsurprising that some independent artists are questioning whether there could be another way.
NFTs and the power of scarcity
The NFT purchase represents a new model, which returns the focus to ownership over access. The key difference now is scarcity. For the first time, independent musicians don't need a million people to buy or stream their music to earn anything close to a proper income.
The new wave of 'indie-preneurs' are now making a living by selling and reselling just 5, 10, 15, or maybe 50 limited edition pieces of unique content. Finally finding your niche actually pays.
How the music NFT community grew
While audio app Clubhouse seemingly came and went in the blink of an eye, the idea of audio conversations didn't die, they just shifted to a new location. Twitter Spaces has become the destination for the burgeoning music NFT community and it's the best place to explore this world and meet the key players.
Meet the Independent Artist Winning at NFTs
NiftySax is one of the most influential artists in the scene. His journey into NFTs began during the pandemic, unable to play live he used this constraint as an opportunity to learn something new, educating himself on the blockchain.
He quickly spotted an opportunity to use NFTs to sell music and became one of the first to create instrumental NFTs. His first drop quickly sold out making him around £50,000 and when collectors started reselling his work his income soared past the £120,000 mark.
NiftySax now helps other artists to do the same through his swiftly established business NiftyMusic, a very modern take on the record label.
Who is buying music NFT?
If you expected NFT sales to be driven by existing fans of these artists on Instagram, Facebook or YouTube you would be wrong. NFTs buyers represent a new audience of investors, collectors and speculators. While they might be interested in the music, they are also interested in smart investments. There are parallels here with the real world, if you ever find yourself at Sotherby's you'll notice the buyers are investors, not just art lovers.
Can meaningful fan engagement ever be fostered on Instagram? Are Facebook, and Instagram increasingly going the way of Myspace where organic reach falls, follower numbers increase and engagement rates decrease to the extent that the value of the platform all but disappears? A few years ago it felt like Twitter was the social network with the least traction, but when it comes to NFTs Twitter is the place to be, especially since the addition of Spaces. Musicians want a channel where they can easily share links and the audio is always on.
Looking to the future
The things that helped get you where they are today, won't necessarily be the same as the things that get you where you want to be in the future.
There is no doubt that having success on Spotify can make you more investable, but this is only a small part. To succeed in this space you need to hang around. Just because you have 10 million streams on Spotify doesn't guarantee success. If you drop in and quickly drop out your NFTs won't hold their value.
What you need to get involved
Understand the basics
Follow NiftySax on Twitter
Attend Twitter Spaces NFT discussions
Then when you feel confident to take the next step
You need a Crypto wallet we recommend you start with MetaMask
Buy some Crypto by transferring money into MetaMask from your bank
Head to a marketplace like Open Sea to buy and sell NFTs
Are you a musician looking for more help and support?
Check out our FREE music marketing webinar. We'll show you how to plan to release your music more effectively.
Words Mark Knight