Can crypto fix music industry?
This week the legendary magazine Rolling Stone sold two NFT covers featuring Apes from the Bored Apes Yacht Club for ~$620k, while Universal Music Group and Timbaland have both announced the formation of virtual music bands composed of the Apes from the BAYC 😄
Music and crypto industries have been drawn near for some time already, and they can both benefit from the synergy: crypto getting more exposure and music professionals improving their business, whether it is selling music, concert tickets and collectibles, or streaming.
In the era of streaming, music possession has become almost obsolete, but the blockchain can make it desirable again, at least for the real fans.
In February’21 Linkin Park’s Mike Shinoda became the first major-label artist to release a single as an NFT, followed by Kings of Leon who released an album both on streaming platforms and in the form of NFT, adding some perks for the fans ( special album package, front-row seats to the concerts, audiovisual art…). Kings of Leon NFTs generated over $2M of additional revenue for the band.
This week, Ape-In Productions (Timbaland’s new production company for Bored Apes owners that will create music and animation around them) released the first single of the virtual band TheZoo as an NFT.
When it comes to selling tickets, blockchain can not only streamline the process, bypassing numerous middleman, it can also help fighting against bad players in the secondary ticketing market. Platforms like Yellowheart can inscribe the rules for ticket sales into the smart contract of an associated NFT, like “This is the price of a seat”, “This is the maximum reseller price”, “This is the maximum number of times the ticket can be resold”…
Selling tickets as NFTs can also help distribute the revenue in a more transparent way. Their smart contracts can be programmed to send the agreed % of the price to the artist, promoter, the venue… and do it not only for the initial ticket sale, but for every consecutive resale too. The NFT issuer can decide where the money above ticket face value goes: split between all the participants of the concert, given to charity… etc
As NFTs become popular, more and more artist use them to sell all kinds of creative products.
Artists like Grimes, DJ Steve Aoki and Snoop Dogg made headlines by releasing musical NFTs, while Jay-Z and Maroon 5 sold animated versions of their cover albums, raising millions of dollars.
Star NFTs offer fans scarce collectibles with verifiable authenticity – they can always see where it came from. To the artists NFTs can offer the ease of worldwide selling and re-selling: NFTs can be programmed to pay a royalty % each time they are resold.
Unsurprisingly, the streaming business too can benefit from the blockchain, and the most eminent project in this space is Audius – a platform promising users not only being able to pay for music in crypto, but to essentially crowdfund musicians’ projects and participate long-term in their growth.
Unlike the existing platforms like Spotify (average payout $0.003 - $0.005 per stream), Audius will propose artists highly customized terms, so that they will be able to choose how much and which titles they would like to charge for.
For the moment Audius is in promotional phase, with monetization phase coming later. However, the project already launched its governance token $AUDIO and secured a partnership with TikTok, allowing its users to discover new artists through the app. Audius has already enrolled over 100k artists who uploaded their music to the platform.
In the concert-less Covid time the fragility of artists’ revenue has become painfully clear for many. Giving artists power and control over their art, while creating a new financial system for the music industry and getting rid of so many middlemen who stand between the artists and their fans – this is the ultimate promise of crypto.
As the industry develops, more useful applications could be thought of, like, for example, creating a tool which would gather all of an artist’s revenue streams (collectibles, concerts, royalties etc), or developing virtual concerts in the metaverse…
Another industry is about to be disrupted 😁
Art and NFT
Bored Apes Yacht Club is undoubtedly the star NFT series of the week. Apes’ bands produced by Universal and Timbaland ambition to become the new Gorrillaz, showing not only how high is the hype around them, but also how powerful NFTs are in securing ownership rights. Universal-produced Apes band Kingship will actually “hire” the Apes belonging to a collector Jimmy McNelis, who will get royalties for letting use his Apes.
The Apes are becoming a great deal, and many celebrities are jumping on board: TV host Jimmy Fallon, rappers Post Malone, Lil Baby and Timbaland, DJ Steve Aoki, basketball players Shaquille O’Neal and Steph Curry… The NFTs are here to stay, and celebrities’ endorsement helps making it mainstream.
Bitcoin price fell 13% this week, currently at $57’500 level. It started dropping the day President Biden signed into law his Infrastructure Bill that contains constraining provisions for the crypto industry. Since then two bills aiming at overriding these provisions were proposed by pro-crypto Senators Wyden and Lummis and Ted Cruz.
In the meantime, India is rumored to soon introduce its crypto legislation - a much-expected event in a country with the second-best crypto adoption, but where all crypto activities are still in a grey regulatory area.
El Salvador has already defined its stance on crypto, and now President Bukele is about to conquer new highs. This Saturday he announced the country’s intention to build a tax-free (except VAT) and fully ecological Bitcoin City, funded by Bitcoin-backed bonds. These 10-years “Volcano Bonds”, worth $1Bn and with an interest rate of 6.5%, are to be issued next year.
Following Bitcoin, Ethereum fell -16%, but has better recovered since, now staying at $4’200 level.
Quote of the week
“What looks like a very interesting and somewhat exotic effort to literally mine new coins in order to trade with them has the potential for undermining currencies, for undermining the role of the dollar as the reserve currency, for destabilizing nations, perhaps starting with small ones but going much larger.”
Hillary Clinton, lifelong US politician with a soft spot for the Establishment