WTF are NFTs?
How NFTs may change the music industry
It’s no secret that the world of music has been digitalizing faster than the industry can keep up with. Since the correction of Napster’s global music heist at the turn of the century and the idea of listening to music files on the internet, the music revenue that artists earn from online consumption has been like the wild west. Some of the rightful revenue earned isn’t even paid out, and in other cases—it’s misplaced.
In fact, unbeknownst to many, there is an entire underground economy of unclaimed royalties, called “black box revenue:” massive amounts of money frozen in accounts accumulating interest that have never been claimed. Of course—the big problem—most artists are unaware of what income never made it to their accounts. Even more tragic, the money often ends up as collection agencies’ bonus checks, overhead dividends, company lunches, etc.
The introduction of The Music Modernization Act (MMA) was a step in the right direction, offering a licensing collective database to clean up the routing, but NFTs could have the potential to change the game even further, and faster than the new legislation. What is an NFT? A non-fungible token. For anyone who isn’t familiar to the world of blockchains and cryptocurrency—yes—it’s as confusing as it sounds.
But simply put, a blockchain is a digital ledger that is unable to be modified, so even as it may be copied and shared in a number of ways, a non-fungible token provides a digital certificate of ownership thanks to blockchain technology.
Provable ownership means worth is reintroduced to artistic entities on the internet. In fact, an NFT by the artist Beeple, titled “Everydays: The First 5,000 Days,” sold in auction for $69.3 million. But the internet currently remains a shaky environment in buying these collectibles without copyright. As said last month by Pitchfork, “born out of the visual art world, NFTs create a sense of scarcity that’s inherently artificial—the token is rare, not the artwork itself.”
Paperchain—a company based in London—is seeking out to clean up this messy side to the industry. Co-founder of the company, Rahul Rumalla, said to Digital Music News, “our focus is not to replace the current digital supply chain, but to make the flow of rights data work better.” Sound similar to anything?
While, “[t]he MLC does not have any current plans to incorporate blockchain technology into its systems,” according to their FAQ page, many industry professionals like Rumalla are clearly thinking in terms of secure, unmalleable ways to get the right revenue amount directly to the right artists and companies involved. NFTs seem to be inherently tied to that future.
Bluebox, launched by Ditto Music, uses blockchain to pay out royalties, claiming to Music Business Worldwide (MBW) “higher collection rates [while] massively reducing the loss of earnings currently experienced by artists.” Their co-founder and CEO, Lee Parsons, sees how NFTs change the game in allowing easily tradeable assets for artists, saying to MBW, “Opulous and Bluebox are very much intertwined into the vision we have for the next decade in the music industry. And it’s a vision in which NFTs promise to play an important role.” The format certainly promises to change the value of exclusive, online ownership of music and other art.
This is a selection from the April 28 issue. To view the full issue, visit: https://online.flippingbook.com/view/141748577/
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