Opinion: NFT makes music an investable asset

Maker expectations: music and distributed accounting technology

Music tokenization is still in an experimental stage, but my long-term vision is: one day digital collections will have independent rights to music production, allowing artists and fans in the music industry to make direct (non-intermediary) contact.

After months of brainstorming about the tokenization of music, I discovered three indispensable elements that make up the layers of the song collection:

• Visual layer (song cover)

• Hearing layer (tokenized audio file)

• Physical layer (the physical object that represents the track).

I am very happy to share the above framework on Nifty Gateway. This is my first independent show! On January 22nd, I'll be releasing my first single "Everything" in 2021 and using Web3 to make it available. Be a favorite.

Music recording industry today

Artists only account for 12% of the US $ 40 billion in music industry revenue.

Source:  https://audius.org/

In the last five years, many blockchain startups have turned to web3 to disrupt the highly centralized music industry. However, deployment remains a huge challenge in terms of common users. Artists are passionate about non-middlemen, no middleman makes a difference, but high fuel costs, dim UI / UX, and low user conversion rates are all obstacles that keep creators from participating. Content creators always want to pave the way for mass adoption, much like content encourages users to try new platforms. As consumers are increasingly attracted to digital collectibles and high quality content is increasingly penetrating the NFT platform, I believe that NFT can be the fastest entry tool for fans and artists to join the web3 ecosystem.

Audius founder and CEO Roneil Rumburg is yet another tool for commenting artists. "Compared to before, the web3 builder stack has plenty of tools to allow people to participate in their community. The existing scripts cover everything from NFTs to sharing content on Audius, social tokens, etc."

Why NFT?

Buying pegged content adds to the ownership nature of digital assets, making NFTs the perfect tool for bringing music into the collectable product field. In recent months, we have seen a substantial increase in NFT sales, which has accelerated developers' adoption of web3 as a new way to profit.

Source:  https://cryptoart.io/data

Before we dive into the details, let's quickly explain the value of a song and why a song had to evolve from its original sound form to an independent asset class.

Take an example from the world of traditional art: a painter may spend months, sometimes years, on a painting until he finds his ultimate goal. With a simple Google search, you can easily see the most popular paintings, but their ownership is coveted and limited to those who can afford these rare and beautiful works (such as local tyrants). However much a work of art is imitated, these collectors are proud to own it.

Likewise, people put a lot of creative effort into composing songs, but the large-scale digital distribution makes it nearly impossible for people to get real value from listening to music. A song may have a huge impact on a person's life, which is not reflected in the $ 0.003 traffic cost.

I envision a future limited edition NFT song or album following a similar structure to the art of photography and tablet painting: collectors have digitally signed copies because the collections contain a deeper personal connection to the song.

The final evolution of the music collection will take the form of partial ownership, and token holders will participate and receive royalties from the music.

Digital Music Collection

To bring songs into the realm of digital assets, musicians can take a variety of approaches. The first strategy lies in the production of audio / visual content, where digital art and music complement each other as a visual NFT. We've seen many musicians collaborating with well-known animators to create such assets. I'm personally collaborating with my art director Slime Sunday to create an unreleased audio visual linkage piece under the new pseudonym SSX3LAU. We also saw amazing work from musicians like RAC, Boys Noize, and Deadmau5.

The next step is to focus more on songs, the artist can build a new collection of records or popular existing records. On January 22nd, I will release my first single "Everything" this year. This is my first personal experiment at the NFT for a specific song.

Apart from that, the artist will also release an NFT, which will represent exclusive unreleased songs that will never be available on traditional streaming platforms. Collectors can then choose to share the song if they wish, while the audio is reserved for those who participated in the original sale.

The music collection will have additional functions that can unlock special privileges for collectors, including access to unreleased music, backstage tickets, and eventually retroactive royalties. These characteristics will ensure the long-term value of a music NFT and could influence the formation of a highly liquid secondary market for digital music assets.

Digital music assets

As more and more artists begin to explore the intersection of web3 and exclusive content, we will see a revolution in music copyright.

For independent artists and musicians with their own copyrights, royalties on streaming services have increased substantially in the last five years.

While there is still room for improvement, a sustainable cash flow is worth spending with tokens, which can effectively secure the track and allocate royalties effectively.

Imagine that the NFT represents 100% of the rights to a song or album. Artists can issue DAO tokens, share ownership of songs or albums, while maintaining ownership of 51% of the total supply.

This concept may still be utopian, but a simple UI / UX allows anyone to invest in music assets without the need for complex basic technology. As artists work increasingly to create song tokens, distribution royalties may take many forms in the future.

Any digital asset purchased with the expectation of generating royalties has clear regulatory implications and may require KYC, certification and transfer restrictions.

However, we are not far from a world where fans and investors can participate in a song.

Evidence of memory

The long-term use of the collection layer will also completely transform today's world of live music to bridge the gap between artists and fans. Imagine an artist's appearance at the Coachella festival, and a new song debut may not be released until a few months later. Fans can receive a commemorative card by scanning the QR code displayed on the stage during the performance, so they can preview the song, and also get an exclusive commemorative card of the great show moments.

When artists can combine NFTs with real-world products and experiences (from merchandise to tokens that give fans the opportunity to meet and greet fans), there is limitless potential. In the near future, many artists will issue tokens that can be collected in various forms and interact seamlessly with the real world. Of course, both artists and fans need tools to unravel the mysteries of this process, so distribution, collection and execution is as easy as shifting stories on Instagram.

postscript

On January 22, I will be releasing my first NFT song, which makes me excited. I hope this will be the first step in my acting career.

Although the road ahead is bumpy, I would love to cultivate the fertile land with your support, they helped me achieve what I am today.

In fact, many radical innovations start from the state of the game. I think there will soon be a turning point, when the NFT will turn from speculative play to become an important part of culture. Fred Ehrsam, founder of Coinbase

"To the unintentional observer, the current prospects for NFT development may not be clear. But beneath this surface lies a powerful primitive energy that has the opportunity to redefine digital media ownership and lay the foundation for next-generation applications. - Fred

Combining the two, we have a new vision and goal to enable artists to develop sustainably in the digital age.

Let's go!