NFTs (non-fungible tokens) may currently be the K-Pop of the crypto-economy, but in a recent interview with Reuters, Cryptovoxels founder Ben Nolan said, “I expect that there’ll be a crypto winter in the next couple of months, the whole NFT boom will explode, and then all the value will absolutely collapse.”
If you don’t know what NFTs are, they’re digital assets like photos, videos, and audio, stored on a digital ledger called a blockchain and sold using cryptocurrency, and the music industry has been cashing in on NFT-mania.
In a recent article for Words and Music (SOCAN’s online magazine), writer Howard Druckman notes the recent auction of a video art piece with an accompanying demo by a popular Canadian musician that sold for $490,000 CAD. Druckman also notes how Kings of Leon made more than $2.5 million CAD on NFT merch from their album When You See Yourself.
With such dazzling numbers floating around like sequined lifeboats amid the music industry wreckage caused by COVID-19, others in the music industry are understandably intrigued by all the cha-ching.
- In March 2021, the boutique creative agency Launch announced the auction of the first-ever concert as an NFT.
- Canadian fiddling legend Ashley MacIsaac recently announced interest in exploring an NFT project after the pandemic dried up gigs and forced him to file for bankruptcy.
- On March 30th, 2021, the software company Color Star Technology announced it would be developing a business for the production, release, and promotion of NFTs through its subsidiary, Color China Entertainment, which has produced concerts for artists like Mariah Carey and Linkin Park.
As much as the future appears non-fungible, Druckman advises musicians in his SOCAN article, “According to the eternal laws of supply and demand, in order to drive up the price of the NFTs via auction, or set a high initial price for them, the demand already has to be there. So, if a musician draws hundreds of fans rather than hundreds of thousands, or casual listeners rather than hardcore fanatics, they might not make more money from NFTs than from crowd funding or Patreon offers.”
Druckman’s cautionary statement echoes the same advice given to musicians in Royal City Studios’ March 26th, 2021 issue of RCS Music News Weekly:
“With some people now paying millions for NFTs, the cash-for-pixels frontier certainly has a glittering Gold Rush appeal to which some journalists attach dollar signs like bedazzlers cranked on red Bull. Yet behind the hype, the NFT marketplace operates the same as any marketplace.
Demand dictates price and sales, meaning for every Beeple out there earning large crypto-dollars, countless other people are making pixel-pennies, even though their work is awesome.
So, if you’re going to dive into the non-fungible pool, you first may wish to spend time marketing your music in more traditional ways and building up your fan base before considering NFT sales. That way, if you do head into non-fungible territory, the trip may be worth your time and effort.”