Real-World Impact of NFTs? Musicians Find Lucrative Alternative to Streaming
It seems that NFTs might have a viable use-case when it comes to musical artists.
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Musicians are paid by streaming platforms on a per-stream basis, and the income can generally be very low. Spotify, for instance, pays artists as little as 0.0033 dollars (23 paise) per stream, according to Business Insider.
That translates to one dollar (Rs 76) for every 250 streams.
While bigger artists can earn through merchandising, endorsements, and features, smaller artists – even relatively successful ones – struggle to make any profits.
Non-fungible tokens (NFTs) might change that.
For all the negative press they have received for rampant plagiarism and having a fanbase which doesn't quite understand copyright, it seems that NFTs might have a viable use-case when it comes to musical artists.
A Viable Use for NFTs
NFTs are unique digital receipts which use the blockchain to prove ownership of an underlying digital file.
Some musicians have begun selling their songs as NFTs, making significantly larger profits than what streaming services offer.
Musicians made $83 million in primary sales through NFTs in 2021 and independent artists accounted for 70 percent of that revenue, according to digital music research organization Water & Music.
Singer-songwriter Iman Europe told Bloomberg she made 22.2 Ether (roughly Rs 45,78,690), by selling just five singles and a music video as NFTs since November 2021.
“I had one person buy my song for the amount it would have taken a million streams to get,” she said. Despite having four million listens across platforms she was making only about $300 a month from streaming.
While the primary market refers to the initial sale of an artwork, the secondary market refers to any time the artwork is resold, from owner to owner.
While traditionally secondary markets have been difficult to track, NFTs make it possible for artists to take a cut every time their work is resold on the market.
Such a feature lets artists reap a consistent stream of revenue from just one piece of art.
Nearly 40 percent of Iman's NFT revenue, for example, was reportedly made on secondary sales. Through her NFT contract, she automatically received a 10 percent cut whenever her music was resold.
Plagiarism and Copyright Issues
NFT marketplaces, however, have a plagiarism problem.
Since there is little to no regulation in crypto-based marketplaces and it's relatively easy to mint NFTs, you don't have to prove that you're minting NFTs of your original creations.
Writing data onto the blockchain requires a fee (called gas) for the computation and storage. However, platforms like Opensea offer 'lazy minting' which uses a portion of the selling price as gas, effectively allowing users to mint for free.
With this, it's very easy to copy someone's work, mint an NFT, and reap the often considerable monetary benefits.
Due to the sheer volume of digital art (jpegs and pngs) produced, plagiarised NFTs often go undetected. This problem could also affect music sold as NFTs since it's not difficult to duplicate and alter music files.
If someone else minted NFTs of your music and began selling them on a marketplace, all you can really do is petition the platform and ask them for help. The platform may then delist the sale or block the offending accounts.
Under copyright law, it's technically illegal to mint someone else's work without due permission. However, since blockchain-based transactions offer anonymity and the volume of transactions is high, the law is difficult to enforce.
(With inputs from Bloomberg)
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