Will NFTs Change The Music Industry Forever?
NFTs (or “non-fungible tokens”) are digital collectibles that can be traded, bought, sold, and owned using cryptocurrencies such as Ether. Unlike ERC-721 tokens used on platforms such as OpenSea, which allow one token to represent multiple items, a single NFT represents only one item. This makes it easy to track the ownership history of any given asset, regardless of how many copies it has been duplicated into. And since NFTs hold real economic value, they give players a much stronger reason to protect them and keep them safe than other types of game assets.
NFTs have played a major role, especially in the music industry. Some of its positive impacts on the industry are listed below.
Musicians Get Fairly Compensated for Their Work
For decades, musicians have received much less compensation for their work in the entertainment industry. Most artists had had no way to monetize their creations until recently when some companies started offering tools and platforms for artists to sell content online. Thanks to platforms like YouTube, Spotify, SoundCloud, and others, artists now have more ways to connect with potential listeners. But there is still one big issue: these services operate under copyright law, which means that most of the revenue generated goes to those who produced the materials.
With NFTs, however, artists would receive 75% of all revenues generated from selling their NFTs instead of just 10%, according to a report by the Future of Music Coalition. The proceeds would also go towards helping create better content for the community rather than enriching intermediaries.
Artists Gain Control Over Content Distribution
In traditional channels, artists must rely on intermediaries like labels, distributors, etc., to get their songs out to the public. Today’s largest record labels were once small independent ones trying to promote their artists’ works. By connecting directly with their consumers through blockchain technology, the artist can distribute their creations themselves and decide whom to release them.
Consumers Can Pay Artists Immediately Via Smart Contracts
In conventional channels, artists need to wait years before seeing money from sales of their albums. However, with smart contracts, consumers could pay for an album immediately after buying it, giving fans more options about where their hard-earned cash goes. It is similar to how Ethereum provides its users with the ability to send and receive ether immediately by paying fees in fiat currency.
What is an NFT album?
An NFT album is a digital version of a vinyl record. Using the Ethereum blockchain, anyone can design, build, trade, and exchange their unique assets representing anything that can be represented digitally. So far, artists or bands have experimented with NFTs to sell concert tickets, merch, and even artwork.
Bottom Line
As the internet becomes increasingly centralized over time, decentralized ecosystems will rise around various resources to provide better solutions to user needs. The music industry is undergoing significant transformation due to growing consumer demand for high-quality content and higher income opportunities for talented creators. NFTs provide a secure way of creating an ecosystem within the existing copyright system while supporting fair distribution models for original content.
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