How NFTs can help artists get funding for music projects
Lots of people are talking about NFTs within music. As an artist, have you ever wondered how you could make use of them?
Independent musicians are almost always on the lookout for opportunities to get their music heard and advance their careers. The difficulty usually comes from securing funding for music projects. It may or may not surprise you to learn that NFTs could be the answer.
If you’re not sure what non-fungible tokens (NFTs) are, don’t panic! You don’t need a hugely deep and technical understanding of them to benefit from using them. Today, there are many artists who have unlocked revenue streams and deepened their connection with audiences through NFT projects.
Sounding interesting yet? To learn how you can harness this exciting new technology to fund creative projects, simply keep reading.
What actually are NFTs?
First, let’s define what NFTs are.
NFTs are digital assets that are unique and cannot be replicated. They are created using blockchain technology, making them immutable and one-of-a-kind. NFTs can represent anything that is unique and valuable, such as artwork, collectibles, and even music.
Some high-profile NFT projects and celebrity endorsements have led to NFTs making people a lot of money. Whilst not every NFT is going to be worth thousands of dollars, they can still be lucrative. If you’re an independent musician, there are ways NFTs can lead to funding for music projects and endeavours.
Traditional revenue streams
Before we dive into the accessible ways in which NFTs can generate revenue, let’s look at some of the classics. There is a range of exciting ways musicians can earn money.
Live performance
Independent musicians can earn money by performing at gigs, concerts, festivals, and other live events. They can charge for tickets, merchandise, and sometimes even a percentage of the profits from the venue. This is a great way for musicians to connect with their fans and build a loyal following.
Merchandise & physical sales
Who remembers cassette tapes? No? Alright, well how about CDs? Even vinyl records have made a resurgence in the last decade or so. In fact, vinyl sales beat CD sales for the first time since 1987 just last month.
Music fans buy physical releases for a few reasons. Some prefer the detailed audio, while others enjoy the ritual of gently placing a needle on a record to hear it. These habits mean that artists can still earn money through the physical sales of their music. However, having these records manufactured and distributed isn’t always accessible for newer artists.
Another way for independent musicians to earn money is through merchandise sales. This includes T-shirts, hats, posters, and other items featuring the band’s logo or artwork. You can often find this merch being sold at live shows, or on the artist’s website or Bandcamp.
Digital streaming revenue
These days, digital streaming is how a vast number of people consume music. The rise of platforms like Spotify and Apple Music has meant artists can have people from around the globe easily listen to their music. Any time songs are streamed, royalties are generated for that artist.
Different platforms have slightly different revenue models, and the amount of revenue generated depends on a few factors. But, once an artist has distributed their music to streaming platforms, the revenue can passively trickle in over time.
NFTs as funding for music projects
Now that we’ve gone over the more traditional ways musicians can earn money, it’s time to take a peek at NFTs. As a relatively new technology, it isn’t clear to everyone how they can be leveraged. In the interest of empowering artists to get the most out of their careers, we want to provide some insight.
There is a lot of exciting potentials to unlock here. Since NFTs can be linked to almost any asset, artists can get really creative with how they use them. A music NFT is an NFT that is linked with music in any way. Here are some interesting examples:
Exclusive content
When you buy an album, getting some extra bonuses is always exciting. As a fan, you feel valued and part of an exciting club. Musicians can give away exclusive content, like a new music video or special edition artwork, when a fan buys the NFT version of their album.
Unique experiences
Musicians can offer exclusive experiences such as virtual meet-and-greets, private concerts, or even recording sessions as NFTs. Fans can purchase these NFTs, and the musician can earn revenue while providing unique experiences for their fans.
Limited edition music
When dropping a new single, artists can release a limited edition B-side to accompany this release. By making a limited number of these B-side NFTs available, excitement and anticipation is generated among fans. If sold at auction, the demand and popularity of an artist can drive the price of the NFTs up.
With fewer middlemen involved, artists then get to see a much bigger cut of this revenue.
Fractional royalties NFTs
The problem many artists face with digital streaming royalties is the waiting aspect. In many cases, months have to tick by before a substantial amount of streaming revenue is generated. For artists who need a large injection of revenue immediately, a fraction of their streaming royalties can be shared as NFTs.
By doing this, fans can buy a piece of history, whilst earning a percentage of a song’s streaming royalties alongside the artists. Then, instead of waiting for a track to accrue revenue, artists can enjoy earnings generated from the sale of that royalty percentage. No more waiting around to buy that new synth, or have the old faithful tour van repaired.
Accessing NFT revenue as funding
Once an artist has made money from NFTs, how can they then use it as funding for music projects?
NFTs are bought and sold on the blockchain. This means that artists are able to have full control over what they’re selling and how much for. It also means that any revenue generated goes straight to them, as smart contracts ensure transactions are carried out seamlessly.
Of course, it all depends on the artist’s setup. They may have contracts elsewhere that apportion some NFT revenue to any record labels or publishers involved. However, for independent musicians, any money they make from NFTs can go straight into their own pockets.
As a result, smaller artists have access to new revenue streams. This money earned from NFTs can be used for funding future music projects, like hiring musicians or studio time. Or, it could be used to fund a tour of live performances. It can even just be used for the artist to live off, so they have more time to focus on creating, instead of working elsewhere.
Wrapping up
If you’re an independent artist, hopefully, you’ve now got some ideas about new ways you can secure funding for music projects. NFTs offer diverse and creative opportunities for artists to connect with audiences, whilst boosting earning potential.
You could sell an album as an NFT, create an exclusive token-gated fan club, or give away a cool experience via NFT. There are hundreds of possibilities. These types of NFTs aren’t exclusive to high-profile artists. If you have a community and fanbase around you, you might be surprised by how excited your audience gets about your music NFTs.