Could NFT’s be the future of increasing wealth in the music industry? But first of all - WTF is an NFT? What do they mean for the future of music (and the environment)? What do you get? Who’s making them? And do you have to sell your soul to own one?
On Friday, Kings of Leon released their new album, titled ‘When You See Yourself’, in the form of a non-fungible token (NFT) - becoming the first major rock band to ever do so. Following after Grimes sold $6 million (around £4.4 million) worth of digital artwork in the format of NFTs last week. Grimes’ highest-selling piece was a one-of-a-kind video called “Death of the Old” that features an alternate dimension with hills of wasteland and flying cherubs, a cross, a sword, and a glowing light that’s set to an original song by Grimes. The winning bidder took it for nearly $389,000 (circa £282,000).
If you’re feeling a bit discombobulated as to what’s happening here - welcome to the party. But fear not - this is a positive thing! After slowly growing in popularity over the past several months, NFTs blew up over the past week - as the hottest new crypto tech trend. A ‘non-fungible token’ allows buyers to purchase ownership of a digital good, usually an image, animation, or video, in the form of a unique digital token.
So WTF are NFTs?
NFT stands for ‘non-fungible token’, a form of cryptocurrency asset. Most cryptocurrencies are fungible (or ‘spendable’) tokens; you can exchange them for other cryptocurrencies or spend them on goods where they’re accepted - just like actual money. NFTs are a form of cryptocurrency that can hold assets such as art, concert tickets and music instead of money. They are expected to increase in value over time but can prove instantly lucrative too such as in Grimes’ instance.
Think of a non-fungible token as the digital gold bar of crypto currency - they’re kept on the ‘blockchain’ (basically a Cloud for financial assets, but it’s a publicly accessible and transparent network - meaning anyone can see the details of any NFT transaction) in your name but you can only sell or trade them as collectibles. Once the sale ends, the NFT versions in circulation then become a tradeable collectible.
Kings of Leon Become the First Band to Release an Album as an NFT
Rock band Kings of Leon will claim a page in the history books now they have become the first music artists in the world to release an album as a form of cryptocurrency. It is understood ‘When You See Yourself’ will be the first of three tokenized releases by Kings of Leon.
How Kings of Leon did their NFT was, they put up their eighth studio album ‘When You See Yourself’ for a very reasonable price of $50 (£35.70), and in the two weeks they’re on sale, you’ll own a token on the blockchain from which you can download the album, exclusive moving artwork and access to limited edition vinyl, VIP experiences, gig tickets, and even pre-show pints with the band! If you manage to grab one of these you’re in luck because after the two weeks, no more will be made and existing tokens can’t be reproduced.
Kings of Leon’s album will be released everywhere albums are released — Spotify, iTunes, Apple Music, Amazon - but the NFT version available on YellowHeart will be the only product with special perks. YellowHeart is minting 18 unique-looking ‘golden tickets’ as part of the Kings of Leon NFT release. Out of the 18, the band will auction six and vault the other twelve. Each ‘golden ticket’ also unlocks an actual concert ticket - marking the first time a music ticket has been officially sold as an NFT. Whoever owns the token is guaranteed four front-row seats to any Kings of Leon concert during each tour for LIFE. The token owner also gets a VIP experience that includes a personal driver, a concierge at the show to take care of their needs, a hangout with the band before the show, and exclusive lounge access. Upon leaving the show, the fan’s car will have four bags filled with every item from the merch booth.
Kings Of Leon’s NFT album is based on the Ethereum blockchain – Ethereum is the second-in-command cryptocurrency after Bitcoin. As the value of Ethereum, and the wider crypto market, rises and falls (and more potential collectors enter the market), the value of that NFT is expected to fluctuate similarly, making your album something akin to a digital stock investment in the future of cryptocurrency. Pretty cool, right?
What are the Benefits of NFT albums?
NFT’s swerve past all of the other pay cheques and goes straight into the artist’s pockets. This is huge. Especially in this current climate where artists are scratching their heads without being able to tour and even produce music due to lockdowns and the fact that Spotify pay you about 1p per 10,0000 views (it’s actually $0.004 per stream - so close enough). NFTs also give the artists a lot more creative control and allow for maximum creativity around the release of content.
Artists have been hit hard financially in a digital age which has seen the devaluation of music. Music has become an accessible free commodity to all in the past decade with streaming being so easily accessible and did I mention - FREE? There seems to be not much value other than sentiment to music nowadays. Vinyl has gone back out of fashion and devalued, no one listens to CD’s, and memorabilia has become more of a distant past time in music’s current world. For the fan - NFTs are bringing back a scarce commodity and bring a value back in actually owning music, with a futuristic twist of it being a digital asset and investment that you will own and be able to trade.
The sentiment behind an NFT is owning a rare piece of artwork which can’t be reproduced beyond initial production - and it becomes a digital, tradable asset. Unlike a piece of rare vinyl, where it is tangible; the NFT is not - but once the art work has been sold - no more will be made and existing tokens can’t be reproduced therefore they work as a digital limited edition collectable item with a somewhat priceless value (dependant on how many were produced). Like a rare vinyl, the piece of art harbours collectability and value - leading to serious collectors potentially being willing to pay a lot of money for it. Essentially it’s an undamageable, unloseable, and intangible rare digital vinyl with awesome perks - explained in its simplest terms when referring to album NFT’s.
Do NFT’s Harm the Environment?
Well they don’t better it - that’s for sure. According to The Guardian, “The field has been criticised for its vast power use, and for the limited utility of the tokens themselves. Just one work of art by Grimes, sold in 303 editions, produced an estimated 70 tonnes of CO2 emissions as it was turned into an NFT. And while the tokens convey “ownership”, they don’t provide significant actual use, providing an explanation for why the Kings of Leon NFT comes with the addition of a decidedly non-digital vinyl copy of the album..” This is something that will have to be worked on if NFT’s are going to be the future of music - but nonetheless it’s a step in the right direction for the currently deflated music industry.
Will NFT Albums be the Future of Music?
If those energy consumption issues can be addressed, there’s a good chance that the answer’s ‘yes’. As a means of giving music value again, they’re extremely attractive to the artist and come with the bonus appeal of aspiration for the fan. And with the rarity and exclusivity factors thrown in, they’re a great way to feel as though your music is actually yours. I really like the idea of a digital tradeable collectable - it can’t get lost and you will forever own it unless you decide to sell or trade it. Essentially - album NFT’s are putting the music industry on the stock market - and I’m all here for it.
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