The power of NFTs in music

It’s funny how the world seems to discover something that’s been around for a while all at the same time. It can be well known in certain circles for years and years, only to burst out into the mainstream all at once.

Such has been the emergence of NFTs. Spurred on by popular rock band the Kings of Leon releasing their eighth studio album ‘When You See Yourself’ as a NFT. Well, partly. The album is available through conventual means as well, but fans that want to go the extra mile can get some value-add by buying the NFT, which will give fans access to some additional album art and front-of-line possibilities for things like tickets down the line.

It was a brilliant piece of business by the band, who may have been losing some cool in an industry that relies on pop culture relevance. A lot of people that like to be on the leading edge of things will probably look to check this “new” technology out, which should drive more interest in them and, even if not, it will make them more money on album sales.

That’s key in an industry that has particularly struggled during the pandemic. With album sales decreasing in numbers over the last 20 years, bands have made most of their money off of touring, which, of course, couldn’t happen. Even when it does start back up there is fear that it will be prohibitively expensive due to health and safety requirements that come out of the pandemic.

So, bands need to figure it out. The NFT model could very well be a way that they do this and the excitement that you are seeing in the reporting of this is legit. It’s exciting, but I probably don’t need to tell a lot of you reading this that.

That said, a lot of the coverage of this is kind of missing the point of where the real opportunity will be for bands. Sure, they can create digital merchandise like Kings of Leon did, but let’s be honest here. The novelty of owning digital artwork that you can just right-click onto your laptop is going to wear off pretty quick. Only the biggest bands in the world can realistically create content that fans are going to want. The promises of democratizing the industry for smaller, indie bands is mostly just empty talk.

But, there is an exciting adaptation to the tech that those indie bands should be absolutely looking at and that isn’t getting talked about enough. Ticketing. It’s staring-in-you-face obvious.

As stated above, the biggest way that bands make money now isn’t through the selling of music, but rather the performing of it.  That’s not going to change post pandemic.

So, controlling how you sell access to your concerts is the single most important thing that a band can do to ensure their revenue streams stay consistent. Right now, they have to rely on third-party companies like Ticketmaster to distribute tickets. That takes a cut out of their profits right away. Getting rid of that middle man puts more money into their pockets.

But, that’s only half the battle. Much of the money that gets spent on live music never even finds its way to either the artist or the third party vendors. Rather, it’s found in the black market through ticket scalping (or secondary market selling, as they try to politely describe it to legitimize the practice).

By selling tokens that grant access to a show, rather than tickets, the band is taking back full control of the entire selling ecosystem. The blockchain allows provenance to be established which allows the bands to control the access and, most importantly, profit directly from the re-sell of the token. That happens a little bit now through third party vendor’s setting up re-sell options, but not anywhere to the same extent.

That’s a legit gamechanger in the space and far more important than the higher profile NFT stunts like the Kings of Leon album.

As a music fan anything that allows bands to be in greater control of their finances is exciting to me. This is exciting.