The music industry is widely known for its centralized structure, where major record labels maintain control over almost every aspect of an artist’s career, including song selection and royalty distribution. While streaming platforms like SoundCloud and Spotify have played a role in democratizing the industry and making it easier for artists to reach a wider audience, it remains a challenging task to build a dedicated fanbase and generate enough revenue to sustain a career.
Enter music NFTs. Within the blockchain space, nonfungible tokens offer a unique opportunity for fans to directly support their favorite artists, for musicians to cultivate stronger communities with their listeners, and for content creators to establish more substantial and sustainable income streams.
To gain a deeper understanding of this topic, Cointelegraph’s informative podcast, The Agenda, recently featured Adam Levy, the host of Mint, a podcast that delves into the Web3 creator economy, and Jay Kila, a crypto-native rapper from Mumbai who founded OTP India, a platform that combines digital collectibles and fan engagement for Indian hip hop artists.
So, what exactly are music NFTs? According to Levy, there are two main categories. The first is ownership-based NFTs, which are tied to intellectual property rights and royalties. When purchasing such an NFT, the buyer becomes entitled to a share of the revenue generated from streaming platforms like Spotify and Apple Music.
The second category is patronage-based NFTs, which do not grant ownership rights but are acquired as a means to support an artist. These NFTs derive their value from appreciating secondary sales.
Jay Kila became interested in music NFTs in early 2020 when most of his performance opportunities vanished due to the COVID-19 pandemic. He found it inspiring that this emerging technology offered artists an alternative way to earn a living outside of the traditional model. This led him to establish OTP India with a friend.
Kila emphasized the appeal of selling an NFT, noting that even a $300 sale can generate more income than years of streaming on platforms like Spotify, especially for artists who are not receiving millions of streams. While Spotify claims to have paid out $7 billion in royalties in 2021, the majority of this money goes to record labels and publishers, who take significant percentages for themselves before distributing the remainder to the artists. Additionally, Spotify reportedly pays only $0.003 to $0.005 per stream, with major record labels securing higher payouts than independent artists.
Both Levy and Jay Kila agree on the power of music NFTs to foster a stronger connection between creators and their fans. The Mint podcast, for example, issues free NFTs to reward its loyal listeners, attract new subscribers, and expand its audience.
Jay Kila’s OTP project aims to build a Web3 community for the Indian hip hop scene through collectible digital trading cards, with affordability being a key factor. Each artist card is priced at $27 to ensure accessibility for the average person. According to Kila, the primary goal is to establish a bond between fans and artists and foster a thriving community.
To delve further into the world of music NFTs and explore how Levy and Jay Kila leverage blockchain technology to build communities and monetize content, listeners can tune into the full episode of The Agenda on Cointelegraph’s new podcasts page, Spotify, Apple Podcasts, Google Podcasts, or TuneIn.
The Agenda is an engaging podcast from Cointelegraph that delves into the potential of crypto, blockchain, and Web3, and how everyday individuals can enhance their lives through technology. Don’t forget to explore Cointelegraph’s other new shows by visiting the new Cointelegraph Podcast section.
It is important to note that the views, thoughts, and opinions expressed in this article and podcast episode belong solely to the participants and do not necessarily reflect the views and opinions of Cointelegraph.