NON-FUNGIBLE TOKENS

from MIDEM 2021 NEWS

ARTIFICIAL INTELLIGENCE

Overpriced? Eco-unfriendly? What can NFTs do for music?

Non-fungible tokens (NFTs) are collectible digital items, created and tracked using blockchain technology. In the early part of 2021, this technology made headlines around the world thanks to some stellar sales. Stuart Dredge reports

Raised In Space’s Shara Senderoff

THE MUSICIAN Grimes sold nearly $6m worth of NFTs on Nifty Gateway, one of the main NFT marketplace sites. Meanwhile, visual artist Beeple sold one of his collages as an NFT for $69.4m at auction house Christie’s. No wonder the music industry is interested in the potential to make more NFTs based on artists and music brands. However, the hype in early 2021 quickly sparked a backlash, with criticism of NFTs as being overpriced, as well as of their environmental impact due to the carbon costs involved in ‘minting’ (creating) and tracking them. That has not stopped the experimentation continuing however. In the second half of 2021 alone, producer Timbaland teased new music in a series of NFTs; TikTok has worked with some popular social-media stars on a line of NFTs; charity the Mercury

Joel ‘deadmau5’ Zimmerman

Phoenix Trust launched a range based on Freddie Mercury; the Grammy Awards and Rolling Stone minted their first NFTs; and artist 3lau founded a startup called Royal to enable fans to invest in music through NFTs. Most recently, in October, live music giant Live Nation launched its Live Stubs initiative, giving away NFT versions of paper ticket stubs to people who bought tickets to the US tour of Swedish House Mafia. Live Nation president and CEO Michael Rapino said that the product “brings back the nostalgia of collecting ticket stubs while also giving artists a new tool to deepen that relationship with their fans”, while hinting at the potential for those fans to get other rewards if they hold on to the NFTs. Startups including Fanaply, OneOf, Serenade and MakersPlace — the latter of which has taken investment from major label Sony Music —are forging partnerships with artists and labels to explore what else is possible with these tokens. “Any great revenue stream, the scale of it is dependent on how strategic you are with how you build it and how you commit to it,” says Shara Senderoff, president of investment firm Raised In Space, and panelist on the NFT Revolution seminar co-presented by Midem and IAEL. “A lot of artists just dump in for the gold rush and the cash grab, and if you come out the gate trying to get as much money once, is that the scale you could have if you commit to it strategically over multiple years of time, and you layer on the offering for fans and you continue to unlock opportunity? No. You’re going to limit the overall revenue.” Joel ‘deadmau5’ Zimmerman, one of the artists that has been experimenting with NFTs, is speaking on the same panel about his optimism. “This technology is in its infancy. A lot of people had this kind of misconception, and I did for a while too: They’re selling JPEGs? I don’t get it!” he says. “But once you get past that part of it, which is just the surface level, then you start to delve into how blockchain technology can do so many different things. Right now it’s just this mad scramble with the spotlight on ‘selling a JPEG for a million dollars’ or whatever. I’m really paying attention to what that underlying technology can do for future shows, tangible goods and services and stuff like that.” n