Can Club and Touring Musicians Build a Base Income With NFT Releases?

Could be… under the right circumstances and with the right contract

The trajectory of Non Fungible Tokens (NFTs) has branched in many directions and is currently blossoming profusely, driving new ventures, new collaborations and a vibrant new market. It is also generating a lot of chatter, both positive and negative in the process. This essay looks at the possibility that NFTs could be a new song release and revenue generation process that may be worth exploring for aspiring and mid-level musicians, those not yet capable of filling stadiums and being influencers in their space.

First of all, a disclaimer: I’m not an expert, just now getting ready to mint and release my first NFT, so I’m literally thinking out loud here — exploring possibilities after doing a shit-ton of research on the subject and brainstorming with colleagues.

I can see NFT music releases evolving into an interesting alternative to the current model of music/song distribution, which very few musicians are happy with tbh. NFTs can be resold and copied under certain circumstances. And the way most contracts are being written today, the original artist gets a royalty each time their NFT is sold, traded or copied. I can see that framework accommodating mid-level musicians quite nicely, providing at least living wages on a monthly basis with regular song releases.

One might only need to sell a couple thousand original copies of a song to make rent & groceries. Then each time a copy is made or the NFT is resold or traded, modest royalties would be paid to the creator. See how that works? If a musician released one song a month for a year, it could build into a small but nice revenue stream given the initial sales and subsequent royalties. Every time a new song is released, a new potential royalty stream is created. Some songs may resonate with fans and be widely copied, traded and sold; others may not — not unlike the current model in that regard. Musicians can hedge this risk by releasing two or three songs a month, hoping that one will generate the kind of numbers necessary to cover rent, groceries and a car payment.

The thing about NFTs is that they are digital files and can easily be enhanced with added value for the purchaser. Limited edition images can be tucked into an NFT file, as can concert schedules, back-stage passes and other inducements and rewards.

Bottom line, as with most things remotely legal, is the nature and strength of the contact between musician and song NFT purchaser. Contracts may be creative, specifying the number of shares or copies authorized, setting royalties, and sometimes delivering additional value to purchasers down-the-line through advance ticket purchases and the like.

In a hypothetical case, a regular club or bar musician could encourage audiences to share their emails via text or website; make a list, and then offer NFT-based songs to even a modest fan base. Or simply let audience members know songs are available that way and point them to a URL. It’s a creative way to leverage a small following, and it encourages the resale, copying and ‘trading’ of music — with the creator musician being paid a tiny royalty with each transaction. There’s also another thing, that being the bandwagon mentality around NFTs at the moment and the momentum of the growing marketplace. That’s a bonus.

Now there are some costs involved in minting an NFT. It costs to mint, to list and to sell. And then there are ‘gas fees,’ the platform/market independent fees paid to blockchain miners/verifiers to propagate, verify and guarantee the smart contracts that make this all work; ensure exclusivity and regulate sale, trading and royalties.

Gas fees fluctuate pretty dramatically in real time and can be excessive. Where once it took only about $30 to mint an NFT, it can now cost well over $100. Minting a batch can become prohibitive very quickly at these rates. That’s where platforms/markets like ‘Mintable’ come into play. Mintable is the only platform that I know of that offers a gas-fee free option. It is naturally more restrictive, but could work for musicians who have loyal fans who don’t mind being pointed to a specific intermediary.

Doing business in this manner will put musicians directly into the cryptocurrency world, and that has it’s pros and cons. It gives fans another way to reimburse musicians for their creative work and puts artists directly into the cryptocurrency fast lane, a very hip place to be at the moment according to some. It does take a digital wallet to get started, and some ETH (Etherium) — the cryptocurrency that is the basis of blockchain. So there’s an initial investment to play, a few hundred bucks should cover all the costs to get going.

Then, one needs to pick a marketplace, a platform that will become the musician’s partner in minting, listing and selling their NFT-based music. OpenSea is the biggest and oldest marketplace, but many complain it is beset by scams. Rarible is an attractive option, but it is Mintable that has gotten my attention. Not only its ‘gas-free’ fee structure, but also its governance, backers (a Mark Cuban company), and its model. For musicians especially, Mintable deserves a good, long look.

So like any new distribution channel, musicians are well advised to do their due diligence, vet potential partners, and make sure the financial calculus is accurate and delivers revenue after expenses. But there is no denying, this is a new opportunity for distribution, fan engagement and management, and revenue streams. It is a new, alternative model, very democratic and decentralized; to a moribund centralized traditional system that most musicians believe is broken in fundamental ways.

#NFT #Crypto #Tokens #Web3