Exploring future revenue streams for composers and sound designers
NFTs, tokenization, web 3.0 and more.
The music industry has transformed in under a generation. The methods of earning money have especially changed, which has prompted me to ask the question: how can the modern composer and sound designer earn money in the digital age? In this post I explore emerging technologies like NFT’s, tokens and web 3.0 and contemplate ways that sound artists like myself might be able to utilise them.
What are NFT’s?
The term non-fungible token (NFT) has recently become a buzzword, and for good reason, as some early adopters have made huge amounts of money by investing in these assets. The term ‘non-fungible’ means non-transferable, and ‘token’ in this context is the representation of an asset. So in simple terms, NFT’s are completely unique entities where the value can’t be replaced by something else (in the way a ten pound note can be replaced by ten pound coins). NFT’s are unique pieces of code attached to images, and so a common example of how an NFT might be used is as an original piece of art.
A famous name in the NFT game is the Crypto Punks art collection, limited to 10,000 assets in total. These digital art pieces caused a frantic chase in ownership and many were resold at very high prices, over seven million dollars. But this is still small compared to the highest valued NFT which sold, at the time of the writing, for $69 Million. The piece is named Everydays: The First 5000 Days by the artist Mike ‘Beeple’ Winkelmann (Georgiev, 2021).
Of course, not all NFT’s are worth millions. The market is already becoming saturated, which lowers the value of NFT’s as one of the defining characteristics of high value NFT’s is their scarcity. As the scene progresses there needs to be other reasons why an item would be valued highly, reasons beyond scarcity because not all NFT’s can be the first ever NFT’s. NFT creators are becoming increasingly inventive to create value beyond the visual aspect of NFT’s, coding in additional capabilities such as storing various types of information e.g. videos, audio. It is this introduction of audio information into NFT’s that opens up a world of possibilities for sound artists like myself.
How composers can benefit from the NFT Marketplace
The music NFT marketplace is the space where artists can create their own NFT’s, carrying ‘one-off’ renditions of their music, the original of which can only ever be owned by one person. Imagine a super fan buying an NFT by their favourite artist. They would be the only fan with the original of this work.
‘A person who buys an NFT holds exclusive ownership over it, making them incredibly intimate and exclusive for buyers and lucrative for artists’ (Griffith, 2021).
With record sales in decline, largely due to mass adoption of streaming services, the average musician earns little to nothing for their creativity. NFT’s could change this, and this is why many artists are getting excited about this new technology. Getting involved in zeitgeist technology also gives artists kudos and creates a media buzz around them. In July 2021 Matt Belamy from MUSE auctioned a new ten song album as NFT’s, where three of the tracks were completely unheard and recorded on ‘the same guitar…Jeff Buckley recorded his classic album, Grace’ (Griffith, 2021). Such a scarce piece of culture was destined to have great value. Through NFT’s, artists can have a direct relationship with their fans, bypassing the middle men that traditionally take a chunk of the profits. In addition to earning money from the initial sale of an NFT, artists also receive a commission for every re-sale, indefinitely. This is a radical change in how artists make money and represents an interesting opportunity for technologically-minded composers like myself.
What’s more, you don’t have to be an artist or a band to create an NFT. A sound designer could create NFT’s for their most iconic sound creations e.g. the sound of the Star Wars lightsaber. Unlike artists, sound designers do not receive royalties when their sound is used. Selling their sounds as NFT’s opens up the possibility of generating profit, as well as royalty-like commissions with each re-sale. This potential revenue stream would also encourage sound designers to be more creative, because the more unique and interesting their sound is the more valuable their NFT.
What is Tokenization?
Tokenization is the transformation of information into an asset, a ‘token’ which has a value. An NFT is just one kind of token, there are many other kinds. Tokens can be used as rewards and as currency. Cultural and social forecasters predict that a great many companies and organisations in the future will have their own token, in the same way that many people and businesses today have their own website. Websites were the native asset of web 2.0. Today tokens are the native asset of web 3.0, the next evolution of the internet. Thirty years ago, the idea that everyone would have a web presence would have seemed strange, and yet today many of us have a website or social media page. The same will very likely be true of tokens. Tokens will be essential for any company that wants to connect with the ‘global value transfer protocol’, a network of exchange being built with web 3.0.
How composers can benefit from tokenization
Tokenization has made it possible to earn tokens, which have value, through various activities. In gaming there is now a concept called ‘play to earn’, or ‘GameFi’, where players earn tokens as they play. These tokens can be exchanged for other items which have value, for instance cryptocurrencies, in effect generating income for gamers. This phenomenon is referred to as the financialisation of video gaming, which the creators of the game Axie Infinity believe is ‘part of the ethos of web 3.0…users being rewarded for the value that they bring to applications’ (Whitepaper, 2020).
The idea that you can ‘play to earn’ inspired me to come up with a new idea for the music space. In my work as a private music tutor I use a piano tuition method with my students called Beginner To Composer In 14 Days. It currently exists as a workbook but lends itself to becoming an app, with gamification to make the experience more engaging. If students could earn tokens for learning via the app this would really help incentivise them to learn music composition, and much faster. Music education apps already exist, like Simply Piano, but I am not aware of any that feature this ‘learn to earn’ aspect.
‘Learn to earn’ is a concept I created while writing this blog, and one that I plan to explore properly in 2022, with the view to develop my piano method digitally and implement a system of tokenization similar to Axis Infinity.
Conclusion
NFTs and tokenization look set to become part of our daily experience, for all of us in one form or another. As a composer I will be exploring ways I can use NFT’s, using them to release music like a record label, and to showcase visual art made by co-collaborators on my projects.
REFERENCES:
AIRNFTS.COM. Music NFT Marketplace. [Online] Available at: https://www.airnfts.com/nft/music-nft. [Accessed: 09.12.2021].
GEORGIEV, G. (2021). Record-Breaking: Beeple’s First 5000 Days NFT Sold for $69 Million. [Online] Available at: https://cryptopotato.com/record-breaking-beeples-first-5000-days-nft-sold-for-69-million/. [Accessed: 09.11.2021].
GRIFFITH, I. (2021). Muse’s Matt Bellamy Sells Never Before Heard Music as NFTs. [Online] Available at: https://celebmagazine.com/muse-matt-bellamy-selling-unheard-songs-nfts/. [Accessed: 09.11.2021].
WHITEPAPER.AXIEINFINITY.COM (2020). Technology. [Online] Available at: https://whitepaper.axieinfinity.com/technology. [Accessed: 09.11.2021].
WIKI.RUGDOC.IO (2021). What is GameFi? Play-to-earn and blockchain games explained. [Online] Available at: https://wiki.rugdoc.io/docs/what-is-gamefi-play-to-earn-and-blockchain-games-explained/. [Accessed: 09.12.2021].
