Music NFTs don’t make bank, but they do build fan communities
Crypto winter is here and NFT prices are falling, but despite all that, the music NFT community is still growing. Here’s what it means for musicians.
of Janelle Borg by AmplifyYou
In 2021, the global music industry was worth $26 billion. Despite this colossal number, artists rarely receive proper credit or compensation for their work.
Blockchain and NFT technology is empowering artists by enabling them to create a music NFT community that allows them to pursue a long-term, fan-driven career. In this article, we will explore the reasons why music NFTs are used to transform audiences into a full-fledged community.
How do music NFTs create a paradigm shift?
Music NFTs allow artists to create collectibles that can be owned and traded by fans. Here are four reasons why music NFTs are a great source of income for artists.
A way to build a fan base
Artists can use NFTs to grow their fan base by connecting with fans, building a community, and creating a fan base. Through their music NFT community, artists can communicate with their fans and get real-time feedback on their work. Other interactions include perks like exclusive merch, meet and greets, fan hangouts, surprise NFT drops, and so on.
An innovative income stream
Music NFTs are the perfect platform for artists to monetize their work. When a fan buys a music NFT, they not only buy the right to listen to a song, but also invest in the artist who receives royalties every time the NFT is sold and resold.
Artists can also sell music NFTs directly to collectors or investors. This is good news, as it gives both sides more control over product sales, curation and revenue.
A way of owning and valuing one’s work
As an artist, you can set the value of the collectible. You decide when to sell it and how much it will cost. If you want to make a limited edition or make other changes to your work, you can do that too.
Also, artists make more money without having to sacrifice ownership or control over their work. They can sell their products at any time, whether they are on tour or not, which gives them more financial stability.
Create scarcity of assets
Artists can use NFTs to create scarcity for their assets. In fact, scarcity is a good thing for artists. When an artist creates and sells a music NFT, a fan or investor knows that only a few editions will be available. Therefore, if they wish, they must act quickly. This drives demand for the asset in question and makes it more valuable.
Image credit: Complex
The sociological definition of community is “a group that follows a social structure in a society (culture, norms, values, status). They may work together to organize social life in a particular place, or they may be bound by a sense of belonging that is sustained across time and space.”
Online communities can indeed fit this definition and have proven to be a game changer for many people. They are supported by the development of technology and enable real-time communication between people who share common interests but live in different parts of the world.
With Web3, community is taken a step further. Through music NFTs, artists have the new potential to create an exclusive music NFT community for their best fans. Through this community, fans and followers transform into a dedicated community that, although built by artists, can transform into its own entity. This is where DAOs come in.
What is a DAO?
DAOs, or Decentralized Autonomous Organizations, are decentralized Internet communities owned by their members. This means that there are no managers or central governing bodies.
Artists can create their own DAOs by creating music NFTs, which can be used as DAO membership tokens. By creating a DAO, they develop a music NFT community that facilitates two-way communication between fans and artists and fans among themselves.
Two-way communication allows DAOs and communities to thrive. Through DAO, artists can raise money, ask fans to give them input on new songs and involve fans in the creative process. In addition, fans can organize their own meetings, start fundraising initiatives, choose community moderators and befriend like-minded people.
A Web3 version of the theory of 1000 true fans
Kevin Kelly’s theory of 1,000 true fans is based on the concept that artists only need 1,000 true fans to sustain a musical career. According to Kelly: “The Takeaway: 1,000 Real Fans is an alternative path to success than stardom. Instead of trying to reach the narrow and unlikely peaks of platinum bestseller hits, blockbusters, and celebrity status, aim for a direct connection with a thousand real fans. On your way, no matter how many fans you actually succeed in gaining, you will not be surrounded by faddish infatuation, but by real and genuine gratitude.”
The web3 version of Kevin Kelly’s theory of 1000 true fans can be reduced to 100 true fans. According to MODA DAO, each of the 100 true fans will become an investor in your music through initiatives such as music NFTs or other micro-investments. Through such protection, artists can create art without having to rely on companies or labels. On the other hand, fans don’t just receive content. Instead, they are compensated for their investment through exclusive collectibles and in some cases through a percentage of royalties.
Concluding notes
Music NFTs are powerful tools that can transform an artist’s career trajectory. They are also a new way for artists to connect with fans.
They can be used to raise capital and build a fan base, monetize their art, own their work and set the value of the collectible, create scarcity for their assets, and share content with other users on the platform. Music NFT communities are undoubtedly still in their infancy. But if used well, they can help an artist achieve true independence.
