Today, Non-Fungible Tokens (NFTs) have brought the sexy back to the music industry and will break through with massive adoption rates from musicians and fans putting pressure on labels to adopt the technology. Artists like 3LAU, Tory Lanz and Sync Tone* are already leading the charge!
Back in 2000, while most people were worried about computer Y2K deficiencies disrupting their business, "NSync" was blaring on the radio worldwide. NSync's album, "No Strings Attached" sold 2.4 million copies in its first week of release and almost 10 million units by the end of the year, the same year compact discs (CDs) were starting to get phased out for Napster-styled streaming downloads.
According to Rolling Stone Magazine, for the ENTIRE year of 2020, Taylor Swift's "Folklore" album sold 2.3 million copies. Yes, you read that correctly, NSync sold more albums in 1 week in 2000 than Ms. Swift did in the entire year of 2020. Music sales have been less profitable for performers because of low-paying streaming rates, which benefit the streaming companies and record labels.
NFTs are about to change that in favor of the artists and the whole music industry will benefit.
According to a recent Wells Fargo Global Investment Institute report as reported by Market Watch, "Cryptocurrencies are near a phase of hyper adoption, similar to what the internet experienced in the mid-to late 1990s."
While the rise of the internet can be linked to the growth of personal home computers in the early 1980s, by 1995 only 14% of U.S. adults had internet access, according to Pew Research. The rate rose significantly to 46% in 2000.
"Like the internet in the 90s, crypto "could soon hit a hyper-infliction point”, Wells Fargo noted. About 13% of Americans bought or traded cryptocurrencies in 2021, similar to the internet’s adoption rate in 1995."
NFTs are all the rage today, with vast amounts of money being spent on what is mostly 2D and 3D digital art projects. Recently a picture of a garbage can uploaded to an NFT auction platform sold for $250,000!
It's not hard to see why NFT critics believe the technology is already in a bubble phase and about to come crashing down, but instead, if the report is accurate, the NFT vs. Internet adoption is just getting started, closer to 1995 than the 2000 web investment frenzy and crash.
As NFTs begin to innovate with specific industry utilities, the wide-scale adoption will be almost unnoticeable, such as web browsers on the internet or smart watches for our cell phones. And this author believes the adoption of NFTs by the Music Industry will be the breakthrough utility that begins to see massive adoption rates of the technology by the general non-technical population.
Why? NFT's have proven to be an extremely democratizing way to own collectibles. Describing what an NFT is, also describes why it is so valuable as a collectible.
According to the BBC News: NFTs are "one-of-a-kind" assets in the digital world that can be bought and sold like any other piece of property."
As with crypto-currency, a record of who owns what is stored on a shared ledger known as the blockchain. The records cannot be forged because the ledger is maintained by thousands of computers around the world. NFTs can also contain smart contracts that may give the artist, for example, a cut of any future sale of the token. Therefore, an NFT is a unique asset.
NFT record releases are making an immediate impact on artists' profitability and will gain traction immediately. For instance, a musician named 3LAU sold his entire album as 33 NFT's for a little more than $11.6 Million! Rapper Tory Lanez sold 1 million NFT copies of his album in under 1 hour! Dance music artist Sync Tone, who has the first NFT avatar to chart, is releasing 1 Million copies of 6 track EP "Thank God It's Friyay!", along with 10,000 unique and rare avatars, including the 6-track EP called the "Disco" series, on Open Sea in February.
That means the potential for initial music sales in the millions of units per artist is back. NFT albums will allow album sales units instead of just streams.
If the record labels can stay out of their own way, they will enjoy an incredible profit center that the artists will share in too. Fans will enjoy better production and more frequent releases to connect better with the artists.
* The author is Sync Tone.
