Musicians Are Selling Their Music As NFTs: Is This A Good Idea?
The COVID-19 pandemic has done two things: it has made most musicians poorer (with some exceptions) because there was no touring and more and more streaming with no buying of physical albums since all the record stores were closed, and it has increased our virtual life. Think about all the time you have spent online in 2020! And this habit is here to stay pandemic or no pandemic.
That’s why NFTs are all the craze lately, as they could compensate for musicians’ current lack of revenues and satisfy people’s online obsession. An NFT is a non-fungible token or a unique digital asset (digital good) whose ownership is tracked on a blockchain, such as Ethereum (a community-run technology powering the cryptocurrency). I understand very little about cryptocurrency but suddenly NFTs are mentioned everywhere.
NFTs exist in the virtual world, are bought with virtual money, and each NFT is one of a kind. It is attractive for artists because they don’t have to create their own marketplace, they can instantly create items and trade them. For example, Linkin Park’s Mike Shinoda sold a digital piece of art for $30,000 last month and he explained the following on Twitter:
‘It works like an auction; the value is determined by the bidders. In the end, one person gets the NFT. Think of it like owning a ‘1 of a kind’ item in a game, or like “owning” an Instagram post. It’s a weird thing to own, yes, but here’s the crazy thing. Even if I upload the full version of the contained song to DSPs worldwide (which I can still do), I would never get even close to $10k, after fees by DSPs, label, marketing, etc. And a reminder: the NFT isn’t the song – it’s an NFT containing the song. You can even rip the audio and video. And if the contained song becomes more popular, then arguably the NFT becomes more valuable. Lastly, regarding the game item or IG post comparison: it doesn’t matter if you think a current bidding price is too high for a digital collectible. It matters that one person thinks the price is worth it. This should be very interesting for people who make unconventional art, or people who have been told their art isn’t art at all. Maybe it is. The community will decide.’
The item sold by Mike Shinoda (it benefitted a charity) is now owned by someone, and this can look ridiculous because anyone can listen and watch it for free on the internet. However, the real item is tokenized and written on a blockchain as an original as Ethereum tracks the ownership of tokens.
Nothing can prevent you from copying it, the same way you can take a photo of a painting in a museum, but you do not own the original. To me, it’s still difficult to comprehend the whole thing, because this is not a physical object and I am still living very much in the real world. I am not a gamer, I am not building a virtual world or buying cryptocurrency but plenty of people do. Why are people buying stuff like this? The same way that people, once submerged inside the virtual world of a game, buy virtual items or even virtual real estate and virtual art galleries!
A few days ago, Kings of Leon were in the news for offering their latest album ‘When You See Yourself’ on NFTs … There were different types of NFTs, with some more or less traditional aspect: one (sold for $50) was a sort of deluxe version of the new album (a digital download of the music, a vinyl, and other digital goods) while six other ones, offering a lifetime front-row ticket to the band’s shows, were sold at auction. One of these golden tickets was sold for $160,000 and came with a tokenized album, animated GIFs, and artwork.
Grimes has also used the new technology to sell a collection of digital artworks for almost $6M! Her WarNymph Collection Vol 1 was sold at auction but according to The Guardian, two short video pieces called Earth and Mars were made available at a fixed price of $7,500 and each sold about 300 copies in the 48 hours they were on sale. Other pieces, including a video piece called Death of the Old, were sold to the highest bidder, for about $400,000. But what do you do with a video by Grimes?
The irony of this process is that every NFT transaction uses an extraordinary amount of electricity as an Ethereum transaction’s footprint is 48.14 kWh, the equivalent to the power consumption of an average U.S. household over 1.63 days. If you want to understand why this requires so much energy, you can try to read this. Thus, ‘the sale of 303 editions of Grimes’s Earth used the same electrical power as the average EU resident would in 33 years and produced 70 tones of CO2 emissions.’ It seems outrageous, musicians are selling their music as NFTs, but you have to wonder whether this is really a good idea.