NFTs and the New Wave of Music Collectables

With music streaming services paying little and physical music sales in decline, earning as a musician has become harder. Yet the blockchain and non-fungible tokens provide a way to revolutionise the sector and put the power back in artists’ hands.

A non-fungible token (NFT) can be a hard concept for some people to wrap their heads around. It is a code created on the blockchain, which gives ownership to a buyer for a digital item. Mainly, this has taken the form of artwork. However, there have been other collectables and even music created in NFT form. After a brief flurry of popularity in the early 2020s, NFTs have vanished into cult status. Yet they offer a unique opportunity for musicians.

How Do People Buy NFT Items?

Mainly, NFT items are bought with cryptocurrency such as Bitcoin. The recent BTC price INR ratio has seen the currency reach a high of 10,815,205 in August. Since then, it has dipped as low as 9,477,249 but started to climb back up. At the moment, Indian economics plays a very small role in the price of Bitcoin, with the US and European economies having the biggest impact.

For Indian investors, a unique opportunity arises. The price of Bitcoin and cryptocurrency still generally follows US economic sentiment, with people backing off from riskier assets in times of economic turmoil. Yet those in India can use this as a chance to buy Bitcoin and convert it into collectable NFT items when the Rupee is strong. It’s a revolutionary development that laypeople struggle to wrap their heads around. As Yi He, co-founder of crypto exchange Binance, puts it, “Crypto isn’t just the future of finance – it’s already reshaping the system, one day at a time.”

NFTs are generally bought on marketplaces, like eBay. People can place a bid or make an outright offer for the item. In India, there are a few sites that have Indian NFT artists, but there are also global platforms like Opensea and Rarible where you can purchase them.

Which Indian Artists Have Used NFTs?

In 2021, Kaber Vasuki converted an old demo recording of a composition into an NFT. It was placed online for 50ETH, which at the time equated to about Rs 1.5 crore. Since then, several cutting-edge Indian artists have used NFTs to get their work out into the world.

In India, those using NFTs have spanned genres. The Hindi rock band Euphoria have released whole albums as NFTs. Rappers like DIVINE have created digital items, and electronic producers like Ritviz and Nucleya released NFT collectables to mark the launch of an EP. Even festivals have gotten in on the act. Asia’s largest electronic dance festival, Sunburn, created one-off items based on its logo and stage backdrops for fans.

How Have NFTs Been Used in the Music Industry?

One of the most high-profile cases of NFTs in music was with the Western indie rock band Kings of Leon. They released their album “When You See Yourself” not only in physical formats, but also as an NFT. Buying it in this manner had several advantages. People got exclusive access to a special version of the album, along with perks such as concert tickets and VIP access.

Crucially, when NFTs are resold on secondary markets, the creators still retain a share of this, which they can decide upon. So if Kings of Leon set this at 25%, whenever their albums are resold, they would get 25% of the sale.

The use of NFTs for concert and gig tickets is also something that does not get addressed enough. As they are verifiable on the blockchain, issuing tickets in this way eliminates the possibility of counterfeit tickets being issued. The resale of these can also be overseen by the creator, who can set boundaries, or, as noted above, even take a percentage of any ticket resale.

Untapped Potential

Another great use of NFTs in music is to provide exclusive content. There are many forms this can take. It may be NFT-only tracks or albums with extras not available on physical formats. It could also give access to live renditions, or even videos and interviews not available elsewhere.

Behind the scenes, there are many practical applications for it as well. It can allow people to be paid royalties from the track they have created. Currently, this is a very complex process, especially when trying to claim them from across the globe. Using NFTs and Smart Contracts could provide a way in which this is digitised, creating faster payments.

At the moment, NFTs are underused in the music industry. Part of this may be that the public itself does not know how to approach them. In this instance, it leaves wider adoption and education as something that may need addressing if the sector is to grow further and benefit Indian artists.