In the past few years, people have digitized the creative industry in hopes of keeping up with the high demand for fast, accessible and innovative creations. Facebook's recent announcement of their rebranded company ‘Meta’, exists to bring the metaverse to life and help people connect, find communities and grow businesses. This is a sign of social enterprises expanding social experiences with other people, evidently giving content creators, marketers and creatives the chance to continuously grow.
In connection with the rising phenomena that is revolutionizing finance, particularly around the way the people invest in art, music and sports is no stranger to this growth and trend.
What are NFTs and why are they popular?
Non-fungible tokens (NFTs) are the new frontier of revenue generation, with a great regard to the arts. Non-fungible means there is no equivalent for which the item can be exchanged. When it comes to NFTs, the technology establishes the uniqueness and ownership of a piece of digital art, which is then sold via a platform. As a result, each sale of this art is recorded on blockchain, creating a digital provenance that can not be altered by anyone.
With the industry's previous mistakes regarding digital technology and the evolution of independent artists and the way consumers listen to and purchase music, the industry can not afford to repeat previous mistakes in the fast-changing pace of the sector. In the 2000s when consumers took a shift in the way they record, distribute, store, and play music, it caused a widespread economic change in the music industry. Their resistance to developing the surge in new digital methods to discover, access, listen to, share and purchase music caused a death spiral.
How are they relevant to the music industry?
This year in particular, the rise of NFTs have taken the world of music by storm. By selling tokenized versions of their tracks, digital art, or virtual and real-world merchandise, some of these performers have added millions to their revenues. NFTs and fan tokens have the power to reform the entire music industry with a reformed way of creators engaging with their fans and producing music.
How can creatives benefit from them?
Part of the promise of this new technology is that creatives are now able to connect directly with potential buyers on each platform, thereby liberating artists from third party platforms. Creatives can also now offer their fans unmatched experiences by providing signed digital copies of albums, each one distinct from the other, all represented by a unique token. That same policy can apply to digital one-on-ones and limited entry shows, ensuring fans feel closer to their favorite acts. NFTs can particularly benefit the indie scene by providing unique rewards for using a streaming platform, thereby motivating them to stay loyal.
The unique engagement can translate into crowdfunding opportunities as well. For example, new film projects can entice funding with unique digital collectibles related to characters and other key aspects. Considering each unique item can be tokenized, it is easy to transfer the token to a valuable user, or winner, which leads to the growth of NFTs.
What's in store for the future?
The direction of NFTs in the creative industry is their increased validity within the community for both users and consumers. NFTs having a unique signature and because there's no way to duplicate or scam, the assets will go a long way in providing financial security for fans. For example, fans are much more likely to spend on tickets and collectibles if they know that they won't be scammed. Even physical art can benefit here. Considering anyone can track token transactions, it's possible to check if a piece is real or a counterfeit. For example, artists can simply certify their work via an NFT, which users can then purchase a license to access.
In conclusion, the music industry is willing to branch out and explore the advantages of NFTs. The engagement from consumers and fans can translate to opportunities for creators to fund even their other creative projects. Considering each unique item can be tokenized, it is easy to transfer the token to a valuable user.
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