“It’s going to revolutionise the music industry” – Should artists use NFTs as their record label?
Media marketing expert and serial entrepreneur Gary Vaynerchuk, renowned for his consumer product strategies and vocal opinions on NFTs, has spoken up about how he thinks emerging artists can use non-fungible tokens.
In a video posted to social media, Gary V said: “If an emerging artist came to me […] and said ‘Gary what do I do in NFT land’? I’d say use NFTs to become your label.”
For those still navigating the world of NFTs, here’s an explanation by Bianca O’Neill in her feature for Rolling Stone Australia, ‘Choose Your Master: Could NFTs Change the Face of the Music Industry?’
An NFT is a unique identifying code attached to a digital work such as a piece of art, music, or a video. Think of it like a one-off digital “signature” which cannot be hacked.
That’s because it uses the same blockchain technology as cryptocurrencies like Bitcoin or Ethererum—a database consisting of a system of individual computers working in tandem to decentralise identifying information, ensuring its transaction data is both irreversible and transparent. This allows the work to be authenticated easily, and traded on the open market.
Gary V has advised emerging artists to bypass record labels and enter a direct deal with fans via NFTs.
“Instead of going and making a deal with a record label because you want the up-front cash, why don’t you make cover art of your new mixtape, your first album, sell the cover art in NFT form to your fans, and let them get 20% of the royalties, and you keep 80%,” says Gary V.
“My friends, what I just said, is absolutely going to happen over the next 24-36 months, and it’s going to revolutionise the music industry between streaming SoundCloud, Spotify, and between TikTok discoverability, building community and demand, having distribution, the NFT is the last piece,” he adds. “It’s the way to get the royalties in place but it’s going to be your fans that get 20% instead of your label getting 80%.”
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TIO asked three local music industry execs for their opinion on the suggestion. Naturally, Mardi Caught (The Annex), Andrew Stone (Chugg Music) and Rachel Kelly (Utopia) all see the benefit in deepening ties with fans, but they also have a few reservations.
Mardi Caught
Head of The Annex
Mardi Caught
“The interesting thing about the world of NFTs is it raises the whole block chain supply proposition for music to the forefront. It does allow the freedom for artists to move even closer to the consumer and the idea of using the NFT to fund your release is an interesting one, but it does overlook the additional values of the distributor and label models.
“The intriguing thing for me is that it introduces another variation into the supply chain so artists have another option to decide their best route to market and be selective about the benefits, or the downside of all models, rather than be trapped in one channel only mode that no longer works.
“The advantages of having a vibrant, competitive market for artists in terms of deals and revenue streams can only be beneficial for everyone.”
Andrew Stone
Head of Chugg Music
Andrew Stone
“The NFT infrastructure could be a great mechanism for fans to own a stake in an artist / project, such as they can either take ongoing profits or sell their share later on the secondary market.
“I think the challenge with Gary’s model, though, is that you still need to pay for or provide the expertise required to run a successful label / artist campaign and the best people aren’t always for hire.
“When artists partner with a label they aren’t only doing so for the capital investment – in many cases the motivation behind partnering with a great team is for them to provide the strategy and execution in alignment with the artist’s vision so that both parties benefit from the arrangement.”
Rachel Kelly
VP Australia for Utopia
Rachel Kelly
“While there will always be a place for record labels in the music ecosystem, NFTs present a unique opportunity for emerging artists to connect directly with fans to create an income stream.
“There’s enormous potential for the value of music as an art form to be rediscovered via digital collectivity. In the first half of 2021 Reuters have valued NFT sales at US$2.5 billion – double the value of global music downloads.
“In Australia, we have recently seen the launch of MODA DAO, a decentralised technology network dedicated to the adoption of Web3 in the music industry. NFTs are an emerging technology that enable artists to have a more direct relationship with fans and create additional ways to monetise music.
“At Utopia, we support solutions that create a more sustainable income for creators, particularly emerging artists.’’
This article originally appeared on The Industry Observer, which is now part of The Music Network.