How Decentralized Assets Double Industry Standards
The opinions expressed are solely those of the author and do not reflect the views of Rolling Stone’s editors or publishers.
I was browsing Reels on Instagram recently and came across Gary Vaynerchuk seemingly everywhere talking about something NFT related. I decided to stop my spiral and watch the brief clip, before watching the full video. In the short synthesized clip for Instagram that first caught my eye, he said, “NFTs are more dangerous than Napster, than SoundCloud, than TikTok,” he shared. “Record labels have always had the fact that they’re the mechanism for artist funding. Now you get big on TikTok and SoundCloud and you sell NFTs to your audience, you can raise $5 million a day on the next day.
From my point of view, it’s perfect. NFTs, cryptocurrencies, blockchain – all of these are causing major disruptions in the music industry. The question is, are you on board or are you watching this train go by? Maybe you don’t even know the train is there yet.
But fear not, as these are early days with many changes to come. As someone part of this massive wave of change, I can say with certainty that the potential changes that decentralized assets bring to the music industry are very real. I would like to take this opportunity to share how these decentralized changes could impact certain groups in the music world.
Focus on fans
Without fans, there would be no music industry; It’s that simple. The problem with fans, however, is that they’ve never had a real way to invest in the artists they love. It’s usually a relationship that produces a negative financial return on investment for fans in terms of time and commitment. Fans are very dedicated to their favorite creators, but never get much in return for that time and energy. But what is the change in fan behavior regarding a decentralized world?
Well, the thing is, fans can now turn their spending and financial purchases into property. Instead of buying a t-shirt, maybe they buy an artist’s NFT or fund their project through what’s called a “staking pool.” This property takes the voice of the fan and turns it into a valuable asset, which can be traded and put to use. What other group does this help a lot? The artists.
Artists on the Moon
These decentralized assets that can now be traded, mined, and used for true ownership benefit artists immensely. You may have seen the words “creator economy” come up a lot more frequently lately; the phrase has even become a popular Twitter hashtag. Indeed, those who create this beautiful content that we love are now able to benefit financially from their work. Their revenue streams are faster and more direct, as are their distribution methods.
Talent is always the product, but the creators have never been the true owners on a large scale. Now, with content creation and revenue streams in the hands of artists, they could reap the benefits of their talent much more directly. And the best part of it all? This is happening as fans fuel the creator economy and collect their own rewards.
Challenges and learning curves
Even though digital currencies are disrupting finance, many people still don’t know how to use them, and for good reason. Crypto operates on logic and language that is new to most, and people often write that crypto or NFTs are too risky or time-consuming to take up as a hobby or investment strategy.
But that’s why it’s so exciting that NFTs have reached the music industry. Now, artists can serve as ambassadors for the digital assets of tomorrow, using their own unique style and story to introduce fans to the limitless benefits crypto has to offer.
So how can artists and others in the music industry bring their fanbases to the blockchain?
First, we need to lead with ideas that motivate people to explore crypto. For example, at my company, Geojam, we started with a system where users could earn points and use them as in-app money. Once our community understood how it worked, we merged the points system with the blockchain. Discover unique ways to get your audience comfortable with blockchain technology and the intricacies of NFTs. A little education can go a long way. As artists and labels harness the power of DeFi, they need to assess how they can integrate crypto and NFTs into their existing offerings. Fans are more likely to give it a shot if they’re onboarded to a service or experience they already know and love.
Second, we need to introduce innovative methods to onboard and retain users.
Crypto-based platforms require different wallets and forms of digital currency, so there are challenges when it comes to engaging casual users on these next-gen platforms. It’s up to industry to make sure these tools become easier to use – and that it’s done in a way that doesn’t discourage or alienate people new to the space. This means creating intuitive platforms and educating people with simple, accessible content that shows them how crypto can be a game-changing tool in their lives.
There’s no one-size-fits-all formula for this process (yet), and that’s the best part. The future of blockchain in music will be what we make it – so let’s make it one that gives artists and fans more ways than ever to create, engage and earn.