NFTs, the metaverse and the future of music
Web3 is opening up a new horizon of possibility for musicians, labels and fans. Here’s a look at how non-fungible tokens (NFTs) can serve as a bridge leading into the metaverse – and into a new era of music.
NFTs made a $40bn market debut in 2021, but we’ve only scratched the surface of their potential. If 2021 was the year of digital collectibles and generative art collections, 2022 is shaping up as the year for music-based NFTs to break out in a big way. At Curio, we’ve taken a big step in that direction with our partnership with Universal Music Group (UMG), one of the largest collections of labels and artists in the world.
What’s next? How can music-based NFTs tap into the vast and diverse music audience and provide real value and utility for fans? This article outlines some strategies that artists, labels and publishers can use to extend the appeal of music into web3 to create more engagement, excitement and revenue potential.
NFTs could provide the music industry with new opportunities for collaboration, community-building and more / Adobe Stock
Giving fans more of what they want
People become music superfans for all kinds of reasons. They might prefer grooving to tunes from their earbuds or listen intently from expensive stereo equipment. They might be festival-goers or prefer live performances from small venues. Maybe they follow their favorite artists on social media or keep their eyes on viral tracks making waves on YouTube. A few might even dream of becoming famous musicians, DJs or industry professionals themselves.
NFTs can help all these audiences get more of what they want, combining the convenience of digital access with the exclusivity, features and potential financial rewards of blockchain-based technology.
The latest marketing news and insights straight to your inbox.
Get the best of The Drum by choosing from a series of great email briefings, whether that’s daily news, weekly recaps or deep dives into media or creativity.Sign up
For listeners: access to bonus tracks, live performances, remixes and playlists
Fans who are in it purely for the music itself have long been enticed by box sets, reissues of old favorites and other opportunities to discover new great tunes by their favorite performers. NFTs can play into labels’ existing reissue strategies by conferring membership to exclusive sites that offer previews, downloads and other features including artist-curated playlists and unmixed tracks. The more value that labels build into these tokens, the more fans will seek to acquire them, pushing up their value on secondary markets and building revenue opportunities with each transaction.
For event attendees: special access and premiums
Live shows have limited capacities, which make them inherently exclusive. NFTs can offer another layer of VIP benefits and digital experiences to live events. They can provide entry to real-world VIP rooms, reserved seats, even limited one-on-ones and photo opportunities with performers. Because they are limited, trackable and transferable, they can’t be counterfeited or scalped, and provide additional revenue to the artist, venue, label and management whenever they are resold and transferred.
NFTs can also include functionality to unlock digital content such as augmented reality (AR) overlays to concert performances. They can offer the opportunity to buy limited-edition merchandise at shows, or receive other perks and discounts. They can also be sold or given as premiums to attendees of live performances to serve as digital keepsakes of once-in-a-lifetime experiences.
For superfans: a deeper level of engagement
Superfans of bands and artists aren’t just in it for the music – they follow every aspect of their favorite artists’ public persona, including the lifestyle merchandise and other media that those creators produce. NFTs tie directly into that energy and revenue stream. They are a new way to monetize an artist’s reputation and following with a personal collection of art, photography, handwritten lyrics, memorabilia and other digital assets. NFTs can also offer exclusive access to unique experiences with the creators, such as online meet-and-greets, personalized profile pictures, voicemail greetings, fan meet-ups and first cracks at limited-edition merchandise.
For aspiring professionals: a chance for wider exposure
Musicians toiling away at their craft are stuck in a dilemma: the technology to produce and distribute music has never been more accessible, but the market is so crowded with new talent that it can be difficult to get enough attention or income to make a living. NFTs can provide a path up for musicians climbing the ladder, and can provide labels with the means to discover new artists. For example, a label-sponsored NFT drop could offer the chance to participate in, or vote in, a reality show-like contest for new musicians.
PFPs, skins and swag
The ability to use NFTs as profile pictures (PFPs) is driving the market for limited generative art projects such as Bored Ape Yacht Club. Any musician or label can incorporate the ability to generate a branded PFP as part of their NFT strategy. But what about customizing existing PFPs with custom accessories and swag? Imagine accessorizing a Bored Ape or a character from any other popular collection with a Jay-Z ‘Ballroom Marfa’ cap or a Bob Marley rastacap, or any other item from a musical artist’s collection. This not only presents an additional revenue opportunity, but also a chance for heightened brand exposure.
Future vision: collaboration, gamification, immersion
Curators as creators
Music is often a communal and collaborative activity. Musicians jam together to make new tunes. Fans and performers feed off each other’s energy at live events. DJs mix and curate existing recordings to make something new.
NFTs can provide access to similar experiences. We can offer owners of music-based NFTs a virtual space where they can bring artists and works together in new ways. Imagine a virtual jam session between Taylor Swift and The Beatles, or BTS and John Coltrane, in a private immersive rehearsal space, activated by specific smart contracts that ensure rights management and fractional payment to rights holders.
In those cases where the label owns both the master and the publishing rights, or works out an agreement with the artist, the label could offer unmixed tracks that users could remix and customize using digital tools, then create an NFT of their own.
Getting rewarded for your fandom
The fan ecosystem is fueled by credibility and reputation. By adding gamified elements to NFT drops such as ‘Easter eggs’ (content that requires some effort to discover), puzzles, game pieces, loyalty rewards and leaderboards, labels can measure the impact and engagement of their campaigns and reward superfans with exclusive swag and offers. This also adds a layer of utility to the NFTs, offering fans more reasons to collect and enjoy their tokens while showing their appreciation for their favorite artists.
Music in the metaverse
NFTs are a bridge between traditional media strategies and the emerging vision of the metaverse. We envision a future in which musicians can perform live in an immersive digital environment, attended by fans from all around the world who are using NFTs as points-of-entry. Eventually, the ability to customize PFPs might become a mechanism for creating skins for virtual avatars.
But before we get to that point, leaders in the music space will need to transition their fanbase into the web3 digital economy. At Curio, we believe that there are as many ways to achieve that goal as there are musical styles to jam to.
Rikin Mantri is the co-founder and co-chief executive of Curio.