3LAU’s record-breaking album and how NFTs could revolutionize the music industry [OP-ED]
For years, artists have been resisting the music industry’s obsolete model that overwhelmingly benefits the “Big 3” labels. NFTs might just be the catalyst for sparking a new payout revolution.
Here’s an all-too-familiar story: A promising young act gets scouted from oblivion by an A&R executive at a major label, and blinded by the excitement of their “big break,” signs a binding contract without so much as reading past the section detailing their six-figure advancement. It’s a year and a million dollars worth of recording later, and seemingly out of nowhere, the album that’s consumed the band’s livelihood is now shelved indefinitely. While the label can afford to simply cut their losses on the venture as they do time and time again, the band is left penniless and powerless over their music.
This is the case 99.8% of the time, and if those likelihoods alone aren’t depressing enough, here’s where things get even more dreary. Out of those artists that get signed and dropped before their music sees the light of day, a certain percentage are intentional failures. Simply put, the label essentially buys out prospective artists for the purpose of hindering the competition, eliminating the possibility of the artist being signed to a rival label. It’s no wonder the relationship between the industry—major record labels, publishers, distributors, and performance rights organizations (PROs)—and the artists they represent and often exploit is a notoriously rocky one.
The trend of record labels losing popularity and the desire to “make it” independently isn’t new territory. Chance the Rapper famously found viral success with his independently-released 2013 mixtape, Acid Rap. By will of hard work and sheer talent, and perhaps a little help from his friends in high places, Flying Lotus managed to make a name for himself sans major labels. Still, the cases have been few and far between, and while the artist maintains ownership, the music is often released via major distributors like ADA and The Orchard, which are owned and operated by—you guessed it—major labels (Warner and Sony, respectively).
So, what do NFTs have to do with all of this?
Let’s start with what they are and how they work: NFTs, or non-fungible tokens, are digital assets whose core function is to represent something unique, relying on a distributed ledger called the blockchain—the same technology behind Bitcoin and other cryptocurrencies—to designate an official “copy” of a piece of digital media. In contrast to cryptocurrencies, which serve as a medium of exchange and are fungible, or mutually interchangeable, by nature, NFTs’ purpose can be compared to that of a collector card or proof of authenticity, and are traded as unique and individual assets.
Think of it like this: In the material world, you can easily acquire a knockoff or reproduction of van Gogh’s “The Starry Night” painting for cheap or free, however, there’s only one original, which retains a value in the hundreds of millions of dollars. NFTs translate this concept to the digital world, allowing digital artists to make money by selling authentic NFTs of their art. All NFT transactions are recorded on the blockchain, making it part of a permanent public record and serving as a certification of authenticity that cannot be altered or erased.
Here’s where the whole ordeal becomes bad news for big business: The hallmarks of the blockchain are as follows: Digital, decentralized, and peer-to-peer. Unlike traditional systems that require a central server, the distributed ledger database is spread across several devices on a peer-to-peer network, where each replicates and saves an identical copy of the ledger and updates itself independently. The very essence of the blockchain and NFTs allows transactions to be instantaneous and direct, eliminating the need for the traditional middlemen or authority—record labels, publishers, distributors, and PROs—entirely, putting the power back in the rightful hands of the artists.
3LAU broke records selling NFTs of his Ultraviolet album, totaling $11.6 million.
Fitting with their intrinsically tech-savvy nature, artists within the electronic genres have been some of the most receptive and embracing of the new technology. Early adopters include RAC, Gramatik, deadmau5, Two Feet, ODESZA, Adventure Club, and more, using NFTs to auction their music off as “digital collectibles”—one-of-a-kind assets that possess value based on scarcity. EDM producer and Blockchain influencer 3LAU recently made history with his Ultraviolet album, selling 33 NFTs amounting to a whopping $11.6 million. This is a record for overall sales for a single NFT drop/collection, as well as the highest price paid for a single NFT at $3.6 million.
“I’m excited to help give power back to artists. This is the first step in a longer mission to connect artists directly to their fans, and allow artists to capture the value they create in the world,”— 3LAU
Jacques Greene is changing the publishing game with the help of NFTs.
Canadian electronic musician Jacques Greene is taking the concept a step further by selling his song as an NFT, along with the publishing rights to the music. This is groundbreaking because it rejects the currently-accepted notion that only record labels, publishing groups, and the artists themselves, can hold publishing rights, expanding that possibility to fans and individuals. Citing a “long, pretty bad publishing deal with a big company” in an unfortunately not-uncommon instance, Greene stated via Twitter that the “NFT represents the AV clip – but also the publishing rights to the eventual song release, in perpetuity”.
In any case, it’s justified to say the music industry as a whole is on the cusp of some monumental change, much to the elation of artists and fans, but to the dismay of big business. Only time will tell just how far this new crypto-technology will take the world into this new era of music.
Featured photo via ThisSongIsSick.com
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Freelance writer and bass music enthusiast living in West Philadelphia (alas, not born and raised).