NFTs — the future of art commerce?
the social media channels were ablaze with hype over the new Kings of Leon album on friday — not because of its content (and why would it be for that reason when we all know no popular rock combo has moved music forward an inch since the debut of Tom DeLonge’s Angels & Airwaves project in 2006?) — but because they became the first band to release an album as an NFT (Rolling Stone).
NFT stands for ‘non-fungible token’. this means that, unlike coins, they are not mutually interchangeable: one £1 coin is the same as the next (assuming away the problem of counterfeit); every NFT is technically a unique asset.
the company Kings of Leon partnered with to deliver this product, YellowHeart, heralded the move as the first major attempt in the music industry to use cryptocurrency to help ‘bring value back to music and better direct-to-fan relationships’.
founder / ceo Josh Katz believes this method of selling the album is infinitely more valuable than that of the current Spotify-dominated streaming model. He told Rolling Stone:
Music has become great at selling everything except music. There’s been a race to the bottom where, for as little money as possible, you have access to all of it. Previously, it cost $20 to go get one song.
for their part, YellowHeart will mint 18 unique-looking “golden tickets” as part of the NFT release, each of which contains an actual concert ticket, ‘marking the first time a music ticket has been officially sold as an NFT’. then there is what is described as ‘a riff on the “open edition” concept, where, for a set amount of time, fans can pay to “mint” as many “When You See Yourself” NFTs as they want’, which will eventually become collector’s items (Decrypt).
every next option highlights the underlying benefit of this sales method: Katz hopes that the control artists gain from customising the means of selling their art will ultimately create much greater value for them (and YellowHeart as an agent) over time.
and this is what has made the likes of Shawn Mendes and Grimes join the bandwagon recently. but for everyone else in want of a dedicated cadre of fintech savvy fans to sell NFTs to, there are a few things to consider, such as: a) the set-up costs; b) how big an audience can they attract; and c) whether NFTs can do anything that regular money-based rewards can’t.
to points a and b, getting on the blockchain seems no more likely to grow your audience than joining any other online platform. non-label musical artists, for example, will still have to find an audience for their NFTs, so the effort:reward ratio will likely pale in comparison with a signed act such as Kings of Leon. the size of audience an artist can attract will also largely depend on their level of popularity before the pandemic hit, also mainly a function of concert touring. it is unlikely that an unsigned act will sustain enough of a blockchain-based audience to justify signing up to such a venture.
in truth, outside of the fluke of going viral on social media, even this virtually enhanced method of selling art cannot compensate for the profits brought from performing live, an option closed to many artists for the last 12 or so months now thanks to COVID-19.
this renders point c moot, even if the answer is yes, and that yes is qualified. NFTs are unique, but the discrepancies between its application and that of physical tokens appear incremental, at best. for example, Kings of Leon’s “golden tickets” are an improvement on Willy Wonka’s for the fact that they can be engineered in a way so as to gain from subsequent activity on the NFT by hard-coding a cut of those proceeds for themselves. in the instance of selling the ticket on at a profit, this amounts to a de facto authorisation of ticket touting, under the NFT creator’s control. however, while this may be a positive thing from Kings of Leon’s view and a good reason for them to join forces with YellowHeart, it is of no practical significance to an artist on the breadline concerned with the more immediate issue of selling out a venue in the first place.
and no question of artist product ownership and control is complete without a mention of copyright. the Guardian’s uk technology editor Alex Hern provides the following example of how NFTs fail to satisfactorily solve this problem in his newsletter The World Is Yours:
It’s fine to sell an NFT and tell the buyer “you can do what you want with it, you own it”. But if the buyer discovers someone else is selling t-shirts with their fancy artwork on it, there’s no computational dispute resolution possible. You just have to… go to court. Just like you would if you’d bought the digital artwork by signing an old fashioned contract.
Hern also discusses the wider environmental problem with NFTs on the blockchain, which is an altogether more serious challenge for human existence. but on the narrower subject of whether this will help artists, no matter how many times it is claimed that NFTs will revolutionise the music industry, their hype will almost certainly have more to do with those who will benefit most from them — major label artists, who can attract the most dedicated blockchain bros with moolah — rather than whether it will actually turn the music industry or wider art world on its head.