When a new technology emerges, people often wonder if it is worth getting into. NFTs, in particular, have been the butt of many jokes and derision. Fortunately, NFT investors can rest easy knowing that early adoption was not only the correct investment, but a successful one, according to popular American DJ Steve Aoki.
Why Should Music Be Tokenized?
While digital artists of the visual kind dominate the NFT industry, it is a good reminder that all industries are up for an NFT shakeup. American rock band Kings of Leon was the first to step up and release their slow-burner When You See Yourself album as an NFT.
You may be wondering what innovation does NFT brings into the music industry? After all, you can’t exactly plaster your NFT as a social media avatar, which is the case for the vast majority of generative NFT collections. According to Steve Aoki, American music producer and DJ, it’s all about the royalties.
Before there was blockchain technology that birthed NFT smart contracts, it was exceedingly difficult to both track an asset’s ownership and receive a part of its resales. These two components have to work in synergy for an artist to make a reliable buck. This is why the music industry is so heavily dependent on publishers, taking care of the sales part.
The problem is, record labels are not only serving as gatekeepers for talented musicians, setting their tempo, but also taking enormous cuts of their earnings. Between 50–90% of record label royalties goes to the companies for taking on the risk.
Tokenization Outcompetes Traditional Music Royalties by 10X
NFTs bring a fundamental shift to that stale way of doing music. Befitting his electronic dance style, Aoki was first to enter the new Web3 paradigm. In this ecosystem, users eliminate the record label middlemen on both sides of the equation.
Digital assets (NFTs) + MetaMask wallet private ownership + NFT marketplaces = Metaverse
That metaverse can be anything people make it out to be. Meaning, no more huge profit-taking for record labels. One could say that NFT marketplaces are gatekeepers, but they are hosted on a decentralized blockchain. It is those networks (Ethereum, Solana, Avalanche) that host all the NFT smart contracts. In the case of Steve Aoki, he has his own A0K1VERSE NFT/metaverse platform.
How has it been working out so far?
Speaking at Gala Music event last week, as reported by Decrypt, the NFT venture exceeded all of his expectations by a huge margin:
“But if I was to really break down, okay, in the 10 years I’ve been making music…six albums, and you [combine] all those advances, what I did in one drop last year in NFTs, I made more money,”
In other words, NFTs were a 10x success for him. This is not surprising. Even before he launched Aokiverse, he sold the psychedelically animated “hairy” NFT for $888,888.88, which is not even music-related. Of course, not all musicians have entrepreneurial chops like Steve Aoki. Nonetheless, it would be foolish to avoid NFTs as a way of managing your own royalties and music career with the power of smart contracts.