The acronym NFT was largely unheard of until last year. Over the past several months it has taken the fine-art collecting world, fashion world, and even the music world by storm. NFTs or ‘Non-Fungible Tokens’ are unique digital assets associated with real world objects like art, videos, music or even a piece of furniture, that are stored in a digital ledger called blockchain and can be sold and traded on digital markets.
In a world where businesses have been paralysed by the ongoing pandemic, musicians have unearthed this new path to monetise their work. There are many things that can be packaged and sold as NFTs like concert tickets, special access and private NFT holders-only performances, livestream interviews and shows, and limited-edition albums. NFTs enable fans to own something directly from their favourite artist and this creates a much stronger artist-to-fan relationship.
In February 2021, musician and EDM sensation Grimes released a series of 10 tokenised artworks as part of her ‘WarNymph Collection Vol. 1’ series during her first NFT drop. Within 20 minutes of releasing her content she racked up over $5.8 million.
Some other prominent musicians to take the NFT plunge are rockers Kings of Leon, Shawn Mendes, Linkin Park’s Mike Shinoda, rapper Lil Pump, Deadmau5, Ja Rule and others.
Closer home, in April 2021, Tamil singer-composer Kaber Vasuki’s 2012 demo version of a song called ‘Vasanam’ was sold as a NFT for the price of 50 Ethereum, a cryptocurrency, which was roughly valued at ₹1.5 crore at the time.
Recently, Ritviz and Nucleya also announced the launch of their collaborative album ‘Baaraat’, for which the duo have put together a collection of NFTs that are each associated to different benefits linked to the Ritviz and Nucleya universes. They are the first creators to auction their digital tokens, marking a memorable milestone in India’s NFT marketplace.
“Right now we are in a new renaissance as NFTs are putting value and attention back into art and music. We wanted to create a different experience for the audience with our music. Each one of these bundles is a unique NFT with the most incredible art you have ever seen. There’s a lot of hope in what they can bring to the wider music community in time,” pointed out Ritviz.
So, what are NFTs?
An NFT is a unique digital item. The digital item can be art, audio, videos, items in video games and other forms of creative work. Artists and musicians can create NFTs and auction them on the digital platforms, where their fans can buy them. Artists can monetise their art or other merchandise and can also receive royalties every time a buyer of that digital copy resells it.
“These digital assets give a unique opportunity to both investors and creators to invest in a different asset class that builds value over time. NFTs also enable creators to earn royalties, which are payments made to a creator, such as a musician, author, or artist, for every secondary sale made. Something that was never possible before. NFTs work as a business solution for the passion economy. Artists get to directly engage with their fans (collectors) who are invested in them and their projects,” explained Vishakha Singh, Vice President, Advisor, WazirX NFT Marketplace.
“Through their NFT drops and the story behind their drops, artists build an emotional connect with their collectors, who come from diverse communities yet resonate with the art created by them. In other words both the artists and the collectors are exposed to a like minded global audience who truly appreciates each other’s contribution to grow and support the NFT community. Since the launch we have observed several of our Spotlight artists collaborating with discover artists for various projects.”
WazirX NFT marketplace uses Binance Smart Chain where all transactions are recorded. As the NFT marketplace is de-centralised, users need to sign up to the platform by using their own crypto wallets. The company currently supports Metamask and Binance wallets on their platform.
Dhruv Saxena, Chief Strategy Officer, Vistas Media Capital the principle share holder of the NFT trading platform, Fantico, further explained,
“NFTs are not mass selling products. We are at a stage now where everyone is trying to figure out the best way to monetise through NFTs while keeping in mind all the legal aspects if attached. NFTs fall under the purview of the Copyright Act of India just like other music related products. There is surely an excitement about it. The composers, artists, labels, distributors all are figuring out the content they can legally sell, lease or reproduce and package as NFTs.”
How big is the market for music NFTs globally?
The global NFT market grew exponentially this year, compared to last year’s $13.7m in the first half. With almost all the industry sectors taking the plunge, the sales volumes have remained high.
From top designers like Louie Vuitton and Burberry to players like Lionel Messi, everybody is jumping on to the NFT bandwagon.
“NFTs are also gaining steam in Asian countries. It is one of the hottest global trends that people have witnessed and the NFT market will continue to grow in the future. On WazirX NFT Marketplace, a total number of 2759 NFTs have been minted so far, out of which 993 NFTs have sold out as of 23rd of August. WazirX NFT Marketplace not only empowers the creators but it is also a perfect platform for art enthusiasts who can get their hands on exclusive artworks by some of the most renowned artists of the country,” said Singh.
Is the Indian music market opening up to NFTs?
Speculating about the same, Saxena said,
“Around 25 music related NFTs have been sold so far, but the pent up demand is big. We are currently looking at the longevity of the products. Our view is that after art, music has the biggest space in terms of what it is and where it could be in India. We expect the sales to increase tenfold in the next 2-3 months. There will be hits and misses but it will be a dominant format in a year or so, though these are still early days.”
“We have identified the NFTs buyers as superfans, collectors and investors. These three function and think differently. A superfan might not have a lot of money but will buy stuff he likes. An investor will buy a Hans Zimmers or AR Rahman’s unreleased track which could be sold at a profit in future. Collectors don’t care about the resale value and will buy anything related to their favourite musicians to add to their collection. The ratio amongst these three is unknown as the market is pretty new. But these three do exist for sure.”
Recent Developments in the Indian NFT Market
According to Singh,
● Asia’s biggest electronic dance music festival – Sunburn sold 10 one-of-its-kind NFTs out of which two NFTs were sold in less than 20 seconds and four, in less than 1 minute.
● DJ Shaan minted an NFT which sold for 799 WRX, within a few hours of dropping on the platform.
● Ritviz and Nucleya announced India’s biggest NFT drop. With this announcement, WazirX NFT Marketplace also launched its auction feature which was welcomed immensely by the NFT enthusiasts showing the growing scope of this segment.
Speaking on the development Nucleya emphasised,
“It’s imperative for artists to stay ahead of the curve. The way music is consumed has changed so much over the years NFTs are a disruptive way for artists to put themselves out there and build on relationships with their fans, and how artists use this new medium will definitely be exciting to watch.”
How can musicians benefit from NFT?
Ritviz and Nucleya will also release over 60 NFTs in what will be India’s largest NFT drop on the WazirX NFT marketplace. This collaboration also marks the launch of the highly-anticipated auction feature on WazirX NFT marketplace. Their first drop was made on the 15th of August. The NFTs include a mix of iconic photographs, artworks that embody different phases of their careers, personal artefacts like sneakers and clothing, and limited edition art pieces.
Singh, a crypto enthusiast/actor/film producer herself, expounded.
“NFTs enable artists to reach out to the masses and interact with their fan base directly. Since there are no third parties involved, they do not have to distribute the profits to anyone. This means that all revenue and resale royalties go directly to the artists, making their music and offers even more financially lucrative. And since NFTs are a world-wide trend, native creators can present their work to a global audience, getting huge exposure. It is a decentralized network with no hierarchy and everyone gets compensated in an honest market space.”
While Singh is optimistic, it is clear NFT remains an unknown entity to the majority of the consumer. With cryptocurrencies themselves under pressure due to political and economic reasons, will investors take a shine to them?
“NFTs are the digital equivalent of a physical ownership certificate. If you cut through the hype then one will realise that unless the core proposition of the NFT is an intrinsically valuable item then the effort is useless. Having said that because of the digital playground and blockchain tech on which a NFT sanity is based, the range of ‘valuable items’ are far wider today and does not have to be limited to physical goods like merchandise only – it could even be an experience as value . It is way too early in the lifespan of an NFT to predict if it will be the next big thing or fizzle out,” stressed Mandar Thakur, COO, Times Music.
Sharing his thoughts on the same, Saxena emphasised,
“NFTs might be called by a different name in the future but they will be valuable. It might migrate to a different blockchain system. Regarding the uncertainties over cryptocurrencies, at Fantico we have delinked NFTs from them. People can buy NFTs using regular currency on our platform. The investor or at times the collectors too might be affected with the crypto fluctuations but the superfan is unfazed by it.”