22 Nov 2021 · 3 min read

How Musicians Can Make Money through NFTs

Disclaimer: The text below is an advertorial article that was not written by Cryptonews.com journalists.

There’s a problem with the way musicians make the bulk of their revenue today. Typically, artists make a large share of their revenue through online streaming services, like Spotify, Apple Music and Tidal. But after all of the talent, creativity and hard work they put into their music, they typically only accrue 12% of the revenue generated from their music on these streaming platforms. With artists accruing only approximately USD .0006 per stream on these platforms, combined with only 12% of the revenues going towards them personally, the gains from streams are minimal. If an artist manages to put out a song that has 100 million streams, the streaming platform will make USD 60,000, but the artist will only see USD 7,200 of that income. And keep in mind that getting 100 million streams is no easy feat.

There’s an even greater underlying issue, and that lies with the traditional record label structure. Typically, when an artist is signed onto a record label, the label loans money to the artist for them to produce their album. Once the artist’s album is released, they do not generate any revenue for it until they have paid back the loan. Even when the loan is paid back, they only generate between 10-20% of profits made from their album sales, as labels generally take 80-90% of the funds.

Musicians increasingly need to be creative when seeking to generate revenue. In addition to streaming, musicians typically rely on live concerts, live and digital experiences and merchandise to generate income. Stars who are most creative on these fronts have stood most to benefit. Travis Scott, for instance, in addition to hosting one-of-a-kind concerts replete with rollercoasters and flames, has also put out digital concerts that have made him millions. In 2019, his nine-minute digital concert “Fortnite”, combined with merchandise sales made him roughly USD 20 million. Compare this to his 2018-19 Astroworld tour, where he made 56 stops and made approximately USD 53 million. This is huge. Through one digital concert that was recorded and accessible through the internet, Travis was able to make almost half the profit he did from a tour where he had to make 56 stops.

So it doesn’t come as a surprise that when NFTs came on the scene, artists began jumping on the opportunity to create additional income streams. Grimes, for example, in February this year released ten exclusive NFT that made her millions. These NFTs consisted primarily of videos, some of which had exclusive songs. Some of the NFTs had one copy -- selling for approximately USD 400,000 -- while others had hundreds of copies, selling for over USD 7,500. Kings of Leon in March made over USD 2m though NFT sales of their album “When You See Yourself”. Steve Aoki sold a single piece of digital art titled “Hairy”  for USD 888,888.88.

Artists are making huge sums of money through NFTs, but the genius behind the use of NFTs for income is that they are a relatively easy way for artists to make income. Artists can create a single digital item and decide whether to sell it exclusively or copies of it. Then the world becomes their marketplace -- they can easily sell their NFTs to fans around the world, shipping logistics and fees excluded. 

Some companies are creatively helping artists make income through NFTs. StarCoin, for instance, solves some of the challenges that artists typically face when navigating the traditional music industry. StarCoin is the first cryptocurrency to partner with a record label. Through NFTs, StarCoin allows artists to earn up to 80% of the revenues through their music on streaming  platforms. It signs an artist, records their music, and allows artists to create exclusive NFTs of their work and sell it on StarCoin’s NFT marketplace. 

To read more about StarCoin and the revolution of the music industry through NFTs, click here.

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