August 09, 2022
By Murtuza Merchant
Even though the music industry is not known for technological innovation and is still figuring out to use non-fungible tokens, fans will soon see the release of new albums through NFTs, and the industry will see the biggest shift in music consumption, for both live and recorded music, according to Josh Katz, CEO of NFT marketplace YellowHeart.
NFTMetta.com: What are the key advantages for musicians launching NFT collections?
Josh Katz: NFTs can serve a lot of purposes for musicians and the music industry as a whole. Many consumers seem to think that NFTs are little more than unique images and therefore assume that ‘music NFTs’ are just images or visual art ‘connected’ to music. But NFTs and blockchain tech actually empower a lot more than just artwork. At YellowHeart, we help musicians release ‘social tokens’ and NFTs that act as ‘keys’ to unlock and grant access not only to content -like unreleased and exclusive album artwork, videos, and bonus music tracks- but also to events and real-world opportunities. A fan who holds a piece of an artist’s NFT collection can be granted access to after parties, seat upgrades, or deals with artist sponsors. Beyond exclusive content and dynamic ticketing, it is also looking like NFTs are going to be used to memorialize and track rights for songwriters, publishers, and copyright holders.
NFTMetta.com: How do blockchain streaming services benefit artists compared to mainstream services such as Spotify? Do you think these platforms have the potential to replace regular streaming platforms in the future?
Katz: I am a huge fan of Audius in this space. They pay artists directly, which is something the music business has needed. It is going to be difficult to dethrone Spotify, Apple, and Amazon; these platforms still have an opportunity to evolve and integrate blockchain and NFTs. I see a world where Audius grows to be as big as Spotify, but also new decentralized music streaming platforms are constantly being born as well. I am personally waiting for someone to build a decentralized version of SoundCloud.
NFTMetta.com: What are the key advantages of using Blockchain streaming services for fans, if any?
Katz: Fans can receive massive utility via blockchain. They say that Web 3.0 is bringing about “The Internet of Value” and the fact is, fans stand to provide value just as much as they may receive value from an artist or content creator. Blockchain technology may eventually enable a fan’s musical identity to travel with them or to unlock certain online -or real-world access and interactions. Who knows where this might lead when it comes to better, more fulfilling music experiences.
NFTMetta.com: How do you think the music industry is going to adapt to NFTs increasing popularity? Is this something that will become more mainstream for artists releasing music?
Katz: NFT will become an additional format. Just like we saw music released on cassettes, CDs, and MP3s, you will see new albums consistently released as NFTs as well. And you don’t see as many artists releasing downloadable mp3s anymore; eventually, new formats win out. At YellowHeart, we have released several albums that were exclusively NFT releases and both the artists and the fans loved them. At this point, I do not see NFTs replacing streaming, but it may augment the experience. It will be additive and fans who buy the NFT version of an album will receive the best and most interactive (not to mention the most exclusive) music listening experience.
What I am seeing at the moment is, that the music industry is still trying to figure out how to use NFTs. There are many smart people in the music industry, but it’s not an industry known for leading technological innovation. Historically it has been a slow industry to adapt to technology. The record labels and distribution companies did not adapt to web 1 or mobile and got decimated for 20 years. The people running labels today are way too smart to let that happen again.
Also, consumers are driving the adoption of NFTs and more musicians than ever are actively involved in their own career management, album release plans, etc. We are confident that NFTs and blockchain technology are here to stay and when it comes to what is possible with this technology, the industry is only just getting started; YellowHeart is the only company in North America actively facilitating NFT ticketing and this is only the beginning for that. Once the key players in the industry get a real taste of what is possible with NFTs and blockchain technology, I believe it will be the biggest shift in music consumption, for both live and recorded music, that the industry has ever seen.
NFTMetta.com: What are some of the other uses of NFTs in the music industry which are showing big potential and why?
Katz: Rights management is a massive opportunity that is just starting. Publishing companies will move to blockchain for record keeping and those who don’t, will not survive. Songwriters, artists, and producers will simply not want to work with companies that do not use this tech for transparency and payments. NFTs memorialize ownership. NFTs are trackable and traceable digital assets that can include integrated or ‘automatic’ payment models; this is too perfect of a fit to not eventually provide real, tangible value to the music industry.
Beyond this, there are so many uses. At YellowHeart, we are focused on the interactive side of things; getting fans engaged and creating compelling content and experiences is at the heart of what we do. – At the moment, we really believe in the power of NFT ticketing.
We are confident that an interactive and integrated live event/ticketing experience will ultimately benefit the industry as a whole. Not only can fans gain access to exclusive digital content by buying and holding an artist’s NFT or token, but if that same artist then uses our NFT ticketing technology at a concert or festival, the fan can receive special treatment or access, discounts, deals or additional event-specific content based on the token(s) that they hold.
One unique thing we have started doing is airdropping exclusive content, deals, and downloads to fans as they exit an event. The digital ticket ‘stub’ can also change colours or evolve somehow after it is scanned or enters a certain geofenced area – not to mention the NFT technology is keeping an immutable record on the blockchain that that one singular fan was at that one specific show. The possibilities are endless and we are just getting started.
About the author
Murtuza Merchant is a senior journalist and an avid follower of blockchain and cryptocurrencies.