The NFT Industry: On Scams, Exploitations And Dealing With The Nitty-Gritty Of The Business

(This is the second part of a three-part deep dive into the current state of the world’s music NFT industry and how it is making an impact on society)

NFT scam site HitPiece.com and its founders were sent a demand letter on Friday by the Recording Industry Association of America (RIAA) demanding that the site stop violating music creator Intellectual Property rights, detail all site activities, and revenue to date, and account for all NFTs and artwork auctioned.

Chief Executive and Chairman Mitch Glazier explained why the RIAA was able to move so quickly in a statement to the press:

“As music lovers and artists embrace new technologies like NFTs, there is always someone looking to take advantage of their energy and excitement.”

According to Glazier, given the way fans were misled and defrauded by these unauthorized NFTs and the massive danger they posed to both fans and artists, “it was clear that we needed to act immediately and urgently to defend fairness and honesty in the marketplace.”

HitPiece.com is now offline.

Blockchain To The Rescue

Revenues from streams are constantly rolling, but artists still have it tough to make a living for them.

According to recent stats and figures, Spotify, the biggest audio-streaming subscription service yet pays $0.0032 per play. Meanwhile, Apple Music, the second-largest audio-streaming subscription service pays $0.0056 per play. YouTube’s revenue dips as low as $0.0009.

Here’s where NFT is a hit. Blockchain technology is saving the music industry by making records scarce and secured again.

Anything music-related can be tokenized. From music tracks, audio sounds, album cover, artwork, concert tickets, to unique artist merchandise— all of these can be paired by their own NFTs. Artists are able to create and produce various content for their audiences out of their own doing.

Next… Musicians get to build their own community and connect with their fans through NFTs.

From a fan perspective, NFTs are also a win.

Why spend hundreds of dollars on records, iTunes, Spotify, and Apple Music when you know that these don’t go directly to your favorite artists?

Total crypto market cap at $1.86 trillion in the daily chart | Source: TradingView.com

Related Reading | Baby Doge Signs NFT Partnership With German Top Division Soccer Club Hoffenheim

Making Ends Meet In The NFT Industry

Since the rise of NFTs, musicians, both popular and rising, have come to realize that they could go directly to their fans for revenues instead of relying on unfair music label deals.

They can sell unique, tokenized versions of their songs, albums, performances, and digital artwork, and get marginally higher profits than ever.

The NFT industry is setting a new stage for creators to market and sell their digital assets, expanding the limitations of how art, music, literature, and more can be disseminated, owned, and consumed.

Brett Shear, an NFT collector who invested in around 45 songs on the music platform Catalog for which he paid more than 40 ETH or $177,000, said that buying NFTS connected him to the music on a deeper level.

“In the same way that you buy art that you want to put in your apartment, I want to listen to this music and enjoy it — and it’s a different feeling to own it. I’m happy spending money on artists that I believe in their vision — and in addition to that, I do believe that music NFTs are going to be significantly more valuable in the future,” Shear said.

Related Reading / Music NFTs Are Taking Over 2022 – And Here’s Why

On Funding And Playing The Right Chords

Fan funding also comes around as a trend in NFT music.

Here, supporters can invest money in the musicians’ works. In exchange, they will be allowed to own portions of the music. This then enables the artists to raise funding for songs and albums.

Especially during this pandemic, artists are eyeing this opportunity as a great innovation to save themselves from the financial windfall. While attending to their dedicated fanbases’ desires, they also get to earn money.

This is best exemplified by Chicago rapper Ibn Inglor, who successfully raised $92,000 by selling various digital assets for fans — including shares of his upcoming album’s royalties.

Singer Daniel Allan — whose songs got millions of plays in a year — only earned a few hundred bucks monthly from streaming. When he made his foray into the NFT industry, Allan said that having a hundred true fans is much better than garnering many casual listeners.

He focuses his time instead of talking with his fans on his Discord, listening to their feedback, and building a solid community. Since many of them have a share of his masters, they are thus deeply invested in his success, not only interested in the financial side of it.

(To be continued tomorrow)

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