What are NFTs and what do they mean for rock fans?
Would you pay millions of dollars for something that doesn’t physically exist?
It might sound ludicrous, but that’s exactly what’s happening in the strange-but-lucrative world of non-fungible tokens, or NFTs, to use their more rock’n’roll-sounding abbreviation.
NFTs, essentially, represent unique digital assets – usually artwork, music or a combination of both. They can be ‘minted’, sold and traded via specialist marketplaces with daft names like Nifty Gateway, often in exchange for crypto currencies such as Ethereum, and stored on a digital ledger called a blockchain.
If all that’s making your brain hurt, think of them as the digital equivalent of highly collectible merch or autographed, ultra-rare vinyl. As with physical items, you can’t reproduce them, while even display options are currently fairly limited (although likely to improve soon). But the blockchain technology guarantees your bragging rights, as there can be no doubt about their authenticity.
Some in the industry think it’s a fad, while others even compare the sector to a pyramid scheme, but that hasn’t stopped an explosion in profile and prices in recent months, as the mainstreaming of cryptocurrencies has gathered pace and bands search for alternative income streams in the light of live music’s ongoing hiatus.
And some of the biggest NFT success stories so far come from music, albeit in genres beyond rock and metal. Grimes – who collaborated with Bring Me The Horizon on Nihilist Blues in 2019 – recently sold a staggering $5.8 million (£4.2m) worth of art NFTs, while EDM producer 3LAU sold a 33-item collection for a scarcely-believable $11.6m (£8.5m).
At the start of the year, people would have said, ‘No-one’s going to pay a lot of money for something you can’t even put on your wall,’ ” chuckles Paul Craig, Biffy Clyro manager and chair of industry lobby group the Music Managers Forum. “But when you hear about millions of dollars being paid for various things, a lot of ears prick up from people that previously were sceptical or silent. They might still be sceptical, but they’re certainly not silent anymore…”
Like many artists, Paul says Team Biffy are looking at potentially producing NFTs in the future, as a way to “engage with superfans who want collectible editions and rarities in a digital format”. And, indeed, most of the rock artists who’ve got involved so far have pitched their NFTs at hardcore admirers, rather than the megarich crypto ‘whales’ investing millions and ramping up the hype.
Linkin Park’s Mike Shinoda became the first major artist to launch a single, Happy Endings, via NFT. Ten animated pieces of artwork, accompanied by a 75-second clip of the song, sold for between a few hundred and several thousand dollars each at auction, with each purchaser also rewarded with a real-world art print from Mike.
Meanwhile, Slipknot’s Clown just launched his first NFT, and alternative rockers Kings Of Leon released their latest album, When You See Yourself, in the format as well as via streaming services. KOL’s NFT auction had to be extended when some items failed to reach their reserve price, but the move still generated huge publicity and did eventually gross around $2m (£1.5m), including around $500,000 (£366,000) for the Crew Nation fund to support live music workers.
High art aficionados may turn their noses up at such lower-level schemes but, at a time when many bands are up in arms about the lack of revenue from the likes of Spotify, it’s worth noting that it will probably take a very long time before that Kings Of Leon album generates $2m via streaming services. Artists even make money if the NFT is sold on – because transactions are tracked via the blockchain, they can charge a royalty whenever one is traded, something you can’t do with physical rarities. No wonder pretty much everyone in music is now looking at what they can do with NFTs.
“Every second email in my inbox is NFT related right now, and has been for weeks,” says Sammy Andrews, CEO of Deviate Digital, a specialist digital agency that has worked with the likes of You Me At Six, Skunk Anansie and The Pretty Reckless. “Every manager I know is looking at it. Now is a very good time to consider it, but I wouldn’t bother doing one just for the sake of it. People should think about the offering and make sure you are being fair to fans.”
That may not be the only thing holding your favourite rock band from joining the gold rush. Some cryptocurrencies use so much computing power that they are damaging for the environment, while most platforms require wrestling with exchange rates, specialist browser extensions and ‘cryptowallets’ before you can even try to get involved. It’s a lot more complicated than just hitting up the merch table at a gig.
One person trying to make NFTs more accessible is Joe Conyers III, executive vice-president and global head of NFTs at Crypto.com which, unlike many platforms, accepts good, old-fashioned credit cards as well as cryptocurrency. He recently left a top job in music as chief strategy officer at Downtown Music and is convinced NFTs will become “a big part of the way people market music and art, how they talk about it, and the way it will change hands in the future”.
A metal fan, he also sees huge potential for artists from the rock sector.
“There are a lot of metal bands with so much lore around them and so much storytelling capability,” he says. “I’d love to do something with Ozzy Osbourne or Iron Maiden. They’re classic mega merchers and the world building that they’ve done, oh my god… I can’t wait to see what they do in this space.”
Of course, rock and metal also boast some of the most loyal fanbases in the world. But even the most devoted fan might think twice about shelling out large sums for something they could stream for free, especially if the current surge in interest turns out to be a bubble, rather than a boom. What if buyers find themselves holding virtual possessions that are somehow both expensive and valueless?
“My advice would be to fully understand what you’re buying,” says Sammy Andrews. “This is all about scarcity. You’re buying a token – not an actual object. And be careful with any crypto currencies, on a daily basis they can fluctuate by up to 10 per cent. Be prepared for that – and don’t ever spend what you can’t afford to lose.”
Meanwhile, bands will be wondering if they can afford to miss out on a potentially lucrative source of revenue, at a time when so many musicians are struggling financially.
“You don’t have to go for the million-dollar NFT, you can do things that are just cool for fans,” stresses Joe Conyers. “This is another way to access your fandom and give them what they want, which is more access and a deeper connection with the band.”
Paul Craig, meanwhile, is hopeful that people will still be putting the ‘fun’ into ‘non-fungible’ long after the pandemic has finally receded.
“Like all these things, there will be peaks and troughs,” he says. “But I do think it’s ultimately sustainable. The fans will get something collectible, exclusive and rare and therefore valuable, and the artist will be able to monetise it in a way that’s fair and reasonable. Hopefully everyone will win.”
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