Are NFTs going to revolutionise the music industry and give artists a creative new income stream? Or are they just stonkbusting scams further enriching crypto-millionaires while killing the planet?
Or – bear with us on this startling thought – is it perhaps a bit too early to jump to such firm conclusions?
At Music Ally’s Sandbox Summit Global online conference yesterday, we kicked off with a keynote interview with two people who have been getting hands on with non-fungible tokens and their potential for music.
Joe Conyers III is the former Downtown Music and Songtrust executive who recently joined Crypto.com as its EVP and global head of NFT. Grant Dexter is the CEO of startup Fanaply. The pair were interviewed by Music Ally’s Joe Sparrow.
“I think we’re still really early at where NFTs create this relationship with the fan. We’re seeing people test a lot of things out. I think the long-term relationship building with fans is going to be very personalised to the artist,” said Conyers. He cited the example of K Camp, of ‘Lottery (Renegade)’ fame, whose NFTs took the form of lottery-style tickets that will yield rewards for the fans who bought them.
“Maybe he invites people who hold a ticket to a concert or an event, or maybe one day he lets people burn them and reduce the supply in the market, and [in return] gives those people free things,” he said.
“That’s one way of doing it, but there are going to be 100 cool things. And this is going to be unique to each type of artist, each type of fanbase. What you do for BTS Army might be different to what you do for a baby band.”
Conyers also said that a key part of the future for music NFTs will be portability: the potential to take, display and use them across various websites and services.
“Using these across Discord or Twitch is really going to be what people want.. as things get more decentralised, in the same way as digital skins inside video games have necome pervasive, you’re going to start to see people being able to move those things around,” said Conyers, before stressing again the early stage we’re in.
“The game hasn’t even started yet! We’re in warm-ups before the game…”
Dexter agreed on that, and also on the point that owning an NFT will bring real rewards to fans, rather than just being something they collect and/or try to make a profit on by selling them on.
“We’ll see utility. ‘Hey, you’ve been to five shows in a row, your NFT is going to get upgraded into a super-rare one’… just rewarding superfandom,” he said. “And engagement, the idea that the NFT might exist, you might earn it or buy it in one place, but it might give you some powers inside of Snapchat or some opportunity inside of TikTok or at the next show you go to. That’s what I’m really excited about.”
While the early NFT headlines were made by multimillion-dollar purchases, Dexter said the more interesting potential is in making sure these collectibles are affordable for regular fans, likely in the $10-$100 range.
The conversation also touched on the importance of visual content for NFTs, with Conyers offering some no-nonsense advice to artists who might think the value is all about the music.
“What you’re capitalising on as a musician is not your music here. It’s really the celebrity, and maybe you can sell some scarcity around the music,” he said – referring to attempts to sell NFTs that include unreleased or exclusive music.
Of course, such exclusivity is often short-lived. “The second you put music on the internet, it’s out there and it’s not scarce any more!” he said. This is why the visual element of NFTs is important, and why a number of musicians have been pairing up with designers and visual artists in this space.
“I think you have to respect that this at least for the time being unless you’re selling the physical utility attribute, you’re going to lead with the visuals. That’s what gets people’s eye or attracts them off some random social post,” said Conyers. “I ascribe 75-85% of the value in the visuals, and the rest in the celebrity and some music.”
Dexter thinks that the value of NFTs can hold up even without physical rewards. He cited the example of Death Row Records, which has worked with Fanaply on a series of NFT drops – “100-200 items every two weeks” – which have all sold out quickly.
“The initial launch came with some items because they wanted to create some value, and now they’ve moved over to the intrinsic value of not bundling,” he said. “I think the long term value is going to be complete, intrinsic value bundled inside the NFT, and it’s going to be tied to status, utility and engagement.”
Both Conyers and Dexter have their eyes on the mid-to-long term impact of NFTs in music, and think that the more examples there are of creative, well-planned music (and non-music) NFTs, the less strange the space will seem.
“It will seem a lot less crazy in 10 years. In five years, three years, one year even!” said Conyers. “That’s just the way that people will interact with the world. The blurring lines between the physical and digital worlds is going to come hard and fast. It will be everywhere at once… probably a year out for most big companies… You’re seeing really really big social businesses thinking hard about how they’re going to enter the space.”
Dexter brought it back to the notion that NFTs will have to provide genuine benefits for fans, moving away from the idea of these products as pure investments.
“You’re going to enjoy your NFT for the cool stuff it does for you, not for how much you think it might be worth,” he said. “We think that the NFT is going to be your digital key that opens some doors and gives you some status and lets you show off to your friends and get something in TikTok. That’s the real future, not buying something and putting it up for sale 10 minutes later.”
One key question around NFTs concerns the environmental impact: the costs (in climate terms) of minting and tracking these digital items. It’s part of the wider debate around blockchain and cryptocurrencies, and with many artists increasingly aware of climate issues, it could stop some of them from exploring NFTs.
Conyers sought to reassure. “This is not an NFT problem. This is a crypto problem, and there are a lot of reasons why that will be solved in the near future,” he said. “Every day I guess I’m less worried about the impact, because the outcry has pushed people to move probably five years faster than they would have otherwise.”
He also compared NFTs to traditional physical merchandise. “If you’re replacing a t-shirt, which is one of the most expensive things to build for the climate… replacing it with a digital good is maybe even better for the environment!”
The session concluded with advice from Conyers and Dexter to the music industry on how to explore NFTs in a positive way, rather than simply jumping on the bandwagon hoping for stonks.
“It’s all about storytelling. Don’t just do an NFT or doing an NFT’s sake. You have to have it built into your canon as an artist. It has to be an extension of what you’re already doing, or telling a new part of your journey,” said Conyers. “Where’s the value? It’s the concept. When you do high-concept stuff, you get valued heavily for it.”
“If you have something to say or you want to say something, these are a terrific way to do that. We see the future in terms of proof of fandom, status, utility and engagement,” agreed Dexter. “And all of those can flow into the same bucket.”
Sandbox Summit Global was held in association with Linkfire, Vevo and Songfluencer and supported by Colabox.