NFTs have been in the news more and more. An early demo recording made by Whitney Houston when she was 17 sold for $1 million at an NFT auction. The winner of the NFT song option gained personal access to this recording in their online vault, along with digital artwork created by another 17-year-old prodigy. NFTs of record albums, .gifs, paintings, and more have been selling for hundreds of thousands or even millions of dollars. If you are a musician, you may be wondering whether you can sell your song as an NFT. If you are a collector, you may be wondering whether purchasing an NFT is a wise investment.
What is a Song NFT?
NFTs are non-fungible tokens that provide a way to prove that someone owns the original digital file. When it comes to physical artwork, owning the art has been clear-cut. For example, there is only one copy of the Mona Lisa. There is only one original open-reel master copy of The Beatles’ Abbey Road album. The originals of a piece of art are always worth more than the copies.
Similarly, owning the original NFT of a song can be a wise investment because there is only one. NFTs allow musicians to add an electronic song file to a non-fungible token. The additional data prove that the file is an original, who owns it, and where it came from, separating the NFT from otherwise identical digital copies of the song.
The data proving that the NFT is an original remains on the blockchain so people can register data and track it in a global, universally accessible database. Popular cryptocurrencies like Bitcoin are also based on the blockchain. Data on the blockchain allows people to track who owns the NFT and any data related to the NFT being purchased by a new owner. Purchases are recorded and confirmed in the database. If you purchase an NFT for a song, you will be able to resell the NFT, possibly for a profit, because you can prove your ownership. If the song has market value, the NFT may become a collectible.
Can I Sell My Song NFT?
Yes. One of the key benefits of purchasing an NFT is that the data will remain on the blockchain. People will be able to track who owns the song’s NFT. NFTs are similar to physical objects and can be bought and sold numerous times. Each time they are bought and sold, their ownership trail will be recorded and confirmed in the blockchain database. This system allows owners of songs to resell NFTs for a profit.
The band Kings of Leon recently launched their album “When You See Yourself” as an NFT. Fans can purchase a $50 NFT album during the two weeks they were on sale. Theirs was one of the first major records to be released as an NFT collection. The blockchain technology company Yellow Heart managed the NFT portion of the album.
Those who purchased an NFT of the album own a token on the blockchain. They can use that token to download the songs on the record and access exclusive moving artwork. The data that comes with the NFT also allows purchasers to have access to limited edition vinyl. You may be wondering what makes this process different from buying a limited-release physical album or downloading a limited-release album on your favorite music player.
Once the two-week time period is over, no more will be made. Existing NFT tokens will not be able to be duplicated. The only way to obtain one of these NFTs is to purchase one on the blockchain from a current owner. IN this sense, the NFTs are kind of like a digital limited edition with its own value and collectibility. They are similar to a rare vinyl album that the owner can choose to sell to a collector at a profit. Kings of Leon generated over $2 million in NFT sales from their new album.
Should I Sell NFTs of My Songs?
For songwriters, there are advantages to pursuing NFTs. It is important to remember that an NFT is separate from a copyright. You will not be selling the copyright to your music by selling NFTs of your songs. Also, NFTs bypass traditional download and streaming markets. As an artist, you can keep more of the money from sales of NFT. If you are not a well-known artist, you may be able to make more money by bypassing streaming services that do not pay well. Physical music has become devalued because of streaming services.
In a way, NFTs are more similar to the days of vinyl and CDs in which the value of a musician’s songs were fixed by the asking price of the CD. You will also have control over which blockchain you use for your song NFTs. Kings of Leon chose Ethereum, which is an upcoming blockchain.
If you are an independent artist, you can choose how you sell your song NFTs. you may want to have a two-week time frame in which people can purchase limited edition NFTs as Kings of Leon. For more well-known artists, you may be able to sell a single NFT of each of your songs at auction. The NFT market is still relatively new. The value of the wider crypto market and Etherum and Blockchain rises and falls.
As song NFTs become more popular and more collectors enter the market, the value of your NFTs market fluctuates. Even with all of these unknowns, many songwriters view NFTs as an advancement that will be beneficial for artists in the future. Songwriters will incorporate gig tickets, artwork, VIP experiences, and more, making NFTs more attractive.
If you are considering creating song NFTs but have questions about the process and your rights,AU LLC is here to help. Our skilled intellectual property attorneys stay on top of all of the new developments with NFTs and will help you understand your rights. Contact us today to schedule your initial consultation.