#102 - Are you interested in NFTs?
#102 - Are you interested in NFTs?
NFT - Non Fungible Tokens. Have you heard of them? Think of them as collectable with digital provenance and the ability to pay the creators and owners of the NFT. Here's a good article on the ABC's of NFTs and why these could be a game changer for musicians and creators to earn a living on what they create.
Piracy has always been an issue in the music business. Even before digital became the mainstream's way to hear music, piracy existed. Anticipating piracy issues, cassettes had a tax added for every blank cassette purchased that was supposed to go back to the artists. CDs were famously pirated - and sometimes by the musicians themselves to sell at gigs and avoid going through the record label system. Napster became the download company to cherish by consumers and be hated by artists and labels for allowing anyone to copy their music while avoiding making a payment.
If you think streaming has prevented piracy, well, you're wrong. It continues around the world. I've seen it with our own music. But that's not all. Streaming rates are so low that the majority of musicians and small labels can't earn a living wage. Your stats / followers on Spotify determines whether you can secure a concert in many cities. That means that the labels or artists are often paying more for ads and promotion to Spotify than they are making from the streaming sales. Rarely does the creator or producer recoup the cost of recording let alone the marketing unless you're one of the darlings of pop music.
But it gets worse for the artists and small labels who specialize in niche genres like classical, jazz, new age, folk and other non mainstream niches. More and more common is that the distributors are not paying out streams on music that has been streamed. Wait a minute... what does that mean? Are the streaming services not reporting the streams? Or are the distributors not reporting the money they have been paid from the streaming services in order to keep their valuations higher? It's complicated for distributors, no doubt, when you're receiving spreadsheets from 200 or more services all with different reporting methods.... but sorry, when you're planning to sell your company for billions and it's at the artist's expense - well, that's not cool.
We started asking questions when we noticed unusual "non reporting" of streams by our distributor. We spoke to other indie labels with different distributors and we're noticing many of the same issues - too numerous to mention here. We don't think it's getting better. It's a black hole for music, creators and music lovers. A ticking time bomb.
Is there a solution to this issue?
In 2008 when we launched our first 9624 WAV file store, we saw the problem immediately. There was no true way to track files once they were downloaded unless you could encode the file with a tracking device. We went so far as to hire someone to create something we called "TraxTracks". Blockchain didn't exist back then that we knew about and we were way too early for this concept that we had before Spotify took over.
Why should we trust that Apple, Spotify or youtube is actually reporting the true numbers? What system existed that could reliably report the ACTUAL streams or downloads? Recorded music at it's best is a "loss leader" for most companies to sell something else whether iPhones, ads or a movie or game.
NFTs show some promise for the future of musicians... the creators. NFTs of the future could provide a way to track each time a song is played or downloaded and pay those owners of the NFT as listed in the "smart contract". Here's a basic outline of how NFTs work.
As we're coming up to the 20th anniversary of our E.S.E. (Extended Sound Environment).. we're considering a number of ways to celebrate in 2022. Do you own any crypto? :)
Enjoy your music!