Artists Are Selling Rights to Their Songs as NFTs
- Rapper Nas has partnered with Royal, a song ownership platform, to sell royalty rights for two of his songs via NFTs.
- The two songs each have varying limited tokens, which allows each user to attain similar royalty revenue.
- As Nas is the first artist to sell his songs’ royalty through a digital platform, there is a possibility other rappers may initiate similar processes for their songs if this is a successful strategy.
Rap legend Nas announced that he has partnered with Royal, a song ownership platform, and executed an NFT drop. In the drop, consumers have the opportunity to purchase NFTs that will allow them to receive varying levels of streaming royalty rights. As this is the first time an artist has sold the rights to their song through blockchain technology, it could change how other artists try to promote and sell their music.
What is an NFT?
A non-fungible token (NFT) is a digital asset that people purchase on the Ethereum blockchain. Consumers can buy these uniquely identifiable digital items on blockchains by linking a digital wallet that has the cryptocurrency required for these digital items.
One main issue regarding NFTs is their exclusivity. Many are concerned people overpay to attain digital art, while anyone could download the videos and pictures for free. Although this is a fair argument, the reasoning behind people spending thousands of dollars on NFTs is to receive ownership of the piece of art they desire.
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For example, millions of pictures of the Mona Lisa can be acquired online by anyone. However, only one person could state they own the Mona Lisa; and the same principle applies to NFTs. Therefore, those who acquire NFTs desire to own digital artwork. The fact others could potentially use the same picture does not matter, as they could sell the NFT for a profit later.
Nas’ NFT Rollouts
Nas has initiated the NFT drop for two of his songs, “Rare” and “Ultra Black,” with different limited token amounts and tiers. These tiers vary as they each have different percentages of royalty rights.
The song “Rare” will have 1110 tokens in circulation, and these tokens will be distributed amongst the following ranks, Gold, Platinum, and Diamond. First, the Gold tier will be sold for $99, and its streaming royalty percentage will be 0.0113%. The next tier is Platinum, trading at $499, with its streaming royalty percentage being 0.0658%. Lastly, the Diamond tier is selling at $9,999, and it will have 1.5789% streaming royalty.
The song “Ultra Black” features 760 tokens in circulation, and similar to “Rare,” the tokens will be distributed amongst Gold, Platinum, and Diamond ranks. The Gold tier will be sold for $50, with a streaming royalty percentage of 0.0143%. The Platinum tier is sold at $250, with its streaming royalty percentage of 0.0857%. Lastly, the Diamond tier is sold at $4,999, and it will have 2.14% streaming royalty.
Although it is unknown how many tokens will be available in each respective tier, nor whether Nas would retain any percentage of the royalty rights, this move could become game-changing in the music industry.
Why Do People Buy NFTs?
People purchase NFTs as it gives them a certificate of authenticity over a digital item. The item’s authenticity allows them to gain complete control over the NFT.
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For example, the NFT owner could either hold the digital item in their possession for some time, and once it has risen in value, they could potentially sell it, or they could also modify it to their liking. Many people successfully sell NFTs for a profit. In the case of Nas’ royalty streaming NFT, it allows the holders to receive passive income the longer they hold onto it.
Companies Expanding into NFTs
As NFTs become increasingly popular, causing their values to rise vastly, various corporations, such as Nike and Walmart, have become intrigued and expanded their reach into the new market. In addition, more and more digital artists are also creating and launching NFTs to their followings. Furthermore, another company that could be revolutionizing the usage of NFTs in the world of sports is NBA Top Shot, a website directly affiliated with the NBA, working to introduce video clips to the digital market.
These digital files are obtained through packs, after which the consumer could either keep it for themselves or auction it on the website’s marketplace for a profit. Furthermore, as these digital clips are rising in popularity and price, it could potentially result in more sports leagues beginning to introduce their respective video highlights.
The world of technology is constantly changing, with breakthroughs happening daily. Thus, with Nas becoming the first artist to release the royalty rights to his songs through NFTs, it could potentially become a new method for artists to connect with their fans.
What are your thoughts on Nas selling royalty rights of his songs through NFTs? Do you believe other artists would follow in similar footsteps? Let us know in the comments below.
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