COVID-19 Triggered Music Market Crisis... Can Virtual Asset NFTs Revive It?

Mass Concert Cancellations Due to COVID-19... Sharp Revenue Decline
Musicians Maximize Profits by Releasing NFT Music
WSJ "Need to Enhance Public Accessibility Through Price Rationalization"

Electronic dance music (EDM) musician Deadmau5 earned over 200 million won by selling digital souvenirs using non-fungible tokens (NFT), a virtual asset technology.
[Image source=Wikipedia]

[Asia Economy Reporter Kim Suhwan] Electronic dance music (EDM) artist Justin Blau, known by his stage name 3LAU, earned $17 million (approximately 19.3 billion KRW) last month solely from music sales. All the sold tracks applied the technology of ‘NFT’ (Non-Fungible Token), a type of digital asset. He was able to generate $11.6 million in revenue from his NFT album "Ultraviolet" alone. Blau stated, “NFT technology will change the world,” adding, “It offers musicians an opportunity to generate income in a completely different way from traditional methods.”

As on-site concerts were largely canceled due to the COVID-19 pandemic, musicians worldwide have suffered financial losses, and NFTs are emerging as a new source of income for them. Consequently, NFT technology, which had been limited to collectibles and artwork trading, is now being integrated into the mainstream music world, triggered by the COVID-19 pandemic.

NFTs are digital assets that apply blockchain technology like Bitcoin, assigning unique identification values to various digital products such as paintings, tweets, videos, and images. This allows individuals to hold ownership of digital products with unique numbers.

In particular, NFTs grant digital assets ownership, creating scarcity. Although digital assets can be copied and shared by anyone, ownership cannot be duplicated. For example, taking a photo of the Mona Lisa does not mean owning the original painting. When NFT assets are traded, ownership is transferred as well. This scarcity attribute is why NFTs are highly valued.

Additionally, for NFT music tracks, the copyright remains with the musician, which is an advantage from the creator’s perspective. Unlike other NFT assets, ownership is not fully transferred. Thus, musicians can protect their copyrights while earning high revenue from releases.

Accordingly, the release of NFT-format music tracks is increasing among musicians recently. According to research analyzed by music market expert Cherry Hu, the revenue earned by musicians from NFT-related asset sales reached $42.5 million (approximately 48.2 billion KRW) from June last year to January this year.

Pop singer Grimes [Image source=Wikipedia]

Last year, famous EDM musician Deadmau5 sold self-produced memorabilia such as stickers and cards in NFT form, earning over $180,000 (about 200 million KRW). Earlier this month, the dance music duo Disclosure released NFT music tracks, selling each for $69,000 (about 78 million KRW). Various musicians, including singer-songwriter Shawn Mendes and pop singer Grimes, who is also known as the partner of Tesla CEO Elon Musk, have joined this NFT memorabilia sales craze.

However, there has been criticism that the high prices of most NFT assets limit accessibility. Furthermore, since most NFT assets can only be traded with Bitcoin, only some asset holders who own Bitcoin can participate in transactions. The Wall Street Journal (WSJ) reported, “Most assets applying the still nascent NFT technology are priced high,” adding, “The current music market hopes these prices will drop to reasonable levels so that the majority of fans can access them.”

In response, some are making efforts to rationalize prices and promote the popularization of NFT music tracks. Stellwagen Ventures is currently developing a platform where NFT music tracks can be traded at more reasonable prices. According to Stellwagen Ventures, they are also working on allowing NFT music purchases via credit cards to improve accessibility. Charles Goldstuck, co-founder of entertainment company Hitko Entertainment, which sponsors this project, said, “Our goal is to maximize opportunities to access the NFT market,” adding, “This will be an important milestone in further expanding the music ecosystem.”

This content was produced with the assistance of AI translation services.