The more I read and hear about NFTs the more sense it makes to me for artists to get in on the act and find a new way to broaden their revenues (here’s how artists can go about creating and selling an NFT). But what about the buyer’s perspective? Why should they get in on it too? Is it about having a collectible, a one-of-a-kind? Is it just about supporting a specific artist? Or, is it an investment? Moreover, and this is the focus of this article, what’s the potential for artist-fan relations in light of the functionalities and possibilities of the blockchain?
The buyer’s value
Just one month ago Bas spoke about NFTs in the context of Mike Shinoda‘s first sale. In that article he argued that buyers step into this world because they’re building a world, a metaverse. In that metaverse, we need items that will help us showcase our identities. An NFT is one way of expressing identity and there is value in that. Similarly, in her The state of music NFTs [paywall] article from 14 January, Cherie Hu argues that one way to look at the tokens is as a form of rare digital merch. This, again, relates to confirming your identity, this time as a fan. Continuing along those lines, Hu asserts in a follow up article [paywall] that we shouldn’t even be paying that much attention to the crazy bids driving the hype through auctions but on the potential of selling multiple NFTs at a fixed price point. That’s what will allow artists to tie their fans to them and open up new fan-to-artist interactions.
The buyer’s value, then, is much closer to what happens with certain membership platforms. One example is Hanging Out With Audiphiles, Jamie Lidell‘s podcast, which has a Patreon where he shares the sounds he makes for each episode. His patrons can then make music with those audiofiles. An alternative would be to mint each sound file as an NFT and in that sense give some extra ownership to those ‘superfans’. Even more exciting is when the NFT ownership provides access to more than just, in this example, the sound file. The NFT can then come with special access to the artist (kind of similar to 3Lau‘s recent auction where the highest bidder gets creative direction on a new song by the DJ).
From membership to equity
In a world where what’s called the creator, or passion, economy is growing the distance between artist and fan is shrinking at a similar pace. Livestreaming during the pandemic has provided access to artists in their private spaces and often without lights and make-up. Similarly, services like Cameo and Clubhouse allow the type of interaction between artists and fans that was often unthinkable just a few years ago. With greater access to your favorite artists through a variety of social media and the ability to support those artists directly through membership platforms the logical next step is to consider the artist as something you can have equity in. Jess Sloss from Seed Club explained this idea to Colin and Samir:
Viewed simply, this just looks like moving from paying a monthly subscription to support an artist to buying NFTs with the same result. Where this evolves, however, is when FTs come into play. Once an artists gets their own token, they can start playing around with various layers of access. Because this token represents real value – for example on the Ethereum blockchain, but there might be more potential with something like Polkadot – the investment changes. The point of a membership is that you can cancel it at any given time. Conversely, the only way to get rid of the equity you buy into an artist is by selling it. In other words, to shift it to another fan.
From equity to growing revenues together
There’s a bunch of start-ups working in what Rolling Stone dubbed ‘equity crowdfunding‘ back in 2019. The idea, roughly, is that based on future streaming royalties, fans can invest in their favorite artists to help them create new music. By investing in an NFT or, for example, a social token, the fan engages in the potential for revenue growth. Whether this is through a resale factor, which usually holds a percentage for the artist in the smart contract, or through a secondary right attached to the token (see Jacques Greene‘s publishing rights).
Besides the artist and the fan, there’s also a space here for the developer. As Bas argued in his article on NFTs, we should view the whole blockchain experience as a metaverse in itself. As artists and fans find their ways to connect within that metaverse, there’s also a lot to be gained by the developers that pave the roads that allows those connections to grow. Where these three levels find each other, is where we will see the most growth in this world. What’s more, those types of collaboration will hopefully advance mainstream adoption both for fans and artists throughout this year.
In short, NFTs are one logical next step in a world where the interaction and proximity between artist and fan respectively grows and shrinks and moves towards levels resembling collaboration.