This article originally appeared on Music Business Worldwide.
Non-fungible tokens (NFTs) are all the rage in the music industry right now.
DJs like 3LAU and Steve Aoki have sold theirs for seven-figure sums. Kings Of Leon just racked up around $2 million selling them bundled with their new album. And, ever the auteur, Grimes recently sold a bunch of NFT-affiliated artwork for around $6 million in just 20 minutes.
The dirty little secret of these types of transactions? People are buying unique digital collectibles – but they typically aren’t buying underlying copyrights. And considering most digital art (including music) can be easily replicated with a swipe of an iPhone, questions are getting louder over the uniqueness of the assets those splashing large sums on NFTs are actually securing.
As Pitchfork described it earlier this month: “Born out of the visual art world, NFTs create a sense of scarcity that’s inherently artificial – the token is rare, not the artwork itself.”
That all may be about to change.
Bluebox is a suite of blockchain-based tools launched by distribution and services company Ditto Music.
Bluebox uses the blockchain to record full or fractional ownership of recorded music and/or publishing copyrights, and splits royalty payments accordingly. Ditto believes the platform will lead to “higher collection rates [while] massively reducing the loss of earnings currently experienced by artists”.
NFTs are the final piece of this puzzle. This Thursday (March 18), UK artist Big Zuu is selling 75% of the rights to a song on his forthcoming album, divided up into several different chunks and wrapped up into NFTs.
Another Ditto-affiliated act, Taylor Bennett – brother of Chancelor ‘Chance The Rapper’ Bennett – is selling 75% of the rights to one of his upcoming recordings, also through separate NFTs.
Both artists are holding on to 25% of their respective copyrights.
According to Ditto Music co-founder and CEO, Lee Parsons, where this gets interesting is after these NFT sales have been completed. Because it means multiple people will be able to automatically collect digital royalties from their share of this music, via Bluebox.
“This year Bluebox is launching both a copyright exchange and an IRO ‘initial release offering’ platform,” he explains. “Similar to sites like Polkastarter or Coinlist – where blockchain projects harness power of community to fund initial offerings – Bluebox IRO will let artists pre-sell music to a community who will then be able to own a piece of their art, as an NFT.”
For shrewd collectors, this creates the opportunity to buy “shares” in an artist’s work before it’s even been released – also creating an alternative source of funding for the artists themselves.
Read the full article on Music Business Worldwide.