At First, I was Sceptical. But NFTs Can Provide a Bright Future for Artists and Creators

After weeks spent researching, I can pinpoint the exact moment where the penny dropped for me regarding NFTs. An acquaintance of mine created 33 of them for an album he had made, and put them up for auction. There were a few other goodies thrown in, such as all-access backstage passes for a tour, but I don’t think he could have truly expected the final price it all sold for - which was a little over USD$12 million. I’d love to tell you what happened next, but he stopped returning my calls the next day! 

That’s an extreme example, but my friend’s story could be any artist’s story. He is a good musician, sure, but there are so many good musicians out there. Why shouldn't they all benefit from this technology? 

Get With the Phonogram

Ever since I got stuck in my apartment due to the pandemic, I’ve been studying the world of blockchain. That inspired me to co-found Phonogram.me, the first ever NFT-based marketplace for Brazilian music. I truly believe that our model can democratise the music industry, here in Brazil and beyond. 

There are some who argue that NFTs could be a way for unscrupulous individuals to exploit young artists. Their concern is understandable - what if an experienced collector bought a music track for 10 dollars, and sold it a few years later - when the artist is more famous - for a potentially crazy profit while the artist receives nothing? On Phonogram.me, however, you can build a clause into your NFT contract that states, for example, the original artist is entitled to 10% of all future sales of that NFT. So every time it is sold on, or every time a radio station has to pay royalties for playing the track, the artist profits. It’s a healthy, long-term model that can also help young artists today.

Make no mistake, there are many people in the industry who are waking up to the potential of NFTs. Record labels have been reaching out to us to set up a working relationship. This is great news for artists and owners of NFTs, as it means that when the record label pays us for using a track, there is an automated system to ensure that money goes to the NFT owners. 

My hope is that artists who might otherwise have slipped through the cracks will be able to use Phonogram.me in order to establish a viable career in music. Beyond that, though, I believe that we are part of a movement which will set a new culture in our industry. Better yet, that culture will have the wellbeing and interests of artists and creators at its heart. 

The Future

The truth is that we are currently living through a time in which becoming a musician is more expensive than it has ever been. While the likes of Spotify and Deezer have been fantastic for the consumer, they’ve created a landscape in which a career as a musician is realistically only available to a very small number of elite artists. I believe NFTs can change that, and democratise music in such a way that everyone, from artist to consumer, can win. 

Imagine you’ve discovered a new band. You just saw them play at a local venue or on TikTok, and you’re convinced they’re going to be the next big thing. If you were to buy their music as an NFT, you’re now quite literally invested in the future of that band. When you share their work with your friends and colleagues, you’re essentially doing your own PR. When their music is eventually played on TV and radio, both you and the artist will get a share of the rewards. Their success will be your success.

At this point, you may be thinking that sounds a little too commercial to be a genuine relationship between musicians and their fans. But why is that any worse than the system we currently use? Why should it only be record labels, never fans, who profit from an artist? 

And speaking of which, what about those artists? At the moment, they are trapped in a cycle of trying to create music which will be featured in Spotify playlists, and which most listeners will skip past within three seconds. Why not embrace this opportunity to make fans their direct customers once again? 

A Better Environment

I want to address one more point about NFTs, namely their environmental impact. In researching the topic, I was able to speak with Ph.D. Courtnay Guimarães, one of the world’s most respected blockchain developers. I was concerned to see that the creation of NFT certificates can have a negative effect on the environment due to the amount of energy and heat it takes some servers to generate the digital certificate. However, Mr Guimarães explained that the problem has been blown out of proportion somewhat - of course, all digital activity generates some kind of heat from servers. 

Nonetheless, we should all do what we can to minimise and offset any environmental damage. My co-founder at Phonogram.me is the blockchain expert Guido Malato, who has been instrumental in ensuring that we use the Ethereum platform to generate NFTs. Ethereum will replace the ‘Proof of Work’ consensus algorithm - which does require lots of electricity - with ‘Proof of Stake’, an innovative approach to the consensus problem that is much more energy-efficient, and thus environmentally friendly.

The status quo needs to change. I believe that, thanks to the emergence and popularity of NFTs, we have a historic opportunity to level the playing field in the music industry and, ultimately, create a better world for artists and creators. I hope more artists follow me and Phonogram.me in taking that opportunity.