In 2021 the music industry had $15 billion in revenue, with only an estimated 12% going to the artists themselves. Record labels have historically taken advantage of artists by ensuring they are left unaware of alternative options when signing record deals. With the rise of TikTok and its ability to create overnight stars, some record labels even go as far as signing a specific single without additional promises about future releases to limit their risk, while putting pressure on the upcoming artists to maintain a presence amongst their online fans.
In the music industry, NFTs on Solana can disrupt the traditional business model by allowing musicians to sell their music directly to fans without the need for intermediaries such as record labels or streaming services. Some ways that NFTs on Solana can disrupt the music industry include:
- Ownership and Royalties: NFTs on Solana can allow musicians to sell ownership of their music directly to fans. This means that fans can buy a unique NFT that represents ownership of a specific song or album, giving them exclusive rights to the music. Musicians can also program royalties into the NFT, allowing them to receive a percentage of future sales every time the NFT is resold.
- Fan Engagement: NFTs on Solana can create new ways for musicians to engage with their fans. Musicians can sell unique experiences, such as backstage passes, meet-and-greets, or exclusive merchandise, as NFTs. Fans can also trade these experiences with each other, creating a secondary market for unique fan experiences.
- Crowdfunding: NFTs on Solana can be used for crowdfunding new music projects. Musicians can create NFTs that represent ownership of a new album or a music video, allowing fans to support the project in advance. This can help musicians to fund their projects without the need for record labels or other intermediaries.
- Authenticity and Rarity: NFTs on Solana can help to establish authenticity and rarity in the music industry. Musicians can create unique NFTs that represent rare or limited-edition releases, creating value for collectors and fans.
Enter Lonely Listeners Club
Solana-based project Lonely Listeners Club (LLC) is looking to tackle the revolutionary potential NFTs have within the music industry. Comprised of an exclusive club of music fans and web3/retail investors, LLC is looking to build a more prosperous music business.
Owning an LLC gives access to the Listeners Lounge DAO/platform where members are able to vote on artists for the Sol Music Ltd platform, granting them first access to investing in upcoming artists. Sol Music Ltd acts as a parent company to LLC and looks to generate significant revenue through a high volume of curated artists; where a portion of the revenue gets reinvested back into LLC.
"NFTs should play a role in every artist's market mix for reasons far beyond monetary value. The music NFT community at large is a very inviting place, and artists will be eager to find that the ability to foster & scale a community provides way more value to their music career outside of a simple NFT sale," said Matt, the founder of Sol Music Ltd.
By utilizing a launchpad for new music, the platform can act as an alternative option for artists looking to raise money outside of a potentially bad deal from record labels. To bring value to collections released through the launchpad, the collections will have utility tied to the artists in the long run. They can feature royalty share in the music, as well as lifelong perks such as merch or access to concerts.
Matt continued to add that, "the ability to seamlessly add blockchain technology into their marketing mix (without even noticing it on the front end) can work magic for musicians trying to protect their web2 brand. This product is for the industry- it'll give artists the chance to tip their toes into web3 and see it yield results on web2."
According to their whitepaper, the goal of Sol Music is not to replace traditional record labels, but rather to help prepare artists before signing a deal. As well, it will enable artists to curate a community incentivized to promote their music. If artist popularity grows, then the value of the NFTs and their perks could too.
Overall, NFTs have the potential to disrupt traditional record labels by providing artists with new ways to monetize their music and engage with fans directly. However, it remains to be seen how quickly and widely NFTs will be adopted in the music industry and whether they will live up to their revolutionary potential.