Some of us are old enough to remember “The King,” Elvis Presley, who was considered a “crossover” hit because he blended rhythm & blues into rockabilly and then rock and roll. Others of a younger ilk will remember Taylor Swift’s famous “crossover” from country to pop. Well, just like that, digital assets have now just crossed over into music. The DAT, or Digital Asset Token, has “crossed over” to a NFT…….Non Fungible Token……. and is beginning to shake up the music world.
Because the NFT is relatively new it can be a bit complicated to understand (at least for me) so let’s step back to take a quick look at what they actually are.
NFTs are a type of cryptocurrency, but instead of holding money, they can hold assets like art, tickets, and music. NFTs operate on a blockchain, which is a publicly accessible and transparent network — meaning anyone can see the details of any NFT transaction. Computers involved in the transactions become part of the network, which keeps updating and can’t be hacked due its nature as a “many-headed hydra”. In the case of NFTs, their value becomes subjective and therefore fluctuates, similar to stocks.
So when did this DAT to NFT “crossover” jump into the music mainstream? Turns out, just last week when the rock band Kings of Leon released their latest album (fyi, they have been around for about 20 years) in the form of a (you guessed it) NFT, becoming the first band to ever do so. These NFT’s, having been more or less underground for a while with a following by DJs and music producers seeking out possible new revenue streams, never hit the “big time”………. until now. Go Kings of Leon. Other artists like Portugal. The Man (yeah, that’s the name of a rock band) and Grimes (uh, just in case you don’t know—I actually did—- Grimes is Mrs. Elon Musk) have recently jumped on the crypto/NFT bandwagon of late via other projects.
Now, stepping back about a year and a half, several music industry executives along with Grammy Award-winning artist/producer duo The Chainsmokers, launched YellowHeart, the first socially responsible live event ticketing platform. The YellowHeart platform is autonomous, fully decentralized and runs on a public Blockchain – which enables artists to identify, market and sell directly to their fans. Artists can define a set of rules to govern how their tickets are sold, traded and who shares in the profits. Artists can set maximum resale prices, ensure tickets are distributed to genuine fans (not scalpers) and elect to earn a share of the profits from tickets resold in YellowHeart’s secondary marketplace. Enter the NFT.
But back to last week. The launch of Kings of Leon’s new album (“When You See Yourself”…..not plugging and certainly not getting any $$) via a NFT is brilliant. Each token has a smart contract that can include (depending on the token) not only the album but other “perks” as well. Think guaranteed front row seats to the band’s concerts, limited-edition vinyl, etc. which….ta da…….creates value for that token. With Yellowheart’s platform it should be an easy next step to offer a secondary marketplace for those tokens too. The Kings of Leon may have just opened the floodgates to a whole new investment vehicle. Will we start to see ETF’s investing in NFT’s? Probably, as soon as YellowHeart creates more tokens.
Oh, as an FYI, The Chainsmokers (via their venture fund) also invested in Public…………a very formidable competitor to Robinhood in the stock trading space. Pretty sure they also had a hand in creating the super fun Michael Bolton song spoofing the problem plagued Robinhood and featured on Digital Wealth News in last week’s Dwealth Muse podcast (Episode 2 – Gamestopped by Congress). Give a listen.