For a lot of people, who are attached to the current buzz around NFTs, the default response was excitement. But finicky listeners were more concerned with an immediate question, ‘What would the value of MI Abaga’s album as an NFT and what would be the incentive for owning this asset?’
See, NFTs stand for non-fungible tokens that are hosted on a blockchain. Unlike cryptocurrencies, NFTs possess a unique identifier that can’t be marred by multiplicity. To clarify; a dollar is fungible and so is bitcoin – to some extent. Anything can be an NFT; tweets, music, video, pictures… Just name it.
You can transfer a bitcoin and replace it with another bitcoin, but the moment you transfer an NFT, the best an original owner can get is the ‘paper trail’ of ownership. The ownership is wholly transferred and that particular NFT is gone.
While NFTs and the art world are both driven by the concept of human vanity, the blockchain puts a certainty on NFTs. The history of ownership of an NFT can be traced to its original creator, who also makes money from not just the direct sale, but from subsequent sales of the same FT.
Equally, the blockchain is a healthy determinant of NFT value over a period of time while the value of art is mostly speculative and sometimes driven by competitive auction.
What Abaga proposes with his upcoming album has already been achieved. On March 3, 2021, American band, Kings of Leon announced that their new album, When You See Yourself would be sold as an NFT.
On March 9, 2021, Billboard reported that, “Kings of Leon made a splash last week with the announcement of “NFT Yourself,” a collection of non-fungible tokens the band put up for sale through blockchain technology company YellowHeart alongside the release of the band’s new album ‘When You See Yourself’ as an NFT.
“Since the sale kicked off on Friday at 12 p.m. EST, it has generated upwards of $2 million, a representative for Kings of Leon confirms, including more than $500,000 donated to Live Nation’s Crew Nation fund to support live music crews during the pandemic.
“That’s after the band extended the auction portion of the sale by 24 hours to 8 p.m. Monday, after some listings fell short from initial expectations.”
The attraction of NFTs to the Nigerian entertainment industry
Streaming platforms [both video and audio] democratized entertainment industries worldwide, shelved piracy and revenue hemorrhaging in global entertainment while they also offered a unique model of revenue generation to artists.
During the lockdown in 2020, companies like Facebook, Bytedance, Netflix, YouTube and Spotify were some of the biggest winners from the immobility of people. Their respective monthly active users soared and so did their revenue potential.
The lockdown also offered insights into why the future would be creator-centric. Over the past few months alone, big tech has honed onto global entertainment.
TikTok continues to have a stranglehold on influencing global music trends and is set to launch an A&R tool while Instagram Reels and the newly announced Facebook BARS look to disrupt TikTok’s flow. Views on Facebook Watch on Billboard while YouTube is set to launch shorts.
All of them are vying for the creator’s attention because streaming platforms operate a pro rata revenue sharing model that doesn’t favour smaller or niche artists. Every major tech platform is now trying to create unique revenue generation alternatives or promotional tools for creators/artists.
This is where NFTs could incredibly impact entertainment-related content and the creative community. As noted earlier, blockchain makes it possible for original creators of NFTs to benefit from subsequent sales of NFTs. The possibilities are endless and some are;
1.) Direct monetization of entertainment content
The best thing about NFTs is that the middle men are cut out and anybody with an internet connection, anywhere in the world can access an NFT, with the right programming.
One day, Burna Boy could start releasing his albums as NFT without needing major labels. He can then own the whole cash from the use of his music on FIFA 40.
In an ideal world where MI Abaga’s album was worth a lot of money, he could auction his album off to the highest bidder for a lot of money.
It would also be an interesting way to leverage stan culture and the current music industry practice of bundling through major incentives to the highest bidder.
In movies, Tunde Kelani could sell Saworoide as an NFT to the highest bidder and still make more money when that highest bidder subsequently sells it.
In the current world, the artist only makes money from the first sale of their music and from samples. Imagine a world where Osagie Alonge’s 500-album strong stash of collector’s item CDs were NFTs and he wanted to resell them?
The original creators would still make money off those CDs.
2.) Blockchain-based streaming platforms
Jesse Walden seems to agree. A few days ago, he told Sonal Choski on the A16z podcast that, “It’s important to contrast the way NFTs work to the way traditional web works. With social media works, when you share a file, you upload the file, but what’s actually happening is that you’re copy-pasting ownership of the file to the [social] platform due to the terms or service you signed, to monetize as they see fit…
“[Social platforms] also get to make the call on a lot of innovation going on there because any developer who tries to innovate has been shut down in the past. Contrast that to NFTs… If you’re uploading a file to the blockchain to become NFTs and they behave like other crypto assets, that means they are permissionlessly accessible to anyone, anywhere with an internet connection.
“The implication is that any third-party developer can then innovate on the way that media is consumed, how the audience sees and how people interact with it or program it. One way to look at NFTs is that we’re building this universal, open media library on top of which any developer can build the next Spotify, Instagram or the next Facebook.
“When there’s a lot more competition, there’s gonna be a lot more benefit to consumers and creators as well because all these can happen without the traditional middle men.”
More interestingly, the system of an NFT could abridge music industry practices like streaming and democratize creative industries even further. Imagine a world where 10 artists come together to create a blockchain-based streaming endeavour for their NFT-albums?
Streaming is already proving to be too problematic as the current frontier of music consumption on a global scale, and it’s unlikely to be the final frontier of music consumption because it’s slightly expensive and it offers most artists little revenue.
Blockchain-based NFTs platform could be the home for the next Spotify or Netflix. It’s a safer mode of revenue generation for the artist in a world that’s gradually moving towards a creator-centric reality.
A few days ago, Gucci started selling $12 NFT sneakers. Guess what, people bought them to show off on the gram. That proves that people would buy attractive commodities that offer the idea of uniqueness. But more importantly, offers unique opportunities into marketing of entertainment content.
Imagine a world where Wizkid sold tickets to his next album as an NFT for a higher price and with incentives like exclusive access to the backstage and dressing rooms? Imagine how effective that could be as part of an album roll-out?
Imagine what it could be like if Burna Boy, as an influencer, could market his NFT monetization viability to a suitor like Nigerian Breweries and make money endorsement/image rights money.
To the entertainment industry, NFTs would just be an aggregator of existent marketing and revenue generation models and increase their potency as part of a unit.
There is also the angle of total disruption for how social media works. Imagine what could happen if Burna Boy releases his next album as an NFT
It’s too early for Africa
Sadly, it’s too early for Africa. Internet penetration might have increased to around 63% in 2020, but we’re still some way off the global standards. Global literacy standards are also still low across Africa while poverty is still high.
Streaming platforms are finding it hard to truly convert freemium monthly active users into premium MAUs. It might take a while before NFTs catch up as a whole industry. However, the potential is hugely exciting.