How NFTs are revolutionizing the entertainment industry – Rolling Stone

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Technological innovation has always played a crucial role in the development of the entertainment industry. Whether it is the film and television, music or gaming sectors, the importance of technology cannot be underestimated. Every entertainment industry sector has always found a way to use the latest technologies, be it digital cameras or the internet, to achieve better results.

The rise of blockchain technology has given the entertainment industry a new opportunity to improve and redefine itself, and evidence suggests it has taken it. While blockchain technology can help the entertainment industry in several ways, in my opinion non-fungible tokens (NFTs) have the best product market for ease of adoption at the moment. Let’s look at how the trends and the future are moving towards NFTs.

The entertainment industry and its participants

NFTs are unique digital assets that can be verified on the blockchain and can represent real or digital objects. The uniqueness of NFTs makes them a good fit for the entertainment industry, where intellectual property rights are the currency. Everything in the entertainment industry revolves around creation, distribution and monetization. It takes talent to create, but NFTs can help with distribution and monetization.

For the entertainment industry as a whole, NFTs can help protect intellectual property rights. Whether it’s film, art or music, creative works are the lifeblood of the entertainment industry, so they must be protected.

Although intellectual property laws protect these IP rights, they are not as effective as they used to be. This is because technological advances have outpaced the legal framework for IP protection. The Internet and the digital age have made it easy to copy other people’s work without their permission and even make money from it. With generative AI now gaining momentum, this problem is set to worsen.

There are already efforts to protect these IP rights. But not even big companies with their big legal budgets have been able to stamp out piracy completely. For smaller and independent creators who are not affiliated with such companies, it is much more difficult to protect their work.

The key properties of NFTs – immutability, provenance and traceability – could provide a potential solution for all. Creators issuing NFTs create a record of origin and ownership, which cannot be changed. It is even possible to implement controls on the use of NFTs and track ownership forever.

In addition, NFTs can help creators with distribution and monetization. This is especially important for independent and lesser-known creators who struggle to monetize their works using traditional distribution systems. One area where this is most evident is in the music industry. The music industry is projected to make over $65 billion by 2023. But most of that money goes to record labels and the superstars who get billions of streams.

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For independent artists, the maximum $0.005 per stream on Spotify and $0.01 on Apple Music is barely enough because they need to get millions of streams to earn a significant income. By using NFTs, such artists can earn more while focusing on a smaller audience. Water & Music reported that recording artists earned $83 million from primary sales of NFTs in 2021, with 70% of revenue going to independent artists.

Other creators, such as digital artists, have also utilized NFTs extensively to protect their IP and monetize their works. In 2021, Beeple sold his Days of Our Life NFT for $69 million, the most expensive digital art ever. While not everyone has achieved this level of success, several digital artists, including places like Nigeria, have found NFTs the perfect tool to monetize their works.

Aside from independent creators, even successful artists and celebrities can use NFTs to earn extra income. They can leverage their fame to issue NFTs based on their unlicensed IP. For example, Canadian musician Grimes did this in 2021 when she released NFTs of digital artwork and earned $6 million in revenue. Popular actor William Shatner also released NFTs based on Star Trek and his personal life, which sold out within hours.

It is noteworthy that NFTs not only generate one-time income for the creators, but they can also guarantee recurring income with each sale. Most NFT smart contracts have a certain percentage as a royalty fee, and creators get this percentage on every second sale.

Meanwhile, NFTs can also be a way for creators to connect directly with fans. The traditional distribution system is heavily dependent on intermediaries. There are record companies for musicians, galleries and auction houses for artists, publishers for writers and film studios for actors. These intermediaries play a decisive role in financing and distribution, but not everyone can or wants to be subject to their control and authority.

For the creators who choose deliberate independence or cannot secure deals with the big intermediaries, NFTs can be a way for them to get funding by marketing directly to their fans. In this way, these fans can be investors in the creator’s progress with the potential to make money if the creator becomes successful. The artists also enjoy more creative independence and control over their works.

Even established creators can still use NFTs to connect with their fans or offer extra benefits as a reward for their fandom. American rock band Kings of Leon did something like this in 2021 when they released three types of NFTs; one offered a special album package, the second was exclusive audiovisual art and the third offered benefits such as lifetime front-row seats to live shows. Other musicians such as 3LAU and Snoop Dogg have released NFT compilations with similar benefits.

The trends seem to be leaning towards NFTs, so it is not surprising that NFT marketplaces such as OpenSea, Blur, SuperRare and Nifty Gateway are becoming popular places for digital art and entertainment. Specialized marketplaces such as Audius, Royal, Catalog, SoundXYZ and Opolous have also emerged for music NFTs. With NFTs, all participants in the industry, from the creators to the fans, can get something. It may take some time, but the revolution will be tokenized.