Is streaming royalty a valuable incentive for NFT owners?

Imagine getting a residual income from your favorite songs and artists on a regular basis. Seriously, imagine that when you play that Tems song for the millionth time as you prepare to go to brunch with your girls, you get a percentage every time you run the track back. You would literally be paid to play the music you would normally listen to anyway. Sounds long term? Well, actually it is not!

Artists like Nas make it happen for their fans, and allow music lovers who buy their NFTs to receive a percentage of streaming royalties for certain songs. Basically, it sounds like a great idea to give your community a financial incentive to buy an NFT and essentially give them a piece of the pie. The artist would also have created a supermarket guide machine – if I am a fan who has invested, I will not only stream that song, I will also promote it heavily so that others stream it and I can get the maximum number of royalties for that track .

Although this idea sounds ideal from a strategy perspective, the execution and results will not really benefit the actual fans the way they think.

Now, misunderstand me right, the idea of ​​getting residual income from music you like (whatever the amount, basically) sounds good, but how much money you will receive is worth considering. Many fans do not understand how royalties work, or that the percentage the artist offers is just a cut of the small royalty percentage they themselves receive from the song. Not to mention the low percentages of streaming services, artists pay before the whole royalty collapse happens at all.

Below are the approximate royalty percentages from the largest streaming platforms:

Apple pays artists $ 0.01 per stream.

Spotify pays artists $ 0.003 to $ 0.005 per stream.

Tidal pays artists $ 0.013 per stream.

To put this in perspective, one million streams on Spotify equals only $ 3,000 to $ 5,000, depending on the artist.

But wait! Artists must still share this $ 0.003 with record companies, producers, writers, A&Rs and everyone else involved in their songs, which means you as a fan will receive a small payment of PENNIES.

So why should your favorite artists offer this? Well, I think their hearts are in the right place – they want to give financially back to their fans who have supported them over the years, but they just did not deliver properly. They want to offer benefit and (in their minds) give their fans a piece of art and give ownership – an idea that is the core of Web3.

But, again, the execution is not right, and therefore it is important to hire the best people to carry out their projects. But that’s a different story for another day.

Another issue that needs to be discussed is how artists are affected by the power outage – think seriously about whether your income was based solely on the current payment scheme. Welcome to be a musician in 2022.

After all the work you put into making music, marketing, campaigns and more, do you just get a penny for all this? AND you are expected to pay back the label with interest from these funds? Am I the only one who sees the problem? This is why so many artists live off borrowed money (from the label) and go broke. Many people rely solely on streaming, but the only way to make real money is to tour and sell goods. How long will your body allow you to tour each year?

Wondering why people stay in Las Vegas? Wondering why your favorites are on tour for nine months of the year? Are you wondering why some artists still do club appearances after a certain age? Wondering why some of our favorites have to tour until they are 75? Because they do NOT HAVE A CHOICE.

That is why many musicians have switched to the “influencer” track through brand agreements and partnerships – for a more sustainable way to raise money. I know what you’re thinking: “Well, why do artists have to do all that to get paid a decent salary?” I totally agree, this is where Web3 comes in as the solution if used properly.

Blockchain technology enables artists to not only own their music, but to use their brands and communities to earn a REAL life without having to get rid of their lives.

Artists are able to sell their music and / or music video as NFTs at any price they deem appropriate, and they are able to get a percentage of sales (usually 10-20%) of that music in the years to come . Sounds a lot better than those power percentages, right? Why do not all artists do this? Well, there are some reasons. Music NFTs are very new, and many artists are not familiar with how the technology works or how to get started at all. In addition, record contracts require artists to produce music, and music NFTs do not fit into that framework. Finally, NFT music sales do not count for charts or prices (yet).

Now, the only option artists have is to sell your music as an NFT. You can use NFTs to give fans exclusive content, experiences and access. You will essentially make money on your brand without having to share it with your label or anyone else.

This is the route I think Web2 artists should start with. Instead of promising your fans a percentage of royalties, offer them something they really want – MORE ACCESS TO YOU! This way you can take full advantage of your NFT collection without having a million hands in the pot AND give your fans something they really want.