NFTs enable major shifts in the music industry, which could lead to new investment opportunities for clients of financial advisors, as DJ Windle writes today.
Also in today’s newsletter, Toby Bochan and CoinDesk Bot explain how NFTs are still generating billions of dollars in trading volume in 2023, even though the market for the digital assets has cooled from the frenzy that marked 2021.
NFTs, which are unique digital assets that are verified on a blockchain network, have opened up endless possibilities for the music industry and for investment.
Unique ownership: The most significant advantage of NFTs in the music industry is the ability to grant unique ownership of digital content. With NFTs, artists can issue limited edition digital albums that have unique ownership and can be sold for a premium price. This enables fans to own exclusive digital content and gives artists an additional revenue stream. As a result, musicians may start to produce music that is more geared towards creating one-of-a-kind pieces that fans will want to own and collect.
Royalty payments: The traditional music industry model has seen artists receive a small portion of the revenue generated from music sales. However, with NFTs, the ownership of music is made clear on a blockchain network, allowing for transparent royalty payments. This means that artists can receive a larger portion of revenue generated from music sales, which in turn will result in a change in the way music albums are published. Artists may choose to release music albums through NFTs to ensure that they receive a fair share of the revenue generated from music sales.
Tokenization of music: NFTs enable the tokenization of music, which means that the music can be divided into smaller, more manageable parts. This enables artists to monetize specific parts of their music, such as the rights to use a specific beat, the lyrics of a song, or even a single guitar riff. This means that artists can sell their music in smaller parts, which can be more accessible to fans.
Investing in NFTs that represent ownership of music albums can provide clients with exposure to a unique asset class that is not correlated with traditional investments. This can help to diversify their investment portfolios and reduce risk.
Financial advisors can work with their clients to identify high-quality music albums that are likely to appreciate in value and generate potential revenue streams.
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Disclaimer: The information contained in this newsletter, and any information linked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. You should seek additional information regarding the merits and risks of investing in any cryptocurrency or digital assets.
