October 12, 2021, 7:00 AM EDT
“My assumption is any artist who chooses to get paid in crypto will understand,” he said. “The yield can be beneficial.”UnitedMasters, a U.S. music distributor, will allow artists to get paid in cryptocurrencies from Coinbase, the companies said Tuesday, giving a boost to digital currencies as a means of conducting routine business.
Musicians who distribute music through UnitedMasters can select how much of their royalties they want to receive in cryptocurrencies, and which coin they want to use, the companies said. UnitedMasters doesn’t need to hold onto any cryptocurrencies itself.
UnitedMasters, which has raised money from Apple Inc., Alphabet Inc. and Andreessen Horowitz, is one of the first in the industry to offer the service to its artists.
UnitedMasters founder Steve Stoute
Photographer: Jesse Grant/Getty ImagesUnitedMasters has tried to differentiate itself from other music distributors by offering artists ownership of their music — and 100% of royalties in some cases. It just wants them to use its tools and services. Founder Steve Stoute, a longtime record executive, founded the company in 2017.
Stoute will no doubt use the deal as a way to market his company to artists interested in cryptocurrencies. Dozens of musicians have accepted cryptocurrency in exchange for nonfungible tokens, or NFTs. Grimes, a Canadian musician, sold digital art and Shawn Mendes sold digital wearables.
Paying artists in a volatile currency comes with risk. Artists may blame the UnitedMasters if the value of their royalties plummets because of a crash in a particular currency. But Stoute argued that any artist who wants to get paid in digital currencies is aware of the risk.
Trying to understand cryptocurrency and non-fungible tokens (NFTs) can be annoying AF, but the amount of cash being made and spent in the crypto space can’t be ignored. Artists and musicians have been independently making millions of dollars by selling digital versions of their art, music, video clips, photos and pretty much any other kind of digital media they can think to throw up on the blockchain.
In February, DJ and music producer 3LAU made $11.6 million selling music NFTs in only 24 hours. Just a few days later, Canadian musician Grimes made $5.8 million in 20 minutes. DJ Steve Aoki made $4.2 million in the first week of March, while Post Malone auctioned off an NFT to play beer bong against him. Those types of paydays might've normally taken the artists years to collect, but NFTs have created a new model for artists to reach consumers by avoiding middlemen in distribution.
In the music world, an NFT could be defined as a rare collectible that is stored on a digital ledger. Artists and musicians can create NFTs themselves to auction off various forms of digital media to their fans who pay using cryptocurrencies like Bitcoin, Ethereum and others. They could add multiple buyers to the NFT or make it so there is only one owner. The artist can also receive royalties every time a buyer of that digital copy sells it to somebody else. This puts a lot of power back in the hands of artists who now have another way to monetize their art or other forms of digital merchandise.
NFTs could have a huge effect on streaming platforms that simply don’t earn artists enough. We could see an era when artists are able to do business directly with music retailers and sell their NFTs like they used to with self-produced CDs. Keite Young from Medicine Man Revival says this is just the start of cryptocurrency and the concept of blockchain technology being utilized in the creative space.
Young says he plans to release an NFT in the next 90 days, in a series called End of the Tunnel.
“It’s a performance series that is curated into an installation,” Young says. “It happens at different venues and it’s not open to the public.”
Fans will be able to purchase a digital copy of the installation as an NFT. (The digital works sold as NFTs can still be copied and shared themselves, but ownership of a token is unique. Think of it as something like a copy of a popular book autographed by the author; there are lots of copies of the book and more can easily be made, but the NFT version is one of kind.)
Young says his company Culture Factory has been working to help others build their own NFT platforms. Young says Culture Factory wants to be "the concierge" to the web 3.0 experience. He says he has the time, skillset and knowledge to engage the NFT community and develop product-to-market strategies consistent with the values of the community.
“NFTs will give artists another outlet to create exclusive content for fans in a more artistic fashion. In the future we’ll see the value of songs appreciate, like Basquiat paintings.” – Dallas rapper Rakim-Al Jabbaar
John Patillo, CEO of Southwest Digital, a Houston-based music distribution company, says they will add an NFT component onto their platform. He raises the point that artists such as Snoop Dogg and Post Malone sell 6 to 7 figures in digital assets and believes that artists in the Southern hip-hop market can see similar financial success.
“We are treating our distribution layout almost like a Walmart or Amazon in a digital space,” Patillo says. “For example, we have NFTs coming from Nipsey Hussle, DJ Screw and NFTs from some of the iconic guys here in the South. And not only are we going to let them live on our NFT platform or collectible storefront but we also are going to create these NFT collectible galleries.”
This will be a physical place where fans could go see the digital assets, leading up to the final countdown of the auction. Patillo says his company educates artists on how they can navigate this new digital space of crypto currency, NFTs and blockchain technology.
Every artist isn’t going to make $5 million in 20 minutes, but independent artists could find creative ways to use NFTs to connect more directly with fans and drive their careers forward. All it takes is one super-fan to completely change an artist’s situation. If somebody feels like digital ownership of your next project or backstage experience is worth 20 to 50 thousand dollars, then let them buy it. Instead of just posting it on YouTube or Spotify for a percentage of what the artist might think their work is worth, they could see a sizeable payday as people find greater value in digital assets.
As the NFT wave gains momentum, we will see more creative ways artists for artists to capitalize on NFTs.
Dallas rapper Rakim-Al Jabbaar says NFTs will change the rap game forever and he is working on a special NFT release with his upcoming album.
“NFTs will give artists another outlet to create exclusive content for fans in a more artistic fashion,” Al-Jabbaar says. “In the future we’ll see the value of songs appreciate, like Basquiat paintings.”
UPDATE: Based on information provided by Pollstar, a previous version of this article stated that the North American concert industry lost more than $30 billion in 2020 — Pollstar later corrected that statistic to be the global concert industry.
The global live events industry lost more than $30 billion in 2020 due to the global pandemic, including $9.7 billion at the box office, according to the year-end report by live-entertainment industry trade publication Pollstar.
At the top of the year, the industry was projected to hit a record-setting $12.2 billion at the box office in 2020, but instead incurred $9.7 billion in Boxoffice losses after the industry effectively shut down completely in March.
The projected $30+ billion figure includes unreported events, ancillary revenues, including sponsorships, ticketing, concessions, merch, transportation, restaurants, hotels, and other economic activity tied to the live events, according to the report.
Additionally, these calculations took into consideration the losses among the 147,000 live businesses featured in Pollstar’s directories as well industry studies, which included 2018’s PricewaterhouseCoopers’ Global Entertainment and Media Outlook 2018-2022 report and The 2017 Arts and Cultural Economic Activity study undertaken by the Bureau of Economic Analysis and the National Endowment for the Arts.
“It’s been an extraordinarily difficult year for the events industry, which has been disproportionately impacted by the Coronavirus. As painful as it is to chronicle the adversity and loss our industry and many of our colleagues faced, we understand it is a critical undertaking towards facilitating our recovery, which is thankfully on the horizon,” said Ray Waddell, president of Oak View Group’s Media & Conferences Division, which oversees Pollstar and sister publication VenuesNow. “With vaccines, better testing, new safety and sanitization protocols, smart ticketing and other innovations, the live industry will be ramping up in the coming months, and we’re sure that at this time next year we’ll have a very different story to tell.”
You can read the full report here.
Elton John’s “Farewell Yellow Brick Road Tour” was the year’s tour tour with $87.1 million grossed between Nov. 30- through March 7; it was No. 2 on 2019’s tally with $212 million grossed. Rounding out the top 10 are Celine Dion, Trans-Siberian Orchestra, U2, Queen + Adam Lambert, Post Malone, Eagles, Jonas Brothers, Dead & Company, and Andrea Bocelli.
The $30+ billion in projected losses is derived from the 10.92% year-over-year growth rate tabulated in Q1, the last full quarter before the Pandemic. The $9.7 billion in Pollstar Boxoffice losses represents an increase over the $8.9 billion projected in Q1 as losses grew substantially after the quarter’s end.