Ever since Thomas Edison invented the phonograph in 1877, music and technology have gone together like Simon and Garfunkel, Morrissey and Marr, or the Gallagher brothers. But just like those legendary duos, the relationship between the two hasn’t always been easy.
The past two decades since the explosion of the Internet have been particularly tumultuous, with illegal file-sharing on platforms like Napster and Limewire bringing the industry to its knees in the early noughties. And while the introduction of all-you-can-eat streaming via Spotify, Apple Music et al has largely solved the problem of piracy, it hasn’t really worked out for the vast majority of musicians; just 184,500 of the 1.2 million artists on Spotify make more than $1,000 a year.
Tommy Danvers, aka TommyD, a multi-platinum-selling producer, songwriter, artist, DJ and founder of music-based NFT marketplace Token Traxx, saw that the system was broken. But he wasn’t able to find a solution until the first Covid lockdown in early 2020 prompted him to connect the dots between his love of music and a more recently acquired interest in cryptocurrencies and blockchain.
With streaming revenues so low for so many artists, and social distancing measures meaning gigs, nightclubs and festivals would be out of the question for the foreseeable future, there was an urgent need to find a way to reconnect artists with their fans and allow them to make a living from their music.
“If the value of listening to music has been eradicated by streaming, where is it?” asked TommyD. “The value is with the artists themselves and it’s with the people that find that music and support it, buy a t-shirt, go to a gig. Bring those people closer together, make the connection more direct, show value in each one’s role, and you can make a seismic change that will put pressure on the current system to become more relevant.” And that’s where Token Traxx comes in.
Back in 2008, former Wired editor Kevin Kelly claimed that the Internet would allow any creator with just 1,000 true fans to make a living—but TommyD has an updated take on the idea. “I call it 100 true partners,” he explains. “All you have to do is highlight and find 100 people that are prepared to generate $1,000 a year for you and that’s $100,000 income, which is a living wage for most people.”
For the kinds of artists that Token Traxx is targeting, those with around a million listeners a month on Spotify, that’s a very achievable target—but even selling two NFTs for $2,000 each would be completely life-changing for a struggling musician in the developing world. “I believe that there is a huge market out there for those artists that can’t get through the algorithms that subdue their music,” said TommyD. “It’s about transforming artists’ lives and taking them up to another level.”
Token Traxx isn’t the first to marry music and NFTs; musicians ranging from Kings of Leon to 3LAU have released their albums as NFTs. But co-founder Miles Leonard, a former chairman of Parlophone and Warner Bros UK who has also worked for record labels including Virgin, EMI and Roadrunner, believes treating NFTs as a product is the wrong approach. After all, what are CDs, vinyl and cassettes if not just physical NFTs? New technology needs to offer something that has never been possible before, otherwise what’s the point?
“The NFT is a club,” said Leonard. “It’s a gated space for your biggest fans. Everyone talks about 3LAU, but there are many unknown artists out there who’ve had lots of success through their NFT drops. Why? Because they’ve engaged in the crypto community and they’ve also connected with the fans of their music as well.”
Through the Traxx Token, which will be available for the first time via a Token Generation Event that’s being run by financial services company Sors on 14 March, artists will be able to easily tokenize songs, albums, and merchandise. But they’re also encouraged to have a longer-term plan for what they can offer their fans beyond simple NFT drops, whether that’s exclusive concerts, meet-and-greets at gigs, or avatars that can be used in the metaverse in the future. “If you’re just going to come in with an anonymous drop then it’s never going to work, at least not at the stage where we are in this industry,” Leonard said. “Your offering has to be continued.”
Staking is the new liking
One of the most meaningful ways of offering that is with Royalty NFTs—tokens that have a percentage of the writer’s revenue allocated to them via a smart contract and entitle the holder to a percentage of whatever the artist earns.
If a fan holds an R-NFT for a song that goes on to be a massive hit they would be financially rewarded for their loyalty and support, while the value of the token itself would also increase exponentially. It’s not hard to imagine just how valuable an R-NFT of Coldplay’s Yellow, or Everlong by the Foo Fighters, would be worth by now.
“This concept of staking being the new liking creates a completely new economic model around the life cycle and consumption of music from both the artist’s and fan’s perspective,” explains Token Traxx founder CEO Paul Taylor. “It becomes a completely unique methodology and this is why we strongly believe it’s transformational.”
While streaming has often been presented as the bad guy in discussions around the economics of the music industry, Taylor and the rest of the team are keen to point out that it has undoubtedly been good for music consumption.
Besides, Token Traxx isn’t trying to replace Spotify, Tidal or Apple Music. What the company offers is an additional revenue stream alongside those that currently exist. “We’re a real-world business that offers real-world rewards for the collectors, for the curators, and for the creators,” said Taylor. “And if Spotify was starting now, they’d be doing what we’re doing.”
Sponsored post by Token Traxx
This sponsored article was created by Decrypt Studio. Learn More about partnering with Decrypt Studio.
Want to be a crypto expert? Get the best of Decrypt straight to your inbox.
Get the biggest crypto news stories + weekly roundups and more!