Why Indian musicians are betting on NFTs

NFTs are proving a great new way for artists to monetise their fandom and sustain their careers

Internationally, they first gained mainstream media attention in March when alternative rock band Kings of Leon released their most recent album in the form of an NFT. In India, the music industry took notice of their potential in May when Tamil singer-composer Kaber Vasuki sold an old demo recording for 50ETH, valued at around Rs 1.5 crore at the point of sale. Since then, there’s been a series of high-profile drops.

This July, the promoters of electronic music festival Sunburn hopped on to the bandwagon with its first batch of NFTs inspired by the event’s logo and stage backdrops. In August, electronic music producers Ritviz and Nucleya marked the release of their collaborative EP Baaraat, with 20 NFTs. Next, veteran Hindi rock band Euphoria put out their new album Sale as an NFT in September. Last month, hip-hop producer Sez on the Beat’s collective THE MVMNT unveiled 17 ‘moonhead’ NFTs. Today, rapper DIVINE’s long-anticipated series, created with popular illustrator Santanu Hazarika, goes up for sale.

The fans, it appears, can’t get enough of them. On the Indian NFT marketplace WazirX—which currently lists over 560 music NFTs, including those by Sunburn, Ritviz and Nucleya, and THE MVMNT—they have a “success rate” (the number of NFTs sold as a percentage of the total number listed) of 41.87 per cent. This is slightly higher than the 40.15 per cent success rate of all the NFTs available on the platform. The MVMNT’s drop sold out within 48 hours, and Ritviz and Nucleya’s series has generated the most revenue, with a combined sale value of 4,491.5WRX (approximately $5,000).

Not just music or art

An NFT released by a musician is no different than any other NFT in that it is, as Vishakha Singh, vice president at WazirX, says, “a unique digital item [that] can be art, audio, video, items in video games and other forms of creative work.” The bulk of the music-related NFTs from Indian acts have either been artworks inspired by the music or audio files. The differentiating factor is the benefits that can be packaged with and sold as NFTs, which include items and experiences such as “concert tickets, handwritten lyrics, special access to private holders-only performances, livestream interviews and shows, and limited-edition albums,” says Singh.

Both the Ritviz and Nucleya and THE MVMNT’s NFTs were bundled with perks such as free entry, backstage access, and meet-and-greets at upcoming tours. Rapper Rae Mulla, whose album lol is being brought out by “NFT-based art endeavour” white noise, will add to this mix one-on-one time with the buyer and exclusive merchandise. Chaitanya Kataria, the co-founder and CEO of DIVINE’s company Gully Gang Entertainment, says that the rapper’s NFTs will be sold with “authentic artist memorabilia and digital merchandise.”

A win-win for both fan and artist

On the surface, a music NFT might seem like a digital download with dynamic artwork, but there are some crucial differences. Here, the artist sells directly to fans instead of through third parties such as digital music stores, gets to fix their chosen price, and earns royalties from each sale and resale. Moreover, the artists reap their revenues far sooner. “We were able to raise $2,500 within three days of a new song dropping,” says Aniket Rajgarhia, senior rights manager at music services company Outdustry, to which Sez on the Beat is signed. “Whereas royalties from streaming will take six months to arrive in the artist’s pocket, the NFT sale allows them to receive funds on the day of sale and at every resale.”

Thus far, the NFTs released by independent musicians have tended to mark a significant milestone in an act’s career that they want to celebrate with their fans. For Ritviz and Nucleya, it commemorated their first joint release. For THE MVMNT, it heralded the collective’s first full-length album Chaand Paar. And for singer-songwriter Pragnya Wakhlu, it showcased the animations featured in the award-winning video for her single, Katyuchuk My Love. As such, they help artists monetise their fandom and reward their most hardcore followers with collector’s items.“NFTs enable fans to own something directly from their favourite artist, and this creates a much stronger artist-to-fan relationship,” says Singh. Notably, Kaber Vasuki’s headline-generating NFT was swept up by a collector who happened to be a long-term listener of his music, entrepreneur Vignesh Sundaresan aka MetaKovan.

An investment in artists you believe in

Kataria feels that especially for upcoming acts, NFTs can be a way for artists to share the gains with their first fans after they make it big. “Imagine coming across an artist from the early stages in their career, going to their shows, streaming their music religiously, and seeing them grow along with your fandom being rewarded? It opens up all kinds of economies."

Music NFTs, in one sense, are a more lucrative type of crowdfunding where the benefits for both funder and fundee accrue much longer than your standard Kickstarter campaign. “Where Web2 was about the transfer of information, Web3 is about the transfer of value,” says Outdustry’s Rajgarhia. THE MVMNT’s NFTs integrated one rare benefit. “From our research, [we found] owners want creative freedom to do whatever they want with the NFT. This is why we changed our offering from only usage rights to complete creative and commercial rights. We want the token holders to get creative and build something: merch, a comic strip, a new artist persona.”

Acts can also specify the uses they’re granting. “[For] example, an artist can permit the buyer to use the artwork to sell merchandise, which allows them to monetise the purchase while also boosting the artist’s outreach,” says Parth Taco, one of the co-founders of white noise. While we’ve yet to see it in India, internationally, artists have been selling a share of future royalties from their songs as NFTs.

Getting through FUD-dy Duddys

As with all things related to cryptocurrency, there’s a general lack of education and awareness about the legalities and taxation involved in the trade of NFTs, a situation that has only been made worse by the central government’s recent announcement regarding the Cryptocurrency and Regulation of Official Digital Currency Bill currently being tabled at the winter session of the Parliament. But fear, uncertainty and doubt, also known colloquially as FUD, is par for the course, says Taco. It’s “just the nature of this beast,” he says. “Volatile market aside, we’re here for the technology and what it holds for the future.”

A more immediate challenge, says Rajgarhia, is figuring out how to make transacting more efficient. Currently, buying an NFT on WazirX involves two exchanges, three currencies and at least seven steps. The future health of the market, he says, depends on several factors such as “reduced friction in the buying process, safety for buyers, good quality information and interoperability to sell NFTs on multiple marketplaces.” For now, forward-thinking musicians and music entrepreneurs are keeping a close eye on developments while simultaneously planning their next big release. “It’s not even hit one per cent of its potential yet,” says Kataria.

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