Music tokenization - how it will change the music industry and why you should care?
With the start of 2021 seeing a massive surge of mainstream media attention towards NFTs, the plateau we see currently is inevitable but at the same time it is welcome on the basis the market can now develop past the hype, in what is after all the music industries first commercially successful interaction with blockchain technology.
This leads us towards other aspects of blockchain tech like tokenization and what it can do for the creative industries and more specifically, the music industry, who’s model towards artists has badly needed an update for some time now.
Utopia Genesis Foundation is currently working on our most exciting product yet which will serve the greater music eco-system by allowing them to tokenize their work.
What is Tokenization?
Tokenization is having your assets digitally represented on the blockchain via a smart contract with transactions taking place via cryptocurrencies. The assets in this case? Music copyrights. Think of it like having your album, song or catalog copyright divided into lots of small pieces that can be sold individually on a digital marketplace, like a security.
Why should you Tokenize?
With typical music industry contracts still largely considered bad deals for artists on the basis of long lock-in periods, small royalty %’s, lack of transparency and loss of copyright for an extended period, it’s not hard to see why the tokenization of music copyrights is becoming a talking point for its potential disruption towards an aspect of the music industry that badly needs a shake-up.
Tokenizing your music copyrights allows you to put any % you wish on the blockchain and sell a portion of your royalty revenue in exchange to both your fans and a whole new crypto investor category.. Smart contracts, which are small automatic programs, take care of things like authentication of copyright, payment splits and cutting out middlemen.
What are the benefits of tokenizing your music?
- By tokenizing your music, you keep 100% of the copyright and sell the percentage you wish of your royalty for example be it mechanical, performance or sync.
- You can open up your catalog from fan to institutional level investment on a global scale, right now typically if somebody wants to invest in music catalogs they need to be within a certain capital bracket as they are not open to just anybody.
- Given the nature of the blockchain you have full transparency as to what is being paid, when it comes in as well as having instant access to that information and the funds.
- Automatic splits! So if you have collaborators working on your music, everyone gets paid their share right away from a sale via what’s called a smart contract. So a smart contract is a piece of code that automates the execution of an agreement.
- Real-time transactions 24/7/365 (via smart contracts).
- Reduction of intermediaries potentially. (cutting out some of the middlemen)
- Community building with the fanbase who can invest/share in the success of your future releases.
- Rewards for the fanbase can be in terms of a % of the royalty returns or other incentives. The % being sold by the artist could be looked at as another form of merch.
- Exposure to a new type of customer as alternative investments from blockchain natives, are being sought for both their uniqueness, scarcity and creativity all rolled into one and tokenized copyrights potentially tick all those boxes.
What do you need to start?
First, you need to think of cryptocurrency not as a fad or ‘funny money” but more as the “currency of the future”.
At Utopia Genesis, we are working hard to make our own token $UOP (available on Bitfinex/Sushi), the primary crypto currency of the music industry going forward. Tokenized assets within the industry will be paid for by our token hence as our platform transactions/artist asset volumes increase, our $UOP appreciates in value.
Secondly, you need to tell us what percentage of your copyright’s royalties you own and would like to offer for collective investments.
Lastly, you need to provide us information from/about your publisher so we could take a look at your DSPs (digital service provider) to gauge the value of your copyright royalties.
Thanks to tokenization with Utopia Genesis, for the first time you will be able to take control of your copyrights whilst collecting support/financing from your fans to push the next steps of your career without signing unfair nontransparent deals or leaving the majority of your artistic legacy on the table. Your copyrights will now have a chance to behave like a stock which can appreciate in worth even when you’re not touring or in the studio.
If you want to know more, please sign up in advance to our forthcoming mailing list regarding tokenization with UGF, jump to our Discord or follow us on our other social media here.