Music streaming

Scandinavian music streaming success loses to NFT sales

Over the past 15 years, the music industry in Scandinavia has set the tone for music sales in the digital age. After years of struggle during the 1990s with the growing threat of online piracy, the industry found its silver lining in the form of music streaming revenue, largely propelled by digital service providers such as Spotify, based in Stockholm.

Now the tides are changing once again as artists and record labels find new revenue opportunities in the metaverse, while Danish music streaming service Moodagent has gone bankrupt, restructuring to avoid bankruptcy. The sale of non-fungible tokens (NFTs) in music is once again transforming the industry, amid warnings of legal pitfalls for artists and labels.

Would you pay $1 million for an unreleased demo of a 17-year-old Whitney Houston? That was the market price for an NFT sale earlier this year, giving one lucky fan an NFT of an unreleased song recorded as a demo before Houston was signed to her label.

The Houston estate opted to sell this demo as a one-of-a-kind piece of digital music via blockchain technology rather than traditional distribution channels, and it looks like the trend is here to stay. Earlier this year, David Bowie’s musical legacy entered this world when fans were able to purchase exclusive music and photos of the late superstar as NFT. Current hip-hop artist Travis Scott also reported over $20 million in revenue from NFT ticket sales for a virtual concert in the Fortnite metaverse game.

This is just the beginning, Scandinavian record label contracts may not always be up to date with the rapidly changing digital age, and many have not sufficiently considered, or even understood, the recent increase in NFT sales, or exploitation of rights in the metaverse.

This is partly due to copyright laws in the Nordic countries, which favor the original copyright holder in cases where there is doubt about the rights actually assigned by the artist to the label.

The music industry has tried to combat these issues for decades by collecting so-called “360 degree” rights from artists. In other words: the acquisition of the records themselves, but also the rights to the underlying composition, live performances, brand partnership rights and merchandise sales. However, these often overlook the fact that artists can now communicate directly with fans, sell exclusive content as NFTs, and even perform concerts directly in the metaverse, all without needing the power of distribution. or marketing that was traditionally provided by the label. . This effectively eliminates the middleman and maximizes personal profits.

Artists themselves can be vulnerable within the metaverse. Artists are recommended to seek trademark registration, as well as legal advice in drafting “smart contracts”, before selling their next exclusive piece of music as NFT. This can help ensure they are adequately protected and compensated for current and potential future sales.

The music industry has once again received a wake-up call, and given the lessons it was forced to learn in the 1990s, it’s moving much faster to catch up this time. The industry will be desperate to embrace new technologies in order to target its young and profitable fan base within the metaverse. One thing is certain: the need for effective intellectual property and entertainment lawyers is greater than ever.

Morten Jessel

Zacco

WTR is the leading global brand intelligence platform, universally recognized for its unparalleled coverage of cutting-edge developments and international issues, and its role in supporting strategic decision-making.


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