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Are NFT Record Labels The Future Of Music?

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Are NFT Record Labels The Future Of Music?

NFTs present a new method for artists to build a community around their music — all while potentially earning more than they would through traditional record sales. GRAMMY.com unpacks the potentialities and pitfalls behind NFT record labels.

GRAMMYs/Jun 7, 2022 - 06:14 pm

NFTs have taken the internet by storm and becoming increasingly mainstream: A recent report.) found that there were over $86 million worth of NFT sales made in 2021, and trading skyrocketed to over $17 billion the same year. As the market for and creation of NFTs continue to boom, both independent and signed artists are flocking to the medium.

NFTs present a new method for artists to syndicate, sell and build a community around their music, all while potentially earning more than they would through traditional record sales. Electronic music DJ and producer 3LAU sold $18 million of NFTs, while deadmau5 racked up $2.7 million in NFT sales, and raised a seed round for his web3 music metaverse platform Pixelynx. As tokens, NFTs allow artists to have complete ownership over their music, often bypassing the common means of distribution and rights associated with traditional record labels.  

During this digital revolution, entrepreneurs and many established musicians are flocking to the space and creating NFT record labels to capitalize on this proclaimed gold rush of opportunity. With this comes the question — are these NFT labels viable, or just another way that brands and entrepreneurs are trying to cash in on the NFT craze?

What Is An NFT?

An NFT, or non-fungible token, represents a unique asset on a blockchain. An NFT has a distinctive identifying code that is documented on a distributed ledger, allowing anyone to see this public information from the point of creation to the most recent sale price. The Recording Academy recently got into the NFT ring, hiring three prominent artists to commemorate The 64th GRAMMY Awards with unique NFT content.

Fans can buy and sell their NFTs, and may own specific pieces of content without having physical copies. This means that an artist's copy is not one they possess physically; instead, it exists solely on the blockchain where anyone with access can see it at any time.  NFTs are one aspect of Web3 — the next version of the internet, which will be built on decentralized blockchain technology.

Are NFT Record Labels Actually Viable?

"I think NFT record labels are the future of music," says Wellington Lora, founder of music library The Cueniverse, which works with NFTs. "Can you imagine an artist releasing music directly to their fanbase, with no middlemen and all proceeds going directly to the artist? This is especially exciting for indie artists in helping to crowdfund their music career."

The NFT space is still being explored and interpreted by developers and users. But as more people become involved in creating NFTs for music-based purposes, there’s potential for this business model to quickly gain popularity.

"The NFT record label industry is still in its infancy," says Josh Neuman, President of metaverse development studio MELON. "When Snoop Dogg bought Death Row Records earlier this year, he said he plans to make it into the first NFT major record label, which would enable fans to buy and sell ownership of recordings, artwork and other digital assets from their favorite artists signed to Death Row. There’s also MoonwalkerFM, an NFT record label for the lo-fi genre."

Their sentiments were echoed by David Beiner and Jay Stolar of Hume, a metaverse record label. The two believe that the viability of web3 record labels will be dictated by how they use NFTs to engage with fans. "It’s not about the NFTs, it’s about building new fan relationships," Beiner and Stolar told GRAMMY.com via email.

"The best way to think of music NFTs is as a new form of media. With 8 tracks, cassettes and CDs, people asked how these new formats would change the dynamics of the music industry for fans," Beiner and Stolar say. "As a fan, you could now play music in your car and your music was more portable. A fan’s relationship with music became even more tied to their lifestyle and became something they could easily bring with them wherever they went. MP3s streamed across the internet were the next evolution of this."

This next evolution has major companies — from Facebook to Spotify — as well as labels and indie artists all vying for their slice of the metaverse pie.

"Music NFTs will similarly change how fans interact with music and how music integrates into our lives," continue Beiner and Stolar. "Labels can create new relationships where fans either have financial upside and/or creative input into the creation of music [by] their favorite artists."

As with any new format or culture shift, it’s difficult to say how they will change things, if at all, but NFTs could be primed to be the next big progression in music.

What Does Signing With An NFT Record Label Look Like?

It’s still uncharted territory, but many artists are already rolling the dice and signing with these futuristic metaverse labels. The number of NFT record labels currently in existence has yet to be reported.

"Blockchain/NFT record labels are not only viable, but will play a major role in flipping the music industry on its head in the coming years," says Thomas Pipolo, artist and Founder of Cotton Candy Records, who recently sold $20,000 worth of his music in a matter of hours as NFTs. Cotton Candy Records offers 80 percent of revenue to the artist, keeping 20 percent for itself.

"What artist, songwriter, producer wouldn't want to keep 80 percent of the pie? In today's music industry, labels and streaming platforms are the modern music industry's funding mechanisms," Pipolo tells GRAMMY.com. "Record labels ask artists for 70–80 percent of the pie, while major streaming platforms pay artists .004 cents a stream. Both are not viable."

Web3 platforms like NFT record labels are more viable and encourage a "work as play" mindset for fan communities, says Obie Fernandez, CEO of RCRDSHP, a digital collectibles platform built by and for the electronic music industry

"The prime motivation for participants is fun, but they can band together to form entities that look and behave kind of like record labels in that they take on A&R and marketing roles," he continues. "These entities may or may not eventually challenge the supremacy of traditional labels, but should certainly pull them in the direction of encouraging additional, authentic engagement between artists and their fan base."

Traditional record labels are already making the jump into the metaverse. In August, Sony backed NFT marketplace MakersPlace in a $30 million Series A round.

"As a music label, our number one goal is to support our artists — both in their artistic growth as well as new business opportunities. To that end, we are constantly aiming to stay ahead of the curve and support our artists in new ways of cross-collaborating between music, art and tech. NFTs are one example in this space," says Mahsa Salarvand, VP Head of the Global Business Office at Sony Music.

Head For The Future, But Tread Cautiously

Though a potentially great way for artists to prosper, the metaverse and NFTs are ripe with scams and companies attempting to take advantage of artists

Before committing to an NFT record label, artists should do their research to see if the firm has market traction, vet the leadership behind the project and verify any claims that certain artists have purchased their NFTs and are involved in the project. NFTs can be sent to anyone’s wallet address — just because an artist has an NFT in their wallet does not mean they are involved in the project. 


As with any new technology, it's up to content creators and consumers to determine the viability of NFTs. The more artists and labels engage with NFTs, the more they evolve and become valuable. The more they evolve and become valuable, the more artists and labels will entice others to use them.

"I do think there are some interesting issues that arise from the concept of NFT labels, governance being one of them," continues MELON'S Nueman. "It’s so interesting to consider the potential implications of a large group of owners voting on things like marketing and promotion spends. There are some incredibly interesting companies providing new ways to connect artists with their fanbases, while incorporating all the components of the music ecosystem. As the adoption of digital wallets becomes more mainstream, all of this is going to be a very exciting space to watch." 

The metaverse is a replication of our current habits without the constraints of physics. Within this interactive virtual space, Beiner and Stolar believe fans will have "the opportunity to enjoy music experiences in an entirely new way." They envision flying through a virtual concert or listening to the music in a variety of surreal environments; the possibilities seem endless.

"On the interaction side, mechanics like holding four of the artist’s music NFTs may allow you to choose the next song being played. When you go to play a game, maybe you’ll be able to set the music of the game based on music NFTs you own. You may also collect concert tickets, but the tickets will be digital and stored in your digital wallet as memorabilia. Perhaps having a certain number of digital concert tickets will unlock unreleased songs," they continue. "The level of fan interaction will go deeper, and the way in which we move about spaces will look much different; but at the end of the day, we’ll still be going to concerts and listening to music." 

Certain things won’t, and perhaps shouldn’t, change. After all, who doesn’t want to experience live music? While the future of the metaverse is unknown and exciting, it’s also clear that not all artists see it as something that will hit mainstream adoption.

"I think that there will be a big opportunity for artists to get placements in these different metaverses and play some virtual concerts, but I think the metaverse is so far away from being something that is mainstream," continues Pipolo. "I could be wrong, but it's not my thing."

Can NFTs Help Labels Stay Ahead Of The Curve?

"The market is down," says rapper, actor and entrepreneur Ja Rule, who recently put his focus into the metaverse. In March 2021, Rule sold a $122,000 NFT of a painting of the logo for his disastrous Fyre Festival. "I [first] heard about NFTs maybe like, a couple of weeks ago," he told Forbes at the time. "I wasn't too educated on them, and I’m still learning a lot about it...I think people got a little bit tired of the regular stocks-and-bonds way of investing."

In any business, stagnation will see you left behind and out of the game. This has been true throughout the history of the music industry, but is doubly so in its current climate — particularly for artists. Artists and labels that don’t continue evolving, pushing their creativity and embrace of technology, risk falling by the wayside.

As the landscape of music changes, so do its practices. NFTs may be the next big change the music industry and its artists have been waiting for. When asked if record labels in the metaverse were viable, Ja Rule reminds us that "anything is possible in the metaverse."

We're Probably On An Irreversible Course Into The Metaverse. What Role Will Music Play In It?

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GRAMMY SoundChecks With Gavin DeGraw

GRAMMYs/Dec 3, 2014 - 05:06 am

On Aug. 28 Nashville Chapter GRAMMY U members took part in GRAMMY SoundChecks with Gavin DeGraw. Approximately 30 students gathered at music venue City Hall and watched DeGraw play through some of the singles from earlier in his career along with "Cheated On Me" from his latest self-titled album.

In between songs, DeGraw conducted a question-and-answer session and inquired about the talents and goals of the students in attendance. He gave inside tips to the musicians present on how to make it in the industry and made sure that every question was answered before moving onto the next song.

 

Juan Gabriel named 2009 Latin Recording Academy Person Of The Year

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Juan Gabriel named 2009 Latin Recording Academy Person Of The Year

Annual star-studded gala slated for Nov. 4 in Las Vegas during 10th Annual Latin GRAMMY Week celebration

GRAMMYs/May 15, 2017 - 01:36 pm

 GRAMMY.com

 Internationally renowned singer/songwriter/performer Juan Gabriel will be celebrated as the 2009 Latin Recording Academy Person of the Year, it was announced today by The Latin Recording Academy. Juan Gabriel, chosen for his professional accomplishments as well as his commitment to philanthropic efforts, will be recognized at a star-studded concert and black tie dinner on Nov. 4 at the Mandalay Bay in Las Vegas, Nev. 

The "Celebration with Juan Gabriel" gala will be one of the most prestigious events held during Latin GRAMMY week, a celebration that culminates with the 10th Annual Latin GRAMMY Awards ceremony. The milestone telecast will be held at Mandalay Bay Events Center in Las Vegas on Nov. 5 and will be broadcast live on the Univision Television Network at 8 p.m. Eastern/7 p.m. Central. 

"As we celebrate this momentous decade of the Latin GRAMMYs, The Latin Recording Academy and its Board of Trustees take great pride in recognizing Juan Gabriel as an extraordinary entertainer who never has forgotten his roots, while at the same time having a global impact," said Latin Recording Academy President Gabriel Abaroa. "His influence on the music and culture of our era has been tremendous, and we welcome this opportunity to pay a fitting tribute to a voice that strongly resonates within our community.

Over the course of his 30-year career, Juan Gabriel has sold more than 100 million albums and has performed to sold-out audiences throughout the world. He has produced more than 100 albums for more than 50 artists including Paul Anka, Lola Beltran, Rocío Dúrcal, and Lucha Villa among many others. Additionally, Juan Gabriel has written more than 1,500 songs, which have been covered by such artists as Marc Anthony, Raúl Di Blasio, Ana Gabriel, Angelica María, Lucia Mendez, Estela Nuñez, and Son Del Son. In 1986, Los Angeles Mayor Tom Bradley declared Oct. 5 "The Day of Juan Gabriel." The '90s saw his induction into Billboard's Latin Music Hall of Fame and he joined La Opinion's Tributo Nacional Lifetime Achievement Award recipients list. 

At the age of 13, Juan Gabriel was already writing his own songs and in 1971 recorded his first hit, "No Tengo Dinero," which landed him a recording contract with RCA. Over the next 14 years, he established himself as Mexico's leading singer/songwriter, composing in diverse styles such as rancheras, ballads, pop, disco, and mariachi, which resulted in an incredible list of hits ("Hasta Que Te Conocí," "Siempre En Mi Mente," "Querida," "Inocente Pobre Amigo," "Abrázame Muy Fuerte," "Amor Eterno," "El Noa Noa," and "Insensible") not only for himself  but for many leading Latin artists. In 1990, Juan Gabriel became the only non-classical singer/songwriter to perform at the Palacio de Bellas Artes in Mexico City and the album release of that concert, Juan Gabriel En Vivo Desde El Palacio De Bellas Artes, broke sales records and established his iconic status. 

After a hiatus from recording, Juan Gabriel released such albums as Gracias Por Esperar, Juntos Otra Vez, Abrázame Muy Fuerte, Los Gabriel…Para Ti, Juan Gabriel Con La Banda…El Recodo, and El Mexico Que Se Nos Fue, which were all certified gold and/or platinum by the RIAA. In 1996, to commemorate his 25th anniversary in the music industry, BMG released a retrospective set of CDs entitled 25 Aniversario, Solos, Duetos, y Versiones Especiales, comprised appropriately of 25 discs.   

In addition to his numerous accolades and career successes, Juan Gabriel has been a compassionate and generous philanthropist. He has donated all proceeds from approximately 10 performances a year to his favorite children's foster homes, and proceeds from fan photo-ops go to support Mexican orphans. In 1987, he founded Semjase, an orphanage for approximately 120 children, which also serves as a music school with music, recreation and video game rooms. Today, he continues to personally fund the school he opened more than 22 years ago.   

Juan Gabriel will have the distinction of becoming the 10th Latin Recording Academy Person of the Year honoree, and joins a list of artists such as Gloria Estefan, Gilberto Gil, Juan Luis Guerra, Julio Iglesias, Ricky Martin, and Carlos Santana among others who have been recognized. 

For information on purchasing tickets or tables to The Latin Recording Academy Person of the Year tribute to Juan Gabriel, please contact The Latin Recording Academy ticketing office at 310.314.8281 or ticketing@grammy.com.

Set List Bonus: Bumbershoot 2013
Grizzled Mighty perform at Bumbershoot on Sept. 1

Photo: The Recording Academy

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Set List Bonus: Bumbershoot 2013

GRAMMYs/Dec 3, 2014 - 04:22 am

Welcome to The Set List. Here you'll find the latest concert recaps for many of your favorite, or maybe not so favorite, artists. Our bloggers will do their best to provide you with every detail of the show, from which songs were on the set list to what the artist was wearing to which out-of-control fan made a scene. Hey, it'll be like you were there. And if you like what you read, we'll even let you know where you can catch the artist on tour. Feel free to drop us a comment and let us know your concert experience. Oh, and rock on.

By Alexa Zaske
Seattle

This past Labor Day weekend meant one thing for many folks in Seattle: Bumbershoot, a three-decade-old music and arts event that consumed the area surrounding the Space Needle from Aug. 31–Sept. 2. Amid attendees wandering around dressed as zombies and participating in festival-planned flash mobs to Michael Jackson's "Thriller," this year the focus was on music from the Pacific Northwest region — from the soulful sounds of Allen Stone and legendary female rockers Heart, to the highly-awaited return of Death Cab For Cutie performing their 2003 hit album Transatlanticism in its entirety.

The festival started off on day one with performances by synth-pop group the Flavr Blue, hip-hop artist Grynch, rapper Nacho Picasso, psychedelic pop group Beat Connection, lively rapper/writer George Watsky, hip-hop group the Physics, and (my personal favorite), punk/dance band !!! (Chk Chk Chk). Also performing on day one was Seattle folk singer/songwriter Kris Orlowski, who was accompanied by the Passenger String Quartet. As always, Orlowski's songs were catchy and endearing yet brilliant and honest.

Day one came to a scorching finale with a full set from GRAMMY-nominated rock group Heart. Kicking off with their Top 20 hit "Barracuda," the set spanned three decades of songs, including "Heartless," "Magic Man" and "What About Love?" It became a gathering of Seattle rock greats when, during Heart's final song, Pearl Jam guitarist Mike McCready joined for 1976's "Crazy On You."

Day two got off to an early start with performances from eccentric Seattle group Kithkin and Seattle ladies Mary Lambert and Shelby Earl, who were accompanied by the band Le Wrens. My highlight of the day was the Grizzled Mighty — a duo with a bigger sound than most family sized bands. Drummer Whitney Petty, whose stage presence and skills make for an exciting performance, was balanced out by the easy listening of guitarist and lead singer Ryan Granger.

Then the long-awaited moment finally fell upon Seattle when, after wrapping a long-awaited tour with the Postal Service, singer/songwriter Ben Gibbard returned to Seattle to represent another great success of the Pacific Northwest — Death Cab For Cutie. The band celebrated the 10-year anniversary of their album Transatlanticism by performing it from front to back. While a majority of attendees opted to watch the set from an air-conditioned arena, some of us recognized the uniqueness of this experience and enjoyed the entire set lying in the grass where the entire performance was streamed. 

Monday was the day for soul and folk. Local blues/R&B group Hot Bodies In Motion have been making their way through the Seattle scene with songs such as "Old Habits," "That Darkness" and "The Pulse." Their set was lively and enticing to people who have seen them multiple times or never at all.

My other highlights of the festival included the Maldives, who delivered a fun performance with the perfect amount of satirical humor and folk. They represent the increasing number of Pacific Northwest bands who consist of many members playing different sounds while still managing to stay cohesive and simple. I embraced the return of folk/pop duo Ivan & Alyosha with open arms and later closed my festival experience with local favorite Stone.

For music fans in Seattle and beyond, the annual Bumbershoot festival is a must-attend.

(Alexa Zaske is the Chapter Assistant for The Recording Academy Pacific Northwest Chapter. She's a music enthusiast and obsessed with the local Seattle scene.)

Neil Portnow Addresses Diversity & Inclusion, Looks Ahead During Speech At 2019 GRAMMYs

Neil Portnow and Jimmy Jam

Photo: Michael Kovac/Getty Images

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Neil Portnow Addresses Diversity & Inclusion, Looks Ahead During Speech At 2019 GRAMMYs

Jimmy Jam helps celebrate the outgoing President/CEO of the Recording Academy on the 61st GRAMMY Awards

GRAMMYs/Feb 11, 2019 - 10:58 am

As Neil Portnow's tenure as Recording Academy President/CEO draws to its end, five-time GRAMMY winner Jimmy Jam paid tribute to his friend and walked us through a brief overview of some of the Academy's major recent achievements, including the invaluable work of MusiCares, the GRAMMY Museum, Advocacy and more.

Portnow delivered a brief speech, acknowledging the need to continue to focus on issues of diversity and inclusion in the music industry. He also seized the golden opportunity to say the words he's always wanted to say on the GRAMMY stage, saying, "I'd like to thank the Academy," showing his gratitude and respect for the staff, elected leaders and music community he's worked with during his career at the Recording Academy. "We can be so proud of what we’ve all accomplished together," Portnow added.

"As I finish out my term leading this great organization, my heart and soul are filled with gratitude, pride, for the opportunity and unequal experience," he continued. "Please know that my commitment to all the good that we do will carry on as we turn the page on the next chapter of the storied history of this phenomenal institution."

Full Winners List: 61st GRAMMY Awards