Entrepreneur and tech CEO Alvin Leong shares his thoughts and ideas for the future of the music industry, transformed by NFTs.
By CHIN JIAN WEI
In the past few years, NFTs have become commonplace in the art world. You would be hard-pressed to find someone who hasn’t at least heard of the NFT phenomenon, although not everyone possesses a full understanding of what NFTs are.
BASKL, too, has written about NFTs in the past, but here’s a brief explanation of what NFTs are for the uninitiated. The easiest way is to think of an NFT as a digital file that gives a buyer ownership of a particular piece of digital art. While other people may be able to save copies of the art by simply right-clicking on it, the person who owns the NFT is the only one who actually has exclusive ownership (the original artist still owns the copyright, though). It’s a bit like how you can take pictures of the Mona Lisa, but the exclusive ownership of the actual painting belongs to the French Republic.
In the beginning, NFTs were mainly used for visual art only, but nowadays they’re starting to be applied to other forms of art as well, most notably music. BASKL spoke to Alvin Leong, the Malaysian-born founder of Savvix Pte Ltd about his company’s plans to develop an NFT platform to enable musicians to sell their work as NFTs, like many visual artists are doing now.
“We believe that the music industry as we know it is sunsetting,” Leong, 38 says. “Since the outbreak of the pandemic, we see a lot of businesses that are going to digitalise entirely.” Leong elaborates, “We see many subscription-based platforms, like Facebook for example, are still centralised. But we realise that these NFTs introduce a decentralised business model for the art industry.”
What Leong means here in the context of the music industry, is that while currently, musicians would have their music distributed on subscription-based platforms such as Spotify or YouTube, where a central authoritative body calls the shots; through NFTs, musicians would be able to exert more control over their art, and directly earn money from the sale of their music, whether it be digital albums or concert tickets.
Leong says, “From the artist’s perspective, their work has been heavily affected by Covid. They can’t have concerts. Everyone is relying on live-streaming, TikTok, Instagram, Facebook Live, but these are centralised tools. When we talk about NFTs, we know that it’s solving one of the artist’s problems by cutting out the intermediaries, that’s the ultimate idea of it.
“The underlying challenges are that it’s too wide, too competitive in this space. And the content is strictly controlled,” Leong continues, referring to the centralised systems administrated by platforms like Facebook. “I think a lot of influencers lose ownership of their data. Ownership of your own data is important, that’s why NFTs are becoming so hot, as artists tokenise their assets. These assets could be their songs, art, whatever. I think this also allows for fast reach to get to their audience without going through intermediaries. Another point is that for those platforms, there is no mechanism to help these people accept terms of payment immediately.
“There are a lot of hidden talents out there, people who can sing, compose songs, who want to share that with the public. But these people are hidden in the sense that they don’t have a platform that allows them to shine. The traditional way is that musicians depend on a production company and distributors, and at the end of the day, they take only a small fraction of the profits because of the intermediaries. Now, with NFTs, they can maximise their profits and it’s more transparent.”
Leong adds, “There will be an NFT tax, but it will likely be a 7% tax or a 10% tax, something similar to GST in Malaysia, that will also give back to the platform and community.” Leong suggests that this is a much lower cut than those taken by the aforementioned production companies and distributors.
Leong’s platform will also allow artists to more easily accept and swap cryptocurrency and liquidate it back into their local currencies. One idea that Leong has is for musicians to sell blockchain-powered passes that entitle buyers to fully access an artist’s albums, attend concerts and participate in contests.
This is not entirely untested waters. International musicians such as Kings of Leon, Steve Aoki and Linkin Park’s Mike Shinoda have all dabbled in selling their work as NFTs in one form or another.
Looking to the future, Leong envisions how musicians may be able to conduct virtual concerts in the Metaverse (a simulated digital environment that uses augmented and virtual reality to mimic the real world for its users), and sell e-tickets using NFT technology. “We are preparing for what’s coming in the future. NFTs are a gateway to start. Musicians can start to prepare themselves in this world for when the Metaverse comes in.”
Leong is also interested to incorporate NFTs into the video game industry. Virtual items can be traded among players in the form of NFTs. Traditional online games like World of Warcraft have always allowed players to trade items by leveraging platforms like eBay and Amazon, but that was usually done without proper regulations and transparency. “That was the old way of trading digitally, there was a lot of fraud and miscommunication. But today with the technologies available, it can be more transparent and safer.”
For musicians looking to wet their feet in the NFT world, Leong encourages them to think about how to sell different kinds of assets such as tracks, albums, or concert tickets, whether virtual or otherwise. “We don’t want to stop musicians from trading on other platforms as well, such as on OpenSea.”
While NFTs can be controversial among many communities and have drawn their fair share of criticism, there is no denying that the nature of art is always shifting along with the times. The industry has always changed in response to the tools available to artists, and the nature of art buyers. How a musician or painter made a living a few centuries ago is very different compared to how artists earn money nowadays. Who can truly say how different the business models available to artists will be in the future?