Fair Pay for Every Play: Episode 6, John Acquaviva and Ali Samadpour — NFTs: The Past, The Present and The Future
This week Fair Pay for Every Play host, Kristian Luoma, is joined by not one, but two guests. They are John Acquaviva and Ali Samadpour, who together have collaborated in writing an article about non-fungible tokens (NFTs) and how they may benefit the music industry and help towards fair reward for artists.
“Essentially what an NFT is, is like these unique, one-of-a-kind assets — but they’re all digital. So, we are thinking like digital art and music. People are making NFTs out of gifs and tweets. They all exist on a blockchain and the people who purchase these NFTs have digital ownership rights over that.
“The way that they verify the ownership is because it’s on the blockchain and it certifies that the item is unique and not interchangeable.” — Ali
This is in contrast to a fungible object, which Ali describes as swapping a $100 bill for five $20 bills.
Both John and Ali have extensive careers in the music industry. John is a music tech entrepreneur who founded techno label, Plus 8 Records and Beatport; an online music store popular with DJs to buy their files. Meanwhile, Ali is a successful music marketer and worked with the likes of MTV as founder of Prescient Digital.
The duo has combined their knowledge and experiences to explore the potential that NFTs hold to mutually benefit artists and their fans in terms of cultural appreciation and monetary reward.
Here’s the notes:
Timeline:
00:29 — Welcome to Fair Pay for Every Play and introduction to this episode’s guests, John Acquaviva and Ali Samadpour
02:00 — An introduction to NFTs
03:36 — The challenges of NFTS
06:00 — …and their value
07:03 — How NFTs could affect the music industry from artist and fan relationship to survival of a new consumer trend
09:19 — The history of Beatport and the values of paying for music
14:33 — The benefit of using NFTs in marketing campaigns for artists
17:32 — Translating NFTs to currency and revenue for fair pay for every play
23:22 — NFTs take over the metaverse
25:26 — Advice from Ali and John on the responsibility creatives have to ensure they benefit from NFTs
28:00 — Wrap up and goodbye
NFTs are not new, but there’s still a problem with interoperability
Circa 2017, big players, Bitcoin and Ethereum, brought cryptocurrency to public consciousness with people from around the world turning their attention to the potential to invest. NFTs are not a new development, however there are still challenges in making it a fair and transparent transaction option.
The biggest challenge is the format. John and Ali’s research aims to provide tangible perspective as they believe we are about to enter a critical mass of demand. If that’s the case, there is great emphasis on the need for clarity.
“So you bought something, but where do you store it? NFTs are not even minted. What we’re finding is some confusion… The time is now, so how can we all kind of start to bring some focus to it? Because right now everyone’s running around with their head cut off, so to speak. Every site is doing it their way.” — John
John compares the challenge to that in Europe and having to change physical money in line with the currency. In addition, there are questions around storing an NFT. It is estimated that only 5% — 10% of the population are using cryptocurrency and relying solely on it could create a barrier for entry.
Ultimately, there needs to be some hard and straight guidelines.
Mutual respect is needed between fan and artist
The duo are urging artists not to forget their fans if they start to use NFTs. Currently, there is a small pool of people willing and able to pay big money for NFTs. However, there is opportunity for artists to share their work with artists even to a smaller degree. This has been experimented with by the likes of Aphex Twin and Kings of Leon.
“You have to think about your history, your legacy, and respect both ways. An artist wants respect, but you must respect your fans. You should not go fishing for one fan who’s stupid enough to pay a million dollars. Now it can happen, but that’s not the approach I’d take.” — John.
Now, fans can access music for free and personally and creatively benefit from it. In return, an artist is paid a “disrespectful” fraction of a pence from the royalty stream. John created Beatport as a survival tactic to try and combat this during the digital age.
“I felt uneasy about DJs playing free digital files. Beatport was kind of cool because my thinking was, wait a minute, if you’re paying 10 euros for a vinyl, why shouldn’t a DJ? Why shouldn’t someone pay a couple of euros to their favourite artists? If you make a song and it touches my heart, or I just enjoyed it or it puts a smile on my face then it’s worth the price of a coffee. Think of yourself as buying your friend, the artist, a coffee.” — John
From a marketing perspective, Ali sees the value of NFTs. There is a lot of lore to jump onto the hype; see Taco Bell’s recent campaign to fund their staff through school. Artists could sell their music files as NFTs with complete metadata at a fair price. For example, an independent artist could sell a limited run of 500 sales, or memorabilia, advanced access or as part of fanclubs.
“My vision once NFTs become a little bit more mainstream is to essentially redefine what I call the artist-to-fan connection. There are ways to basically use NFTs to create fan clubs either around your personal artist career or even over a record label.” — Ali
He emphasises the need for these to be carefully planned and tasteful.
A solution for Fair Pay for Every Play
It is strongly believed by the pair that NFTs can be used to help track the purchase and repurchase of music files, which will enable fair remuneration for their use. In turn, this could provide a life-long revenue stream for artists.
“I see a lot of people want to address the problems of now and fix them in the future, notably with the black box. We’re aligned here in [the music] business, I’m happy to see companies want to find these additional sources of revenues and properly track and report them…the NFTs will be that digital contract and will be the best metadata we’ve ever had in order to track the performance, the purchase and the repurchase reselling of files.” — John
To reach fair pay for every play, creatives will have to ensure they are doing their due diligence with ensuring NFT agreements are written into their contract. Artists should take responsibility for correctly registering, tagging and documenting their work. For a few minutes of admin they should benefit from healthy residual revenue.
“Hypothetically we could have a secondary market reselling NFTs, and the residual payments would be like 10% to 20% that would go to the various owners per the contract and then 5% to 10% of the sale price would go to the reselling site. So, hypothetically we sell an NFT album for a hundred dollars. The rights holder would get $10 to $20 on each reselling of it. And then the secondary site would take up to $10 for themselves. Now the rest goes to the seller who resold and has passed on their ownership rights.
“If this keeps going and you have a nice back catalogue of music and people continue to sell their NFT or your NFT, you’re still going to be making residual revenue off something that’s been out for a while.” — Ali
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