08 "When You See Yourself" NFT
For taking nonfungible tokens into the musical mainstream
Between pandemic-era tour cancellations, streaming services and recording companies keeping the lion’s share of profits, musical artists could use some new revenue streams. So when the internet started losing its mind over nonfungible tokens (NFTs), Kings of Leon didn’t miss a beat, becoming the first major musical act to offer an album in the format.
NFTs are a digital asset similar to cryptocurrency, but their quantities are much more limited. NFTs are increasingly part of the mainstream—with the sales to prove it: US$2.5 billion for the first half of 2021, up from just US$13.7 million over the same period last year, per DappRadar.
For musical acts, they offer a new way of selling their music and other digital content directly to fans.
“NFTs allow artists to interact with their fan base unencumbered,” said Josh Katz, founder and CEO of YellowHeart, an NFT marketplace that partnered with Kings of Leon on the project. “They allow for ownership of a piece of art to be memorialized and transparent.”
Katz launched YellowHeart in 2017 as a ticketing platform that used NFTs to eliminate scalpers, but when the pandemic forced music venues to close, he started talking with bands about creating digital albums using NFTs. The manager for Kings of Leon, Andy Mendelsohn, immediately saw the potential and by late 2020, he paved the way for the band to make an NFT album with a portfolio of other assets to support it.
But the partners had to strategically map out what the package would include. That meant convincing the band that their fan base would embrace the opportunity to purchase music as NFTs, then determining what assets would generate the most excitement and value.
“It takes time to ideate the project,” Katz said. “You need to understand your buyer and the creative process so you can build something that’s super compelling.”
The band worked with longtime creative partner Night After Night to build a narrative around the album—one that drove decisions for the type of digital music and art that fans would respond to and ultimately purchase. The content for When You See Yourself was completed in early 2021, and three types of tokens were made available beginning 5 March.
The first was a US$50 token offering a special minted album package with enhanced media elements, a digital download of the music and a limited-edition vinyl record. The second featured six sets of elaborate audio-visual art, with prices ranging from US$95 to US$2,500. Finally, the team also created 18 “golden ticket” tokens that included four front-row seats to every Kings of Leon concert for all current and future tours, along with backstage passes, a concierge, a driver, swag bags and other VIP experiences. YellowHeart auctioned six to the highest bidders (with one going to charity), and the rest were put in a vault to gain value over time.
The project racked up rave reviews. During the two-week sales window, Kings of Leon sold more than US$2 million of the tokens, with US$600,000 donated to Crew Nation, a relief fund for touring crews that couldn’t work during the pandemic.
Remixes and Covers
The Kings of Leon project could be a powerful model for future album releases, allowing artists to bypass streaming and traditional download markets in favor of collecting album sales directly. For example, when Grimes created digital artwork and music as NFTs in March 2021, she made US$5.8 million.
That potential boost to music sales would be enough of a win. But NFTs could also be a boon to the secondary sales market, with a percentage of each resale going back to the artist, while embedded resale limits could deter scalpers.
“Artists are over the moon,” Katz said, noting other bands and managers have flooded him with calls about the NFT process and whether it would be right for their music.
The Kings of Leon project took on new dimensions in September: The crew of SpaceX Inspiration4, the first all-civilian mission to orbit, made the band’s “Time in Disguise” the first NFT song to be played in space and then auctioned off for charity.
Like any new tech, NFTs are largely the province of early adopters, but Katz predicts a shift: “People are getting used to using crypto wallets to exchange and share assets. It’s becoming the norm.”
And that’s likely to mean encores—and copycats.
The Rise (and Rise and Rise) of NFTs
As NFTs move beyond the fringe, here are few notable projects helping build interest:
Everydays: the First 5000 Days
In March 2021, digital artist Beeple (Mike Winkelmann) sold a digital collage of 5,000 pieces for US$69.3 million. It’s the most money anyone has paid for digital art—and was the first NFT to be auctioned by Christie’s. Beeple’s work had previously sold for about US$100—now he’s considered one of the most valuable living artists.
William Shatner trading cards
"Star Trek" star William Shatner created a collection of NFT digital trading cards featuring images from his life and work. Within nine minutes, he’d sold 10,000 packs on the WAX blockchain marketplace in July 2020.
"WarNymph Collection Vol. 1"
Pop star Grimes sold a collection of her own digital artwork and music as NFTs on the Nifty Gateway blockchain in March 2021. She launched the sale via a post to her 1.1 million Twitter followers, and within 20 minutes the collection was sold out, netting her US$5.8 million.
“just setting up my twttr”
Bridge Oracle CEO Sina Estavi won a US$2.9 million bidding war on the Valuables blockchain for an NFT of Twitter co-founder Jack Dorsey’s very first tweet. The social media titan reportedly converted the proceeds to bitcoin and donated them to GiveDirectly to support COVID-19 response in Africa.
Listen to YellowHeart founder and CEO Josh Katz describe how NFTs create new opportunities in a digital world.
The fans have had nothing to buy for 20 years except maybe a ticket or a T-shirt. So now the fans have been given something to buy in a digital universe, and whether we realize it or not, we’re all living in a digital universe. So these are just the digital collectibles, the word collectibles is used today, but the digital assets that we create through our lives.
So if I’m a fan of Kings of Leon, I’m going to collect an asset of theirs, which is an album, a poster, something like that. Just look at the case of a poster, a poster where I have one in my house, no one ever sees it. Maybe some people come over, but in my digital universe, my thousands or hundreds of followers will see it, and my friends see it, and it’s proof of something. It’s status. It’s something cool. And then guess what? I need some money—boom, one click, it’s in a marketplace for sale, and I actually maybe make money on it.
The younger generation has been collecting digital assets now for years through the video game space, and they’ve been unsaleable, nontransferable and they hold no value. And what this does is it actually creates value. So all of the things that we’re doing in this digital universe, this allows us to assign a value to them, put them into a marketplace that’s truly transparent, which means it’s actually driven by true supply and demand. And it allows for ultimate liquidity on a global basis, which is super powerful.