The embrace of NFTs by Kings of Leon was a wake-up call for their record label—and the music industry, which is now racing to avoid the same mistake that almost killed it 20 years ago.
More than two decades after it released its first album, Kings of Leon was honored at the Rock & Roll Hall of Fame. But what got the southern-inflected rock band to Cleveland last April was not its music; it was its non-fungible token (NFT) called “NFT Yourself.”
The digital tokens went on sale in March for the Ethereum equivalent of $50 a pop, and included a copy of the band’s latest album, a unique piece of artwork, a one-off gold record and musical outtakes. Over the two weeks it was available, KoL moved 6,500 copies of “NFT Yourself” for a total of $2.2 million, including six “Golden Tickets” that sold at an average price of $100,000. Those extra-special NFTs included lifetime VIP concert access to one show per tour, complete with a chauffeur. Since the original two-week offer, the NFTs have generated another $246,000 in aftermarket sales, with the band collecting 10% of that.
“NFT Yourself” wasn’t a massive financial success for the Kings of Leon: At its peak in 2008 the band, which consists of three brothers and a cousin, made an estimated $10 million off its multiplatinum Only by the Night album. But “NFT Yourself” marked the first time a mainstream act fully embraced NFTs and, depending on your point of view, it’s either a revolution, a lucrative publicity stunt or the latest gasp in the decades-long undoing of the traditional music industry.
Other acts have done much better with NFTs. Superstar DJ Justin Blau (a.k.a. 3lau) sold $20 million worth of NFTs since he started issuing them last fall, after teaming up with the surrealist artist Mike Parisella (a.k.a. SlimeSunday) and selling 33 limited-edition NFTs of his latest album, Ultraviolet, which included animated videos by the artist synced with Blau’s music.
“The model that I’m working on is meant to be a reverse record deal,” says Blau, who is 30 and has worked with acts like Rihanna, Katy Perry and Ariana Grande. Instead of what he called the “predatory” 80% that most labels take, he plans to fund production costs by selling directly to fans. His team is now in conversations with Billie Eilish, Madonna and Metallica and preparing for what he hopes will be the first blockchain music auction to be hosted at Christie’s, the London auction house.
It’s perked up the record companies, too, who are eyeing the rise of NFTs as possibly more dangerous than the pirated MP3 files that sent the industry into a death spiral 20 years ago, but also potentially as miraculous as the streaming technology that has since revived it: Since 2007, revenue from recorded music has surged 35% to almost $40 billion, right where it was at the CD-fueled peak it hit in 1999, according to entertainment research firm, Midia. Weeks after “NFT Yourself”’ was released, executives at Kings Of Leon’s label, Sony/RCA set up a task force to get educated on NFTs, with similar efforts taking root at each of the three major music companies, including Sony Music, Warner Music Group and Universal Music Group.