As the concert and festival industries continue to rebound from the pandemic, it's no surprise that other avenues of income, besides ticket sales, are arising as a way for promoters to bounce back from the financial losses of 2020 and 2021. Enter NFTs - particularly NFTs at music festivals.
Why the sudden rise in NFTs at festivals?
Starting in 2014, NFTs (non-fungible tokens) allowed those purchasing any digital asset on a blockchain (e.g. Solana, Ethereum, Flow, etc.) an exclusive identifier showing proof of ownership. This made the asset rare, therefore increasing its value.
Sales of NFTs for digital artwork has skyrocketed into the millions of the years, with total sales from June 2021 to June 2022 hitting $29 billion. It was only a matter of time for NFTs to become a part of the concert industry.
What do NFTs at a festival look like?
NFTs in the music industry can be used in a variety of ways. For example, an NFT record label gives musicians complete ownership of their songs and recordings. If that musician is the owner of the NFT, they're the one person who can dictate how their work is controlled and used and also set the rates for their work (most artists would kill for this).
NFTs at music festivals can come in a variety of forms. Here, the items purchased can be either physical and digital; anything from passes, photo books, art prints and digital collectibles are among the current offerings. What remains is the exclusivity of the item itself.
Which festivals are leading the way?
Coachella was the first of the major festivals to announce NFTs as part of their 2022 offerings. Partnering with FTX US, Goldenvoice (the concert promoter for the festival) was able to offer collectibles including lifetime festival passes, on-site experiences and physical items. The NFTs were made available for purchase in February 2022 (two months before the fesitval itself) with some offerings still available online.
Afterparty NFT Art and Music Festival is a whole other ballgame. Launched in Las Vegas in March 2022 with two day of performances from artists including The Chainsmokers, Sofi Tukker and Gryffin, Afterparty utilized NFTs to their fullest capability, offering no tickets to consumers. It also limited the amount of attendees (no capacity in the tens of thousands over here. Forget FOMO. This was FONBATGI - Fear Of Not Being Able To Get In).
Billing it as a 'digital utopia,' Afterparty offered a mere 1,500 Utopians (each uniquely designed) with each one allowing artist-level access for at least five years, priority access for pop-up events NFT. NYC and Art Basel Miami, priority guest list for all upcoming Afterparty NFT drops, access to selected events at the Afterparty house in Los Angeles in addition to a multitude of other exclusive offerings. This is the festival purchase that keeps on giving years after the original event.
What's interesting is that by ticketing this event via NFTs, Afterparty was able to eliminate reselling of festival passes via third party websites like StubHub, Vivid Seats, etc.
When reselling occurs, artists don't receive any additional income from the inflated ticket price. When tickets or passes are sold via NFTs, any resale would be trackable via the blockchain and artists could receive additional compensation for any added value added to the ticket price.
With a recession looming, and projections of 2023 being a difficult one to sell tickets, it won't be surprising to see more and more festivals using NFTs as an added incentive to draw the crowds.