Music NFTs are an alternative way for artists to increase their earning potential: Report

Mumbai: Music NFTs are an alternative way for artists, most of whom depend on extractive record labels and centralised platforms to earn a living, to increase their earning potential, according to a report by video games, data, analytics and market research firm Newzoo. This allows them to sell their singles, EPs, or albums as NFTs to their most loyal fans, it added. 

The report indicated the trends in the metaverse, blockchain gaming, and NFTs. It identifies and analyses metaverse trends, case studies, the future of the metaverse, P2E, blockchain gaming, and NFT space.

According to Newzoo's report, 2021 has undeniably been the year of NFTs, with several high-profile collections being sought after for the boost in social status and financial incentives they offered. Despite the current market pullback profile picture (PFP) NFTs are likely to be key elements when it comes to digital identity in the metaverse.

The report suggests that consumers spend increasingly more time in virtual worlds, and successful brands follow them. As a result, consumer-facing companies will be forced to develop a metaverse strategy to stay connected with their (future) customers and remain relevant.

As time spent in virtual worlds increases, our digital identity and representation will grow in importance. This opens a wide array of opportunities for traditional and digital fashion brands alike to dress our digital selves with in-game skins and virtual garments, thus giving rise to the direct-to-avatar business model. This also has important implications for the future of e-commerce.

Play to earn and blockchain gaming -  As time passes, we are likely to see more blockchain games challenge traditional AAA titles in terms of technical complexity and at some point size of the player base. Though blockchain gaming faces some notable challenges particularly sustainability and regulatory concerns these are likely to be mitigated as the space matures.

The report also highlights the key challenges of this industry. Some major challenges include politics and regulations where governments will want to control virtual worlds, and regulations may create new barriers between worlds. Also, UGC spaces require strong safety and content moderation processes in place, supported by machine learning and trust/safety agents.

Privacy and ethics also need to be addressed because metaverse activity tracking has the potential to become far more powerful than web tracking. At the same time, accessibility and scale are also seen as challenging as the metaverse is not yet accessible or interoperable at scale. Lastly, new standards and protocols are needed for the industry.

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