You don’t own any of the intellectual property unless says so.” “It works very similarly in the NFT space. You don’t own the intellectual property just by buying, but you own that unique physical copy of the record,” explains Karl Fowlkes, entertainment attorney and founder of the Fowlkes Firm. Unless otherwise stated, NFTs do not transfer the ownership of the copyrighted material therein, so if a song is featured in an audio-visual NFT, the composition and sound recording itself still belongs to the original owner. When minting an NFT, it is also crucial that the creators are clear about what exactly is being bought and sold. “You’re going to see litigation in this area,” LaPolt warns.

As stated in VARA, artists are protected from the attribution of their work, their art being attributed to work they did not create, and the mutation of their work, among other protections. “You don’t have the rights to that stuff.” In fact, in Section 106 of the United States Copyright Act, visual artists are protected under the Visual Artist Rights Act, also known as VARA. That is going to be a disaster,” she says. “I’ve seen some NFTs that have Disney or Marvel characters in there.

LaPolt urges artists to beware of using the intellectual property of someone else who is not involved in the process of minting the NFT. But even though it may take major label stars more time to catch up with minting NFTs, this paradigm could stand to flip in the coming months. Independent artists tend to have less collaborators to settle with and less middlemen to gate-keep their decisions. This might explain why, to date, 57.1% of music-related NFT sales have been made by independent artists and brands. For a major-label pop star whose liner notes contain a laundry list of co-writers and producers (each of which could be signed to their own labels and/or publishers), clearing the music within an audio-visual or even a simply audio-based NFT often becomes a lengthy, expensive process. So far, one of the most popular forms of NFTs has been audio-visual - meaning a graphic paired with an audio recording - but these can easily become a copyright mess, because these sorts of NFTs likely contain the work of multiple artists (visual artists, songwriters, producers, etc.).ĭina LaPolt, an entertainment attorney and the founder of LaPolt Law, warns that minting these “becomes murky, because there’s other owners and controllers with you in the NFT.” In order to do this safely and legally, you must ask permission from each copyright holder involved and determine royalty splits for the NFT in advance. It seems that every day a new use case for NFTs is being advertised, or a new record is broken, but because of its quick ascent from something traded among crypto-nerds to its use in the mainstream populace, many folks in the music industry rushed to join in quickly. By April 2021, according to data collected by Water + Music, musicians had earned $70.5 million in NFT sales to date, the vast majority of which was made from February 2021 up to now. But the music industry at large did not catch on until the last six months. NFTs have been around since the creation of Crypto Kitties (one-of-a-kind digital pets that came around in late 2017), and a few experimental musicians like 3LAU and RAC were minting them before the current craze. In order to purchase an NFT, most marketplaces require payment in fungible cryptocurrencies, but there are a few exceptions which offer payment with traditional cash or credit as well. Just like paper money, fungible cryptocurrencies are easily exchanged with something of equal value. In contrast, fungible forms of cryptocurrency - like Etherium, Bitcoin or Dogecoin - are not unique. NFTs can be artwork, tickets, music, trading cards, or other assets which are unique and not easily exchanged. For the uninitiated: Non-fungible tokens are digital collectibles which are created (“minted”) and sold using the security of blockchain, a publicly accessible ledger which tracks and records transactions.

Spotify plans to nft digital craze