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You can now invest in a song and earn royalty by buying an NFT. This is because FanTiger, which is a dedicated music NFT marketplace, has launched its debut music NFT with renowned Punjabi singer and actress Sunanda Sharma.
Through their platform, you can make a contribution by buying music NFT and in exchange for that, you get a lot of exclusive privileges along with the royalty income. With this arrangement, the artist only has to focus on the art and FanTiger supports them in marketing and distribution of the song.
“In this case, even fans will market the song as they have partial ownership of the song. This is completely different from the old days’ concept where fans would just listen to the song and may be talk to one or two of their friends about the song. But with NFTs, fans have an incentive to market and popularise the song. Therefore to my mind, NFTs are creating a level-playing, open and transparent field both in terms of fund raised and distribution of income amongst fans. All this is captured on the blockchain. Once we open the marketplace in next 2-3 months, these NFTs could be sold from one person to another and generate more income,” says Prashan Agarwal, CEO and Co-founder of FanTiger, who is also ex-CEO of Gaana.com.
For example, if an artist wants to raise Rs 20,00,000 to create a song video and market it. In this case, 2000 NFTs of Rs 1000 each could be issued to raise the money. Once the song is created, it will play on various streaming platforms like gaana.com, spotify.com, youtube.com etc. The royalty income generated from the streaming of the song will be distributed between the artist and the fans in a 50:50 ratio.
“If the song becomes a hit, the upside will benefit both the artist and the fans. So it’s a win-win situation for everyone,” adds Agarwal.
“We are trying to bring the fan community together, in order to support the artist on three fronts: funding, marketing and distribution. Depending on the amount of money being raised by the artist, the NFTs are created and value is derived for each NFT. Fans then buy these NFTs on FanTiger platform helping artist raise the desired money,” adds Agarwal.
It is not just royalty fans also get various privileges like NFT holders (fans) will be part of an exclusive community where they can interact with the artist, and share feedback. “As part of the community, fans will have access to exclusive listening party where the artist will play songs for the community members. It would be like a mini and exclusive concert for the community members,” says Agarwal.
Depending on the tier of the NFT, (Silver, Gold or Platinum) one can meet with the artist, have an exclusive video call with the artist, get VIP passes for the artist’s concerts, get personally signed merchandise and other benefits. “In future, FanTiger will be creating events/tours/concerts which will be NFT gated. This primarily means only if the person has the NFT, will he/she be able to attend the event/tour or concert,” says Agarwal.
How does FanTiger earn? “We take 2 per cent of the fund raised and that is our primary income. We also take 10% of the royalty that is generated on the song over the 5-7 year period (it would be different for different NFTs). Once the FanTiger marketplace opens in the next 2-3 months, we will charge 10 per cent of the profits made on the secondary sale of the NFT (charge the user) which will be equally divided between us and the artist,” says Agarwal.
Importantly, while the industry is awaiting some clarification, NFT should be considered as VDA and taxed at 30 per cent. “With NFTs having an underlying asset, it is already taxed and hence it may not be taxed again. However, every secondary sale will be taxed as per regulation,” says Agarwal.
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