Published on February 21st, 2022 | by Dr. Jerry Doby0
Loud Crypto Records: NFTs Could Lead to the “Rebirth of Hip Hop”
Hip Hop as a movement has matured and established itself in the mainstream. This year’s Superbowl half-time show was proof of this. Snoop Dogg, Dr Dre, Eminem, Mary J. Blige, Kendrick Lamar, and 50 cent put on a show that will go down in history as one of the greatest half time shows ever.
The culture has come a long way from its grassroot beginnings in New York, which rapidly spread to the West Coast, to the south, and eventually went worldwide.
During the pandemic, HipHop became the most listened to genre of music in the US.
The movement has always reinvented itself, and subgenres have multiplied and emerged during the last decade. Waves of lyricists, gangster rappers, mainstream rappers have repeated multiple times within the past decades.
But Sam Kovacs, the cofounder of Loud Crypto Records, the first decentralized rap label, thinks the movement might be set for a “rebirth”.
He believes that NFTs –non fungible tokens– could be the next catalyst which allows the movement to reinvent itself.
NFTs can correct the faults of the music industry.
Sam Kovacs, who goes by dollardollarsam online, believes that artists who sign 360 record deals while only retaining 10% to 20% are being short changed.
“Imagine you’re a start-up and you raise cash. You’d likely be looking to give away 10% to 20% of your capital in exchange for start up capital. If someone offered you cash against 80% of your company, you’d likely decline”.
“But this is basically the deal that artists are getting when going with major record labels.”
He thinks that there should be a middle road between going independent, and giving up the vast majority of your future revenues. Loud Crypto Records, which will operate as a foundation with the goal of furthering HipHop culture, wants to position itself as offering the best of both worlds:
“Big production budgets, big promotion budgets, all while giving big royalties to the artists”. Sam believes that people should not settle for anything less than a great deal, and that with a bit of creativity and foresight, such a structure can be set up.
The secret sauce according to him: leveraging the power of community.
By releasing a generative collection of NFTs in homage to HipHop’s greats, the foundation can acquire the startup capital to sign 6 to 8 rappers in the first year after launch.
Holders of the NFTs will run the project as what is called a “decentralized autonomous organization (DAO)”.
The holders of the Loud Crypto Records Genesis NFTs will vote for the artists that are signed, the budgets allocated to each artist, and have a hands-on involvement in the label’s decisions.
“Instead of offering an artist $500K for an album and giving him 10% royalties, we can maybe offer him $300K-$400K and 50% to 70% royalties.
The balance of royalties would go to the foundation and to NFT holders. This way HipHop fans are perfectly aligned with the artists which are within the label, and everyone benefits financially.
The opportunities for the Hip Hop industry.
In HipHop history, the mixtape played a pivotal role. From the cultural significance of being on one of Grandmaster Flash or Kool Herc’s tape, to being the medium through which the likes of 50 cent and T.I. propelled their careers, mixtapes were a mainstay of the genre.
With mass distribution through streaming sites, the exclusivity and scarcity of a dope mixtape has all but disappeared.
Sam Kovacs says that the Loud Crypto Records team is working on bringing mixtapes to the NFT world. According to him, they are already in discussions with certain HipHop legends to drop their first Non Fungible Tape. Only the holders of the mixtape will be able to listen to it.
Sam says that this barely scratches the surface of the opportunities within the industry. From NFT single releases, merch opportunities, concert tickets, he sees an industry that is ripe for disruption.
“Our genesis NFT drop is just the tip of the iceberg. If we do this right, we can change how music is financed, produced, and distributed for the upcoming decades, and do so in a much fairer way, where everyone involved gets his share.”