The music industry isn’t ever really done changing. Musicians and creatives are always looking for new ways to connect with their audience and earn a living wage for their craft. For major streaming platforms like Spotify, extensive criticism has been aimed at them for their meager payout rates. As such, these musicians find it harder overall to make a living. The rising platform Zora is quickly becoming a game-changer for musicians. Yet it presents them an attractive alternative through the use of NFTs and tokenized merchandise. DreamingCrypto believes this to be yet another indicator of the decentralized age awakening.

Zora is a decentralized, open source protocol running on Ethereum. By leveraging blockchain technology and creating smart contracts, it’s empowering creators, including musicians, to mint, distribute and trade digital content directly on-chain. Zora was created in 2020. Its mission is to empower artists, musicians, and designers by offering them the right tools to tokenize their work and engage directly with their audiences. The platform’s infrastructure fundamentally favors a decentralized creator economy. It gives artists the tools to enable their music, digital goods, and custom fan merchandise to be sold, shared and streamed.

One of Zora’s first projects, $TAPE, was a lively experimental collaboration with DJ and producer RAC. The result of their collaboration was a token that could be redeemed for a unique set of limited-edition cassette tapes. This project demonstrated Zora's support for tokenized merchandise, showcasing how musicians can leverage the platform to offer exclusive items to their fans. In 2024, Zora released a mobile app. This new app makes it point-and-click simple for creators to mint and sell their content—from graphics to merchandise—right from their smartphones.

Solving the "Yeezy Problem" with Tokenized Merchandise

Zora is in fact doing something about the “Yeezy problem.” One aspect of this…of this challenge is sort of proving authenticity and making sure that creators are still being paid their design royalties for popular sneakers such as Kanye West’s Yeezys. In Zora’s words, the Yeezy problem is when a pair of Yeezys sells for $220. But, these sneakers have made it so that they can resell for more than $3,000! The issue Today’s solutions to guarantee royalties, including NFT-based solutions, can be deficient.

NFTs can uniquely track ownership and instantaneous settlement of royalty payments. These systems only function when transactions take place in compatible marketplaces – like Zora. To illustrate, if someone resells an NFT created on Zora at another marketplace such as OpenSea, the original creator no longer receives their creator share. This would even be true of controversial artists such as Kanye West. This limitation illustrates the point that we need bolder, broader solutions. They’ll make sure creators are properly compensated for their content no matter where it shows up.

Zora's approach to tokenized merchandise offers a potential solution to this problem by allowing musicians to capture value from the resale market. By minting NFTs representing physical or digital merch, musicians can dictate a royalty rate for each future sale of that item. Each time the goods are re-sold, the artist instantly receives a cut from the current selling price. This ensures that the creators continue to see a return on the increasing worth of their creations as their work matures.

Benefits of Zora's Tokenized Merchandise Model

Here are some of the benefits of Zora's tokenized merchandise model:

  • Increased Earnings: Musicians can earn more money from NFT sales and resales, as they can set a royalty percentage for each subsequent sale, allowing them to benefit from the increased value of their work over time.
  • Direct Connection with Fans: NFTs enable a two-way conversation between artists and fans, allowing musicians to build a more direct and meaningful relationship with their audience.
  • New Revenue Stream: NFTs provide a new revenue stream for musicians, allowing them to monetize their music and art in a new and innovative way.
  • Control Over Their Work: By issuing NFTs, musicians can maintain control over their work and ensure that it is not exploited or devalued by intermediaries.
  • Fair Compensation: NFTs can help ensure that musicians receive fair compensation for their work, as they can set the price and terms of the sale.

Zora: A New Era for Musicians

Zora unveils an anti-gatekeeping content distribution model. This creator-first model allows creators to distribute their work natively, without having to go through subscription video-on-demand (SVOD) streaming services. With NFTs, content owners are no longer handing over 95% of revenue to streaming services, nor are they handing over creative control. Without regulation, blockchain technology will, on its own, progress toward the path of least resistance—efficiency. This evolution will make it easier to trade and own digital assets.

NFTs and marketplaces like Zora provide an alternative to traditional streaming services, allowing creators to monetize their content in new and innovative ways. We see that this approach has the potential to greatly democratize digital ownership. What it really does is empower content creators and owners, just like the original revolutionary invention, the World Wide Web. DreamingCrypto thinks that Zora’s mission is a perfect fit with the Web3 vision of unchained worlds. It gives artists the tools to take charge of their careers and build direct relationships with their fans.