⚡️How 130k fans ‘almost’ bought a piece of a Nas song
Happy Friday everyone!
Something cool happened this week.
Over 130,000 people ‘almost’ bought a part of a multiple Grammy-winning Hip-Hop legend- Nas’ 2020 songs: Ultra Black & Rare 💎
Why almost?
Well, because the demand for such a thing was so insane, the website facilitating it crashed, leading to the ‘drop’ be postponed 😅
What am I going on about here?
Music investing startup- Royal, co-founded by renowned DJ 3LAU (pronounced ‘blau’) partnered with bonafide Hip-Hop royalty ‘Nas’, and were giving fans the option to buy a piece of his music, in the form of NFT’s.
What’s in it for the fans?
The ownership of the tokens enable access to a % of the royalties accrued by the song, along with other special gated access to experiences that the artist could choose
How would it work? Twitter has you covered 👇🏻
While there has been a lot of hype brewing around the intersection of Music and NFT’s, seeing projects like Royal actually ship product and show proof of the demand there exists for better ways for artists and fans to engage directly, is a bullish sign if anything 🔥
Why is this such a big deal?
As an artist, you no longer remain bound to the dynamics of intermediary institutions such as Record Labels and Publishers.
The sob story of artists barely breaking bread in terms of the low royalty payouts by streaming platforms is a well-documented tale 📝
However, such a tool that lets them skip middlemen and directly raise funds from their biggest fans, in exchange for letting them get a piece of the artists’s earnings is a pretty cool way for artists to de-risk themselves, and share the upside with their fans.
At this point you might ask, all of this sounds neat but who actually ensures that the royalties from the artist flow into the user’s bank account/crypto wallet?
Trying to find the answer of the same- I did some digging around but could only find a sample contract agreement on Royal’s Reddit page, which outlined the terms for the holders of the tokens to get a piece of the royalties.
If you want to spoil a perfect Friday morning with legal jargon- check it out here
TLDR: The contract is around DJ 3LAU’s drop on Royal in late 2021- which allowed 333 token holders to get 0.15% of his streaming revenues, for the song he put up for sale titled ‘Worst Case’
However, the website does not yet mention the specifics of money flow, or the process of claiming the royalties once they have accrued.
Our take on this?
Like a lot of startups in this space, Royal is aligned to solve the problem of getting artists to monetise their work in a better way.
And they’ve got serious backing too. Last November, they announced a $55M round of funding, not long after their $16M seed round, including renowned VC’s such as Andreessen Horowitz, Founders Funds and Paradigm, along with artists like The Chainsmokers, Nas, Logic and Kygo.
With money in the bank, institutional backing and a founding team with experience in the music industry (DJ 3LAU), and of building startups ( co-founder Justin Ross previously started OpenDoor), they have a pretty good chance of making this work.
And if this week’s response to their Nas drop is anything to go by, the market clearly wants this 🤷♂️
However, it remains to be seen what Royal’s future roadmap looks like. Letting artists offer their fans a chance to invest in earnings sounds great, but at the end of the day- the earnings are still being driven by the existing streaming platforms and their minuscule royalty rates 💵
Even if you’re an independent artist and drop your songs as NFT’s on Royal, the streaming royalties that are accrued via Spotify, Apple Music and other such platforms, where music is actually consumed, will be shared with the fans.
The pie remains the same, it’s just that the distribution of it is being split 🍰
Now that might be great for someone like Nas, who has a pie big enough for a lot of people to come in; but your average artist trying to break out from his garage band, might have a tough time generating enough traction for people to invest in him.
At the end of the day, breaking down the Algorithm wall of Spotify, Apple Music and YouTube, and letting artists build their distribution of music and monetise it on their own terms, is something which will help increase the number of artists that are breaking out from the deluge of 60,000 odd songs posted everyday on streaming platforms 🎵
This is something that we at Incentify are trying to solve, and as part of this vision, our first product is a Social Network for Music, that lets users share and discover music based on other users with similar tastes, and not machine-learning algorithms.
If you’ve been frustrated with sharing song links back & forth on messaging apps, or bored with the recommendations thrown by streaming apps, you’ll love what we’re building ⏭
DM us on Instagram or Twitter, or simply Sign Up for Early Access right here
Have a good weekend folks 🤘🏻
Originally published at https://incentify.substack.com on January 14, 2022.
