Nas and The Chainsmokers Join $55M Raise in NFT Music Platform Royal
NFTs are shaking up the world of art and video games. But it may be the music business where NFTs (non-fungible tokens) are poised to have an even bigger impact—potentially transforming an industry that critics say has long benefited lawyers and middlemen at the expense of musicians.
Royal is a blockchain startup trying to bring about such a change. Launched this summer by Justin Blau—better known by his stage name DJ 3lau—Royal helps artists create and sell NFTs, but also offers a new business model where fans can invest in an artist's work and receive royalties in return.
Blau tested the concept this summer, releasing 333 NFTs that represented 50% of streaming ownership in his new single. According to Royal, the experiment was a smashing success as tokens in the song are now worth over $6 million and have resulted in more than $600,000 worth of trades on the secondary market.
"I wanted to prove the market for this existed. Until now, NFTs have just been collectibles," Blau told Decrypt, saying he distributed the 333 NFTs for free to fans, and that those who "invested with their attention" now own assets worth over $8,000.
Blau added that Royal intends to open its platform to many more artists and plans to let fans choose to invest in 1,000 songs by next year.
Royal funding attracts celebs
Even though the company is barely four months old, Royal has already received major interest from investors. On Monday, Royal announced that it has raised $55 million, which comes on top of the $16 million seed round it pulled in August.
Royal's investors include familiar names from blockchain finance, including Andreessen Horowitz, Coinbase Ventures, and Paradigm. But the new round also includes some celebrity cachet as musicians The Chainsmokers, Nas, and Logic & Kygo chose to back the project too.
But while Royal's premise is tantalizing—fans fund their favorite artists and receive a portion of royalties—it remains to be seen if the platform can replicate its initial success at any significant scale.
Music copyright is notoriously complicated and has been the subject of bitter and costly lawsuits for decades. Royal's model of cutting out middlemen and using
Those include how much control the artists will retain over their songs, including their use by third parties like politicians or advertisers. It's also unclear how accessible the NFT process will be to ordinary fans, who may find it difficult to navigate the world of blockchain, wallets, and royalty payments. And then there is ongoing regulatory uncertainty as the SEC takes the position that most cryptocurrencies—possibly including NFTs—are securities and that permission from the agency is required to trade them.
According to Blau, artists will be able to retain creative control over their songs even while sharing the financial proceeds with fans. But he also acknowledged that the intersection of NFTs, copyright, and music is new terrain for lawyers and that it could take time for firm rules to become established.
In the time, Royal is going full speed ahead powered in part by what Blau describes as enormous support from other musicians, including numerous high-profile ones.
"The value of music ownership is vastly misrepresented and undervalued today, but it won’t be for too much longer, as more musicians embrace the web3 ecosystem," Blau wrote in a recent blog post describing the emerging NFT era.Source