DJ Justin Blau was opening the door to fellow superstar Avicii on the beach in Mexico when he met the Winklevoss twins who introduced him to Bitcoin. “I couldn’t get any more clichés,” he said of a 2014 meeting with Harvard’s classmates at Mark Zuckerberg, who later became a blockchain evangelist.
As a college student, Blau quit his financial research and declined an internship at the asset management company BlackRock to pursue his DJ career. A few years later, he combined his two interests in music and finance to enter a business aimed at disrupting the record industry through blockchain technology. On Tuesday, he worked with popular electronic musician Diplo, his longtime friend, to sell 20% of the song’s streaming usage to fans in the form of digital tokens.
“I’m just fascinated by the idea that ownership of music is valuable,” Thomas Pentz, known as a professional diploma, told the Financial Times. “The more people behind your record, whether you’re a tech fan or an investor, the better it’s to have more people on your team.”
In recent months, the hype surrounding Web3 (the repetitive buzzword of the Internet using decentralized blockchain) has swept the music industry, involving the world’s largest music companies in competition, and non-fungible tokens becoming a new source. I am fueling the hope. Of money for musicians.
To sell NFTs, musicians assign their songs, videos, or other media to digital tokens. Tokens are sold through online auctions activated by blockchain technology that keeps a record of transactions. NFTs can be used not only to sell songs and images, but also to sell benefits such as behind-the-scenes passes and meeting with stars.
There are many examples of turning your head. February Rapper Snoop Dogg sold NFTs connected to Back of the line of deathHis latest album is reported to have sold over $ 40 million in just five days. DJ Steve Aoki claims to have made more money through NFTs than a decade of progress from record labels.
“Some of these ratings are out of control. As an investor, I see it a lot and sometimes have to laugh,” said a senior executive at a major music label.
However, after being knocked over to the Internet by the advent of file-sharing company Napster 20 years ago, major music companies are now aiming to actively participate in the market ahead of technological changes.
Universal Music, the group behind Taylor Swift and Drake, has partnered to create NFTs for artists, including a virtual band featuring characters from the Boring Ape Yacht Club, as well as rivals Sony and Warner. It is tied.
After spending more than $ 500 million to buy the copyright for Bob Dylan’s songbook, Universal and Sony are now working with musicians to sell Bob Dylan NFTs. Spotify plans to add blockchain technology and non-fungible tokens to its streaming service, FT reported earlier this month.
Jonathan Dwarkin, Senior Vice President of Digital Strategy at Universal, said: “Now that the smoke is starting to disappear, there are some really interesting opportunities … There are real income opportunities,” he said, pointing out how tokens connect fans and artists directly.
But so far, most music NFT participants are crypto enthusiasts rather than regular fans, the market is small, and last year’s key sales were only $ 83 million, according to the industry blog Water & Music.
There are many skeptics. “It feels like the music industry is desperately looking for ways to insert themselves into NFTs without actually thinking about it. What are the underlying use cases?” Mark Midia Research analyst Mulligan said.
Mulligan argued that it was hypocritical for musicians to sell streaming royalties to their fans after years of complaining about the small payments the artist himself received for streaming royalties. “If you sell a portion of that fraction to someone and charge a lot of money because it’s an NFT, you don’t know how it would be a valid investment.”
Diplo argued that it was a good investment for music lovers. “For fans, all you can do is buy merchandise, you can buy concert tickets .. But in reality, this is what you are a fan of. You are thanks to music I’m a fan. ”
According to market tracker Nonfungible.com, most of the $ 17.7 billion worth of NFTs traded last year were for visual arts, games and collectibles. The NFT market itself is showing signs of slowing as daily trading volumes on NFT’s largest market, OpenSea, have been declining since the beginning of the year, but see music as a ripe space for the outbreak of the year. There are also people.
Royal, Blau’s company, is one of the most prominent music blockchain start-ups aimed at revolutionizing the industry. Through Blau’s personal connections and Silicon Valley optimism about blockchain, Royal has secured $ 55 million from investors such as Andreessen Horowitz and Peter Thiel without creating a pitchbook.
Blau, who sold $ 12 million in NFTs attached to his songs last February, wants to expand into a business where ordinary fans can own music, “not just for record labels, private equity and hedge funds.” I am.
Remember My Love: Music Digital Tokens by Numbers
0.004% of streaming usage fee
0.05% of streaming usage and more music
0.7% of streaming fee and meeting with Diplo
For example, in a project with Royal’s Diplo, fans have the option of paying $ 99 for tokens worth 0.004% of the streaming fee for the first single of the recently released album, “Do n’t Forget My Love.” It is provided. For $ 999, you’ll receive 0.05% of royalties and an “exclusive DJ mix,” and for $ 9,999, you’ll receive 0.7% of royalties and a concert meeting with Diplo. These tokens are not the same as owning the copyright of the song.
Asked if this is a good investment for fans, Blau said ownership has an emotional attachment and could bet on the artist’s success before becoming a star. “In real estate … If you own a house, you have rental income and you have a real rise in assets, right?” He insisted.
Another long-time music label executive mentioned the suspicious investment value of streaming royalties, saying that some of these projects “did not hit because people were concerned about the exploitative nature.” I did.
“Many critics say that only the rich white man is doing this and pushing up the price of NFTs.
“But I don’t think we can underestimate the evolution of technology,” added executives. “We’ve been in the playlist world for the last 10 years. I think blockchain tokens will be the basis of our world in 10 years. If that’s not true, don’t look back on history. Hmm.”