Making a Scene Takes a look at Royal.io
It has become clear that the future of the music industry is heading towards a decentralized financial system that has risen as a result of one of the most revolutionary developments in digital technology, The Block Chain! The Block chain is what is going to give artists control over their music and the revenue that it generates. It is the block chain that has given rise to smart contracts and Non Fungible Tokens (NFT) that allow content creators to sell digital collectables or even real world items. It is the Block Chain that will be fueling the most innovative and disruptive platforms and applications that content creators have ever seen!
Last week we took a look at Audius (See Audius – Blockchain Streaming – Spotify Killer?) a block chain based streaming platform that promises to pay artists up to 90% of all generated revenue as well as being fully transparent as to how those funds are distributed. This week we are taking a look at Royal.io an NFT based platform that allows fans to invest in artist’s songs and reap a portion of the royalties from them!
What is Royal.io
Justin Blau (3lau, a pioneering EDM DJ) and Justin Ross (Opendoor co-founder) co founded Royal.io on 8/27/21. Royal is looking to disrupt the music industry as well as reshape the music industry’s business model. Royal.io allows artists to connect directly with their fans and sell them certain rights to their songs. They can control what rights are given within the NFT as well as other perks they may want to attach to the sale.
Royal is creating mechanism that will allow anyone to purchase the ownership of music directly from the artist that makes that music. When a fan has a percentage of ownership in an artists music they have a vested interest in the artist’s success. The Fan is incentivized to Stream it and be a tastemaker and share it.
Fans will not only be able to invest in the music and artists they love, but they will also own a percentage of the rights to those songs. They also have will receive limited edition, autographed NFT’s (Non Fungible Tokens) recorded on the blockchain. The Fans get to participate in the financial side of the consumption of music by earning royalties along with artists and reaping the benefits as the music increases in popularity.
How it Works
The Artists can choose what percent of the song’s royalties to put up for sale and they can also bundle additional perks, fan experiences, special tracks, digital art, etc. The Fan can purchase these royalties in the form of ‘tokens’, directly from the artist. Any extra bundled benefits are then attached to that token. Once the fan has purchase a token, they can claim royalties for the song after they’ve accrued. The time to payout will vary depending on the artist.
Both the fan and the artist can then put the token up for sale on an NFT exchange. When someone else buys this token, they’ll get all the royalties and additional benefits that come with it.
The Nas Example
On Jan 11 2022 NAS will release two songs on Royal.io for fans to purchase a percentage of the “Streaming” royalties. In addition they owner will have use rights of the song for non commercial use (basically the same rights you would have if you purchased a CD or Download). The percentage could be as low as 0.15% and as much as 1% for a total of 50% of the total “Streaming Royalties. This does not affect the artists Publishing, Songwriting or mechanical royalties, not does it affect any payment or Royalties from sync license. NAS retains all his rights to the song and is only selling a percentage of the revenue that is generated through streaming. If you remember Nas is also one of the investors in the “Audius” block chain streaming platform.
Each song has 3 tiers of investment with different perks and percentage of the streaming rights.
Tier 1 – GOLD – $50 – with 500 tokens minted where you receive a percentage of the songs streaming royalties plus membership to Discord “Hip Hop 50” and access to Sweet Chick’s Secret Menu Total $25,000
Tier 2 – PLATINUM – $250 – With 250 Tokens minted you receive All of the Above plus some Exclusive Merch Total $62,500
Tier 3 – DIAMOND – $4,999 – With 10 Tokens Minted You Receive all of the Above plus 2 VIP Concert Tickets, Exclusive Signed Vinyl, Video Conversation with Hit-Boy Total $49,000
When you add up all the Monies for these “Tokens” it comes to a Total $137,490
Tier 1 – GOLD – $99 – with 700 tokens minted where you receive a percentage of the songs streaming royalties plus membership to Discord “Hip Hop 50” and access to Sweet Chick’s Secret Menu Total $69,300
Tier 2 – PLATINUM – $499 – With 400 Tokens minted you receive All of the Above plus some Exclusive Merch Total $199,600
Tier 3 – DIAMOND – $9,999 – With 10 Tokens Minted You Receive all of the Above plus 2 VIP Concert Tickets, Exclusive Signed Vinyl, Video Conversation with Hit-Boy Total $99,990
When you add up all the Monies for these “Tokens” it comes to a Total $368,890
When you add both songs Nas is looking at $568,490 for 50% of his streaming royalties on 2 songs! That is over a half a million dollars of upfront money plus up to 1,160 fans that will not only benefit from his success, but they are also going to be willing to help promote and distribute the music.
If you are paying attention, you will be able to see that this Block Chain technology will make the days that record labels and many of the middle men, control on the music industry’s revenue stream are numbered.
Many of these companies are in their infancy, and we are on the doorstep of this new technology taking over many of the content creation industries including the music industry. The Royalty sharing model, is a great idea both for major artists but also for indie artists. It is a great way to mobilize your fanbase and give them a direct connection between them and the music by giving them a vested interest in it’s success. Also because they are based on the NFT the artist can embed a percentage on all resale of the NFT in the future to be paid back to him. Now, Royal.io is not the only company that is creating a platform that artist can sell certain rights to songs to their fans. I choose this one to talk about because of the major investment that they have been able to raise (over $55 Million) and the artists that are investing their art and money into this platform as well. Nas being a major supporter of both Royal.io and Audius.co. A couple other startups that are working on allowing artists to sell their song royalties is Royalty Exchange and SongVest. Both of which are also worthy of checking out.
The biggest drawback I can see on the onset is the royalty payouts will be totally dependent on the artists being honest and making sure he/she makes the funds available for the investors. But, as we move more towards the blockchain based streaming networks, the smart contracts can and will make sure all monies will be distributed immediately to both the artist and the investors as the music is being streamed. In addition the revenue that is going to be generated will increase significantly because the content creators will be entitled to up to 90% of the generated income from these blockchain streaming platforms. This will be a really important for the consumer to have confidence in this business model as we move into the future.
The Bottom line is we are going to be seeing a huge revolution in not only the music industry but any industry that is centered around content creators. The Impact it has on the industry will be wholly dependent on how much disparity there is in that industry. With the Music industry only paying the content creators approximately 12% of all generated income with the bulk being grabbed by middle men and record companies, I believe that it will be one of the biggest shakeups of any of the content creation industries. You as an artist/content Creator needs to make sure you are informed and ready to take advantage of this new technology. We at Making a Scene will make sure you have the resources available to make sure you are prepared!