Non-fungible tokens are already beginning to reshape ownership on the web as we know it. NFTs are blockchain-based records that can be digitally scarce versions of, well, anything — and are especially compelling for media assets. They’re poised to give a new generation of content creators ownership and agency over their careers and reshape the economic relationship they have with their supporters. Communities of “true fans” are using NFTs to connect on shared interests, and in some cases even forming economically-empowered organizations where many can benefit from community growth.
What’s so exciting about all of this is how much better it is for the consumer and the creator when the internet becomes ownable. When consumers truly own their digitally-scarce items—art, collectibles, music, books, membership to a club, in-game items—they have more control over their digital lives and if the asset appreciates, may even be able to earn real money along the way. They can avoid the walled-garden limitations of central platforms that control where, when, and how to experience their items. And it’s not just consumers whose experience may be improved. Creators can program NFTs to benefit from future transactions of the work they create, establish direct relationships with their communities, and avoid intermediaries taking such a large fee. Look no further than the way NFTs have transformed the art world over the past year and you can see why we think web3 will dramatically change the business model for consumers and an even broader set of content creators.
So what are NFTs going to shake up next? We think music is an obvious category since some of the most passionate, dedicated communities have music at the center. The internet has seismically transformed certain aspects of the music industry over the past 20 years (artists can get discovered more easily through self-publishing on YouTube or SoundCloud, and anyone with a mobile device can access the music they love from almost anywhere in the world). Yet, for all those advancements, the economics between the industry, the artist, and the fan have mostly remained the same. Today there are more than 8 million musicians on streaming services, yet fewer than 0.2% of them make more than $50K a year.
Many know the feeling of discovering a new artist or band, only to see the fan experience degrade as they grow in popularity. Merchandise is more expensive, tickets get costlier and harder to come by. Artists also have no way of knowing which fans were in the early group that propelled their career forward, which they might well want to know not only from a brand perspective — understanding who the true believers are — but also to reward them with early access to shows, merchandise, or VIP pricing. NFTs have the potential to change this.
Royal is a platform designed to allow music fans to support their favorite artists and connect with them in ways previously not possible. The founders of Royal envision a future where artists can layer NFTs with value that includes opportunities to attend live and virtual events, access to exclusive communities and merchandise, and more. Most profoundly, they’re unlocking additional revenue opportunities for artists beyond streaming. Musicians can receive support from fans early on in their careers, with fans then being rewarded for getting in with artists on the ground floor. Royal is building a music service that in the past would’ve only been a pipe dream — letting fans participate directly in their success.
Last month, in a test of concept, Royal and DJ 3LAU gave away digital assets representing 50% streaming ownership in 3Lau’s latest single. Within the first two weeks, the song reached a value of over $6 million. It’s early, but this illustrates that the market values music rights and connections to artists in a way that centralized platforms can’t fully address.
In addition to their audacious vision, what makes this founding team so unique is 3LAU’s firsthand experience as a musician paired with JD’s exceptional track record as a repeat founder and startup operator (he co-founded Opendoor and has been a venture investor for the last few years). I come away from every conversation with them even more inspired by what’s to come. Welcome Royal!
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