NFT for copyright: why non-fungible tokens could transform who gets paid from music rights, and how
Non-fungible tokens (NFTs) are all the rage in the music industry right now.
DJs like 3LAU and Steve Aoki have sold theirs for seven-figure sums. Kings Of Leon has just accumulated around $ 2 million by selling them with their new album. And, still the author, Grimes recently sold a bunch of NFT-affiliated artwork for around $ 6 million in just 20 minutes.
The dirty little secret of these transactions? People buy unique digital collectibles, but they don’t buy any underlying rights. And since most digital arts (including music) can be easily reproduced with a swipe of an iPhone, questions are increasingly raised about the uniqueness of the assets that large amounts on NFTs secure. Actually.
Like Pitchfork described earlier this month: “Born from the world of visual arts, NFTs create an inherently artificial sense of scarcity – the token is rare, not the artwork itself.
All of this may be about to change.
Bluebox uses the blockchain to record full or partial ownership of recorded music and / or publication copyright, and allocates royalty payments accordingly. Ditto believes the platform will result in “higher collection rates [while] massively reduce the loss of income that artists are currently undergoing ”.
NFTs are the last piece of this puzzle. This Thursday, March 18, the British artist Big Zuu is sell 75% of the rights to a song from his next album, split into several different tracks and wrapped in NFTs.
Another Ditto-affiliated actor, Taylor Bennett – brother of Chancellor ‘Chance The Rapper’ Bennett – is selling 75% of the rights to an upcoming recording, also through separate NFTs.
The two artists retain 25% of their respective copyrights.
According to Lee Parsons, co-founder and CEO of Ditto Music, it gets interesting after NFT’s sales end. Because it means that multiple people will be able to automatically collect digital royalties on their share of that music, through Bluebox.
“This year, Bluebox is launching both a copyright exchange and an IRO platform ‘initial launch offer’,” he explains. “Similar to sites like Polkastarter or Coinlist – where blockchain projects harness the power of the community to fund initial offerings – Bluebox IRO will allow artists to pre-sell music to a community who can then own a work of their art. , as NFT. “
For discerning collectors, this creates the possibility of buying “shares” in an artist’s work even before it is published – also creating an alternative source of funding for the artists themselves.
“To our knowledge, this is the first true NFT under musical copyright.”
Lee Parsons, Bluebox / Same
NFTs, Parsons says, are the missing component to make this process run smoothly.
“To our knowledge, this is the first true copyrighted NFT of music,” Parsons says of upcoming Big Zuu and Taylor Bennett sales. “As a true NFT copyright, both the creators of these copyrights and their NFT investors will receive monthly royalties from streaming stores through a Bluebox wallet.
“For the moment, this is only possible on the architecture of Bluebox. NFTs will also be eligible to trade on the next Bluebox NFT exchange. “
According to Parsons, this is just the beginning of Bluebox’s potential.
“What we’ve created here is ultimately a way for thousands of fans to invest in music as an asset,” he says. “I’m looking at what 3LAU has just achieved with the NFTs, thanks to a clearly dedicated fan base; if his fans pay millions to own an exclusive copy of his music, how much would they be willing to spend to own a track from his catalog? “
Parsons adds, “There are a lot of headlines revolving around NFTs right now, but deep down, they’re just token assets.
“We expect you to see more assets symbolized as [house] properties entering the market soon. Realistically, you’ll soon be able to trade in your music copyright NFT – as long as it’s worth it – for property. This eventuality is much closer than people realize.
“If 3LAU fans pay millions to own an exclusive copy of his music, I wonder how much would they be willing to spend to own a track from his catalog?”
Bluebox was built on the R3 Corda block chain, which has gained a reputation as the blockchain trusted by some of the world’s biggest banks, partnering with clients like Microsoft, Natwest and HSBC.
MBW heard from sources in the blockchain world that R3 is an investor in Bluebox, after joining a seven-digit round in the platform last year alongside Kosmos Capital. Parsons won’t comment on this suggestion, but confirms that this round of investment gave Bluebox a valuation of $ 20 million before launch.
The way Parsons puts it, the combination of Bluebox and NFT could spark a copyright sales revolution among fans, who will be able to purchase song tracks and recordings before their favorite artist hits the big time. – and then reap the benefits of this investment. line.
He claims that, at the moment, such an “ecosystem” can only be achieved on Bluebox because the platform can handle not only the NFT associated with copyright, but also the resulting royalty payment stream. He suggests that this combination could also see Bluebox quickly become an important technology in proven high-priced evergreen copyright acquisitions in the future.
“This is the end of the majors, publishing rights organizations and the music industry as we know it.”
Taylor Bennett, artist and manager
Why, however, must these transactions rely on blockchain and NFTs, rather than trusted and traditional ‘Fiat’ currencies?
Parson replies: “In a nutshell, liquidity. Buying a copyright is very difficult. You need to know where to buy it; you have to spend thousands on legal fees; and you certainly can’t buy it in small pieces.
“In contrast, NFTs and blockchain make the asset liquid and easily tradable. It therefore offers the possibility of instantaneous transfer of ownership – a real first for the music industry. “
Taylor Bennett, who sells 75% of her copyright in music recorded this week via an NFT Bluebox, goes even further: “This is the end of the majors, publishing rights organizations and publishing rights organizations. the music industry as we know it. ”
Going forward, Parsons says he’s particularly excited about applying Bluebox and NFTs with Opulous, which the team behind Ditto launched last month.
Opulous is a Decentralized Funding (DeFi) platform that allows artists to guarantee loans against their past streaming income, with the copyrights they hold held as collateral.
Artists and other investors can also contribute funds to Opulous’ Music’s copyright pools (from which loan capital is taken), and they are told they can earn 10% per year on the funds. contributions they make.
“The Bluebox copyright management platform already provided the basics of the lending process in Opulous,” Parsons explains. “Now the platforms are even more integrated.
“Using Bluebox and NFTs, anyone who is not a musician can buy part of a copyright, then use the monthly income from that asset to earn interest. [via the Copyright Pools], or get an instant loan. “
He adds, “Opulous and Bluebox are closely linked to our vision for the next decade in the music industry. And this is a vision in which NFTs promise to play an important role. “Music company in the world