There has been quite a bit of news lately about NFTs, or non-fungible tokens. They first entered the mainstream vocabulary in March 2021, when a digital artist named Beeple sold an NFT for $69 million at Christie’s, the esteemed art auction house.
In simple terms, NFTs are digital collectibles that trade on the blockchain. NFTs, which people think about in connection with image and video files, are also taking off in the music industry. The new technology has captured the attention of artists such as Grimes, who has sold tokenized versions of her tracks. NFT sales have generated millions of dollars in extra revenue for musicians.
Royal: A New Platform for Music Artists Using NFTs
Royal.io is a platform that sells song rights as NFTs. It has created a marketplace that enables users to buy NFTs of songs and musicians to earn royalties as their songs increase in popularity. While several platforms have sprouted up for visual artists to list their digital works on the blockchain, there are not many NFT platforms primarily focused on music.
The startup raised a $55 million Series A round in November 2021. Investors in the NFTs included electronic music performers The Chainsmokers and rapper Nas. Andreessen Horowitz (a16z) led the Series A round. Paradigm and Coinbase Ventures participated in it. Less than three months ago, Royal raised a $16 million seed round led by Paradigm and Founders Fund. The latest funds will push the platform’s continued growth. Royal is expanding its offerings of both household names and rising newcomers.
Audacious Vision by Cofounders Blau and Ross
Royal is headed by Justin Blau, a business school dropout who became an EDM artist. Better known by his stage name 3LAU, Blau is a well-known figure in NFT circles. He has launched several efforts to help musicians monetize their art using blockchain and crypto markets.
JD Ross, co-founder of Royal, has leveraged his entrepreneurial background to help Royal expand quickly. Ross previously co-founded Opendoor, a home-buying startup backed by SoftBank.
“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,” a16z General Partner Katie Haun stated.
Part of Blau’s motivation came from his personal experience. As the pandemic brought the music touring business to a halt, he explored how NFTs could empower creators and make up for lost earnings. Blau believes NFTs can help shift power dynamics away from record labels and platforms. NFTs can forge a path for musicians to create revenue streams to monetize their work. Connecting artists with fans as royalty owners increases fan loyalty and aligns incentives.
Just weeks before the widely discussed Beeple sale at Christies, Blau made $11.7 million from selling a batch of custom songs and artwork. Royal has leveraged Blau’s music and status in the music industry to onboard new users to its platform. Co-founder JD Ross also adeptly taps his network to attract new investors.
NFTs Could Revolutionize Music Industry
An essential characteristic of NFTs is their uniqueness. No two NFTs can be identical. The use of smart contracts and the blockchain make NFTs highly versatile. A digital receipt ensures there can only be one authentic owner of a given NFT.
NFTs have the potential to revolutionize the music industry, and Royal intends to be a key player in that transformation. The Chainsmokers, an electronic duo, said, “We believe blockchain technology has the ability to transform music ownership the same way the internet has transformed the way music is listened to. At the dawn of Web3, Royal’s model of modernizing the way we collect and share music made perfect sense to us as musicians and investors—we had to get involved.”
The hip-hop artists called Logis said, “When Justin told us about Royal and how artists can share rights to their music directly with their community, it just clicked.”
Royal has grown at a pace beyond expectations. Since the seed round in August, Royal has reached over 120,000 sign-ups. CEO Justin Blau is confident Royal’s business model is growing while staying in compliance with the law. The regulatory environment surrounding crypto and the NFT marketplace is rapidly shifting, but the startup team is working with legal counsel to stay make sure Royal avoids violating securities laws or other regulatory frameworks.
Royal is optimistic that democratizing access to music rights through the NFT marketplace will benefit artists and fans alike. “A true fan might want to own something way earlier than a speculator would even get wind of it,” Blau said. “Democratizing access to asset classes is a huge part of crypto’s future.”