Non-fungible Tokens (NFTs) have seen a massive adoption spike across the realms of art and video games. On-chain music platform Royal has now announced that the company has managed to raise $55 million (roughly Rs. 409.7 crore) in Series A funding led by venture capital giant Andreessen Horowitz, also known as a16z. The startup collaborates with musicians and allows users to purchase NFTs, which represent a collective ownership in works by these artists. The Chainsmokers, Nas, Logic, and Kygo are among the musicians who chose to back the project along with a16z crypto.
The project is led by Justin Blau, an EDM artist performing under the stage name 3LAU, and JD Ross, a co-founder of home-buying startup Opendoor. Royal had managed to bring in $16 million (roughly Rs. 119.18 crore) during its seed round in August led by Founders Fund and Paradigm.
Over the past couple of months, Blau ran a test project during which he distributed 333 NFTs to fans through the platform which owned 50 percent of the streaming rights to a new single titled “Worst Case.” The startup claims there have already been nearly $600,000 (roughly Rs. 4.46 crore) in secondary sales for these tokens, giving “Worst Case” an implied valuation of $6 million (roughly Rs. 44.69 crore). Crypto-forward musicians like Blau have already cashed in millions of crypto holders looking to diversify their holdings through NFTs while supporting projects that expand blockchain market opportunities.
“We believe blockchain technology has the ability to transform music ownership the same way the internet has transformed the way music is listened to,” added electronic duo The Chainsmokers in a joint statement.
While Royal’s premise of letting fans fund their favourite artist and receive a portion of the royalties in return is promising. It needs to be seen if the company’s ability to scale its initial success. Music copyright is complicated and has been the subject of costly lawsuits in the past, that have gone on for decades. Royal’s model of cutting out middlemen and using blockchain technology to raise money directly from fans could make the royalty process less problematic, but there are pertinent questions that remain.
The biggest one is: how does Royal dictate the percentage of control owners will retain over their songs? This may prove a little difficult especially with third-party use and advertising while staying on the right side of the law.