Justin Blau, aka musician and producer 3Lau, got the music industry talking last year when he closed a $55 million Series A round for his blockchain-based music investment platform Royal.
Led by Andreessen Horowitz (a16z) the funding round attracted backing from superstar artists like Nas, Stefflon Don, Kygo, Joyner Lucas and Disclosure.
Royal’s Series A round followed its successful seed round in August 2021, which raised $16 million.
When Royal closed its Series A round, the platform said that it planned to use the funds to “invest in the growth of its ecosystem”, which allows artists to sell fractional ownership in their music through Royal’s own version of NFTs.
The company claims that it “proved its concept” in October 2021, after 3LAU gave away 333 limited digital assets (Royal’s extended version of an NFT) representing 50% streaming ownership in his single, Worst Case.
According to Royal, within the first two weeks, Worst Case reached “an implied value” of over $6 million with fans holding half of the value.
Since then, the company has worked with hip-hop legend (and Royal investor) Nas, who allowed fans to invest in his music on the platform by buying shares in the royalties earned from streaming for two of his tracks.
Superstar producer Diplo became the next big artist to team up with Royal to sell shares in his streaming royalties on the platform, following releases by two independent artists, Vérité in February and Ollie in March.
Last week, MBW reported that Darya Pourshasb, a former Sony Music executive and Spotify‘s Director, Premium Content Strategy, had exited her role at the music streaming giant to join Royal as Head of Global Artist & Label Partnerships.
According to Royal, Pourshasb will be focused on bringing a variety of new artists to the platform, ranging “from independent artists to icons”.
Speaking to MBW, Pourshasb noted that Royal is “creating a new revenue stream [for artists] and allowing for a deeper connection with superfans and new audiences”.
Royal CEO Justin Blau told us that Pourshasb’s decision to join the platform is “a testament to the promise of fan-held music ownership”.
Here, Blau tells MBW how Royal wants to be positioned in the music business, and gives us his predictions for the NFT space…
How do you feel Royal is positioned in the music business currently and how do you want Royal to be positioned in the near future?
This is just the beginning of an era where artists and fans see each other as partners. When a fan actually owns rights in an artist’s music, their incentives are more aligned to share and spread the word about that artist.
“I’m excited for Royal to be at the forefront of developing new technologies and creating new value for both artists and fans.”
We already see collectors celebrating their ownership, through social posts and also in person with friends. When I meet a collector in real life, it’s an entirely different type of connection.
I’m excited for Royal to be at the forefront of developing new technologies and creating new value for both artists and fans.
Royal has worked with Nas and Diplo so far, plus independent artists Ollie and Vérité. Tell us about the artists that Royal is looking to work with?
Ultimately, we’re looking to work with all types of artists – from known, popular artists to artists with loyal fanbases to up-and-coming artists who are early in their career.
“We believe Web3 will be a building block for every musician in the future.”
We’re starting with a curated group of artists but we’ll be expanding over time, and we’re grateful to have Darya [Pourshasb]’s expertise as we tackle this expansion.
One thing will remain constant: at Royal we care about proving our model for a wide range of artists because we believe Web3 will be a building block for every musician in the future.
Can you tell us about any releases in the pipeline?
I can’t give specifics right now, but we have a lot of really exciting names in the pipeline. Keep an eye on our website for updates on featured drops.
Why is the sale of fractional ownership of music/ a percentage of streaming royalties an attractive proposition for artists?
For artists, the value of Royal is really two-fold: First, it allows artists to maintain creative control over their music while fueling their careers. Second, by sharing music ownership directly with fans, they’re able to establish a deeper connection with those fans.
Music holds high emotional value, even more than visual art. So there’s something really special about being able to own a piece of your favorite song. That’s a connection that simply can’t be established through traditional models of music ownership and distribution.
Are there any risks involved for the artists selling fractional ownership in their music, and for the fans investing in the music?
When artists ask what considerations they should make, I always tell them to go in with the intent to build community, not to make money. That’s probably the biggest risk — going in with misaligned intentions.
Money is part of it too, but community has to be first, especially now when the technology and the opportunity are both so new. Fans are interested in investing for a range of reasons.
“When artists ask what considerations they should make, I always tell them to go in with the intent to build community, not to make money.”
For many, owning a piece of music they love is incredibly meaningful. It’s kind of dark but I think it’s cool so I’ll share it: When I think about the people who own pieces of my music, I sometimes think about how those people will continue to earn money as those songs stream, even after I am no longer alive. I don’t even have to be here for the people who supported me when it mattered to me to receive a payment of my gratitude.
Royal closed a $55m round with participation from a number of high-profile investors. Tell us about the significance of the round, and are there plans for additional funding rounds in the near future?
We were thrilled to close a $55 million Series A from Andreessen Horowitz’s crypto investment arm late last year. It was exciting to gain that much momentum so quickly after our seed round led by Founders Fund and Paradigm. Mostly, it showed us that people believe in the opportunity for crypto beyond visual art and gaming, and they see music as the vehicle to bring crypto to the masses.
What are your predictions for the NFT space generally – How big can the sector get?
We’re just scratching the surface of what’s possible, and at Royal, we believe the next frontier of NFTs is inclusive of IP ownership. Inevitably, this technology will disrupt all creative industries (and others as well).
What will need to happen for the NFT business to scale?
The first step is for more people to understand what NFTs even are. Non-fungible tokens are merely an underlying technology that helps to prove authenticity. There are countless cases for this technology.
“There are countless cases for this technology.”
Where we see opportunity to tokenize music royalties, others see promise in digital art. The more consumers and policy makers understand, the more this field will develop.Music Business Worldwide
