The image is from thechorus image on thecdn.vox-cdn.com.
3LAU performs in New York City.
Brian Killian is the photographer.
Cryptocurrencies are a technology in search of a problem. Why not use a database instead of putting everything on the ledger? Skeptics think that everything else in the space looks like noise, because of a bunch of grifters and try-hards changing their profile pictures to make them look like punks and apes.
Even as my mentions and direct messages fill up with readers fulminating about the topic, a paid subscriber wrote to me telling me he hopes that I die! It's like a video game that pays you to play. A series of free NFTs that are assembling themselves, based on the wishes of their owners, into movies and games.
A group of thousands of people found out this week that they were at a structural disadvantage when they tried to buy the Constitution. The winning billionaire outbid them after the auction started, as they had to convert their contributions from ether to dollars before the auction began. The fact that ConstitutionDAO participants largely lost their refunds to network fees is worth noting, too, and I have come to think of it as the world's worst computer.
Good and useful new things keep revealing themselves. Royal is a startup that hopes to upend the traditional relationship between music labels and artists, with potentially significant implications for the kind of culture that gets created.
Everybody hates record labels.
If you know anything about the relationship between record labels and artists, you know that they tend to get the worse end of the deal. Mega-stars are rare, and so record labels hold on to as much of their earnings as possible to finance all the swings they take and miss. To maximize their profits. This is a source of frustration for a lot of people, but especially the mega-stars, some of whom become famous in part due to their displeasure with labels: Prince wrote "slave" on his face to protest his treatment at the hands of Warner Bros., and Taylor Swift is now
Before the year 2000 the labels had all the power. They had the money and relationships to promote records and CDs. Occasionally, an alternative artist would start their own label. The major record labels were in charge of the industry.
Then came the internet. It was thought that file-sharing services might kill off the major record labels. The rise of streaming services like Spotify helped the labels make their existing back catalogs more profitable. The good news for the record labels was that the tensions with artists remained. Majors are making record profits, while most artists make almost no money from streaming.
The internet knows a vulnerable middleman when it sees one, and few middleman look more vulnerable than record labels.
The royalty comes for the royalties.
Before he set out to change the record industry, he learned how to be an artist. His name is 3LAU and he is a producer of electronic dance music and original tracks for artists like Ariana Grande.
He launched his own record label. He had met the Winklevoss twins, who had reinvented themselves as tHe Social Network fame, a couple years earlier. They like dance music. They are billionaires now.
The twins shared a vision for a way to create a transfer of value anywhere in the world, and that's what inspired Blau to back them. He began to think about the implications for music after the rise of the digital currency. The smart contracts that are part of the ethereum platform felt like they could be a building block for something new.
By selling ownership directly to fans, he generated more than any record label could have.
It was put into practice earlier this year. In February, he sold a lot of his albums in an auction. The auction generated $11.7 million in sales. The early hint of how the blockchain could change the music industry was offered by this.
Royal is a startup whose name hints at its core purpose. After selling his own album, investors lined up to give him money. He raised $16 million for a platform that would allow other artists to sell ownership stakes to their fans. Danny Nelson described the process at CoinDesk.
The system is underpinned by limited digital assets, according to a call.
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An artist decides how much of his or her royalty share to reserve for fans and how many official editions to mint for a song. Royal helps the artist by generating cash and the possibility of future income from the song owners.
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A song with 100 official editions might entitle each holder to a small amount of royalties.
The idea is to take the traditional model of the record industry, in which the label might keep 80% of future royalties, and flip it to one where the artist keeps 80%. The company said that it takes a cut of primary and secondary sales that is less than 10 percent.
NFTs allow you to buy and sell ownership of unique digital items and keep track of who owns them. NFT stands for non-fungible token, and it can contain anything digital, including drawings, animated GIFs, songs, or items in video games. The NFT can be one-of-a-kind, like a real-life painting, or one copy of many, like trading cards, but the blockchain keeps track of who has ownership of the file.
Nyan Cat and the "deal with it" sunglasses are being put up for auction, as NFTs have been making headlines recently. There is a lot of discussion about the massive electricity use and environmental impacts of NFTs. If you still have questions, you can read through our FAQ.
The platform was tested this summer by giving away 333 NFTs, representing half of the streaming ownership in his new single. The songs have generated more than $600,000 in sales and are worth more than $6 million.
Four months after Royal raised its seed round, investors are even more excited. Royal had raised another $55 million, with new investors including The Chainsmokers, Nas, and Kygo.
In an interview this week, Blau said that he thought we were scratching the surface. He was in true rock 'n' roll fashion, by going in from a boat. Culture always leads in a lot of ways with creativity. We are starting to see creatives buy into this.
The future of music.
Royal is so young that it is impossible to guess at its chances. It isn't alone in its space, either: competitors with a similar take include Royalty Exchange and SongVest.
It doesn't feel too early to ask what might happen in a world where artists keep more and more of the value that they create. This is relevant to me as a creative type who stepped away from a major job at a big publication in favor of selling my work directly to readers. The larger cultural consequences could be significant.
On Tuesday morning, I had a conversation with Fred Ehrsam and Blau about the possibilities. Ehrsam is a co-founder of the firm. He co-founded the company and served as its president until he left to start a new company.
Ehrsam told me that the potential for more consumer applications of tHe technology have been apparent. They have only recently begun to come into view, with NFT-based projects leading the way.
Ehrsam said that he had been waiting for this moment for years.
Some of the possibilities that Ehrsam and Blau see if more artists use cryptocurrencies to sell their work.
Artists own businesses on the internet. The most obvious implication is not all that new. Many artists create businesses to publish albums, organize tours, and so on. The record label doesn't need to be a part of it. This is important for a lot of reasons, but perhaps the most important is that.
You help the creation of different kinds of music. There are many stories of record labels not recognizing the genius of their talent. I am trying to break your heart is a documentary about the rejection of Yankee Hotel Foxtrot and the band's struggles to release it anyway. There are stories about the consolidation of the radio industry.
Royal suggests that the radio station and the label opinion is about to matter less. You can make a living off music if you grow a large social following. This is true today, but mostly to musicians who can live off touring and streaming revenue, at least compared to the number of creators who make a living off.
In the past, we have seen this with other new internet platforms, where you end up getting all these creators, and all this novel content, that you never would have gotten without the platform. I think something similar can happen here.
You promote culture. Some of my favorite music of the past couple decades involves remixes that are not allowed by music labels. The Beatles White Album and Jay-Z's Black Album were both created by Danger Mouse. Girl Talk was able to make a career out of throwing dozens of songs into a blender and stitching them together into spectacular new tracks.
For the most part, record labels have never embraced this kind of remixing. It is difficult given byzantine copyright arrangements.
Imagine if an artist could buy into a song and then make money from the success of the remix by purchasing some of its token on Royal or another platform. The right incentives are now aligned. The owners get paid when the creators create. They are the same people.
You change the music. Music collections used to be a source of pride for many people. They're still to vinyl collectors. Music fans are encouraged to think of themselves as art connoisseurs.
When I was interviewing one of our new hires, he said that we all have the same music collection, and then he held up his phone. And he is right. There is nothing special about that. We are about to see that scale in a really big way, with Royal being the music end of that.
Fans become marketers. Today's internet has created a lot of big fandoms, who work in exchange for likes, comments, and shares. It is possible that your favorite artist will reply to you or share one of your posts.
Royal raises a question about what will happen if every song has its own stans who benefit financially the more it is played.
You want to spread the word about it. I think we will see that with music as well.
Ehrsam said that your fans become your biggest promoter. In the past, we have seen that with Bitcoin. You want to spread the word when you own it. I think we will see that with music as well.
New kinds of creative work from fans are predicted by Ehrsam. Who knows about fine art, video pieces, mixed media. Fans with ownership would benefit from its growth in value.
He thinks that people will figure out other things to do with it now that they have ownership.
The criptocurrency enters the mainstream. Ehrsam believes that in 10 years or so, almost everyone will own at least one NFT. He says that music rights could be one of the things that gets us there.
Ehrsam said that culture and investing are becoming the same. He said the mania for meme stocks was more about building fun online communities than it was about financial gain.
He said that what Royal and Web3 are doing is exactly that. It is packaging entertainment, community and economics into a single thing. I think that will be very powerful.
You could also take a more pessimistic view. I think I tried to pitch Royal to the Sex Pistols in 1975, only to have Johnny Rotten punch me in the face. What could be less punk rock than giving every song to its own homeowners association?
It is clear that the record industry is not working for most artists. Even if Royal is only able to push labels into offering more lucrative deals, it still may be worth it.
Major artists will begin selling on Royal in the future.
The bad record deal is the enemy of Royal. Not every record deal is bad. Many of them are.
