This system seems to bring in many fundamental questions regarding music ownership, especially in terms of copyright. If a fan is able to buy partial ownership of a song, does this make them a true co-owner of that work? Are they able to use and license the work legally as a true co-owner would? These were questions that came to my head, and I'm sure others felt the same when learning about this new royalty system. Once again, Royal attempts to alleviate these potential confusions by outlining the details on their website.
Each token on Royal represents a percentage of the royalties from streaming services, determined by which tier you purchase; a license for non-commercial use of the digital art associated with the token; and any additional perks that the artist chooses to include.
"It creates a structure where they now have skin in the game, they're keener on supporting and promoting you. Because in theory, the more people that know about that artist, the more your NFT is worth," John shared about NFT music investors.
So, in reality, NFTs in this sense can work similarly to buying stock in a company. While there is no technical ownership shift, Royal allows NFT to act as a license to utilize an artist's work and earn royalties through it. Regardless, fans are now able to watch their favorite artists takeoff and earn real money alongside them, which is something this industry has not seen before. While Royal represents a successful model within the NFT music world, there are many that have not quite measured up.
On one hand, platforms might use this new technology to profit off of work that is not theirs to begin with. Hitpiece
is a perfect example of where NFTs can go wrong. This site, now scrubbed of its content, was once an NFT buying and trading platform that essentially created NFTs from popular songs from artists on Spotify. The problem? The artists in question had no idea this was going on, and
they were not getting paid for any of the profits made from these sales.
Of course, situations like this premise valid concerns for artists new to the NFT world. However, there are many profitable ways artists can engage in this technology — without the fear of giving away rights or royalties to their music. John described in our interview how a great way for smaller artists to get involved in the NFT world is by "releasing small drops that are tied to a bigger release," such as an album or a music video in the form of an NFT. One artist that is capitalizing on this model is The Weeknd. He recently released several trading cards of tracks in the form of NFTs
, which were each signed by him and sold on OpenSea, the current largest NFT marketplace.