Non-fungible tokens (NFTs) are all the rage in the music industry right now.
DJs like 3LAU and Steve Aoki have sold theirs for seven-figure sums. Kings Of Leon has just raised around $ 2 million and sold it along with their new album. And as a writer, Grimes recently sold a bunch of NFT artwork for around $ 6 million in just 20 minutes.
The dirty little secret of these transactions? People buy unique digital collectibles – but they’re not buying underlying rights. And when you consider that most digital works of art (including music) can be easily replicated with the swipe of an iPhone, questions about the uniqueness of the assets actually backed up by splashing large sums of money on NFTs keep getting louder.
Pitchfork put it earlier this month: “NFTs emerged from the world of visual art and create a sense of scarcity that is inherently artificial – the sign is rare, not the artwork itself.”
This could change soon.
Bluebox is a suite of blockchain-based tools introduced by distribution and service company Ditto Music.
Bluebox uses the blockchain to record all or part of the ownership of recorded music and / or publish copyrights, and divides the royalties accordingly. Ditto assumes that the platform will lead to “higher collection rates” [while] massively reduce the loss of earnings of the artists ”.
NFTs are the final piece of the puzzle. This Thursday (March 18th) British artist Big Zuu is selling 75% of the rights to a song on his upcoming album, which is split into different parts and packaged in NFTs.
Taylor Bennett, the brother of Chancellor ‘Chance The Rapper’ Bennett, is selling 75% of the rights to an upcoming recording, including through separate NFTs.
Both artists retain 25% of their respective copyrights.
A 75% stake of two copyrights – a song by Big Zuu and a recording by Taylor Bennet – is available this week through an NFT sale from Bluebox
This will get interesting after these NFT sales are closed, according to Lee Parsons, co-founder and CEO of Ditto Music. Because this means that several people can automatically collect digital license fees from their share of this music via Bluebox.
“This year, Bluebox is launching both a copyright swap and an IRO platform for the first-version offering,” he explains. “Similar to websites like Polkastarter or Coinlist, where blockchain projects use the power of the community to fund initial offers, artists can use Bluebox IRO to pre-sell music to a community, which can then own a work of art as an NFT. ”
For astute collectors, this offers the opportunity to buy “shares” in an artist’s work before it is even published. This also creates an alternative source of funding for the artists themselves.
“To the best of our knowledge, this is NFT’s first real music copyright.”
Lee Parsons, Bluebox / Ditto
According to Parsons, NFTs are the missing component for this process to run smoothly.
“To the best of our knowledge, this is the first real NFT music copyright,” said Parsons of the upcoming Big Zuu and Taylor Bennett sales. “As a true copyright NFT, both the copyright owners and their NFT investors receive monthly royalties from streaming stores through a bluebox wallet.
“Currently this is only possible in the Bluebox architecture. The NFTs can also be traded on the upcoming Bluebox NFT exchange. “
According to Parsons, this is just the beginning of Bluebox’s potential.
“What we’ve created here is ultimately a way for thousands of fans to invest in music as an asset,” he says. “I’m looking at what 3LAU has just achieved with NFTs, thanks to a clearly dedicated fan base. If his fans pay millions to own an exclusive copy of his music, how much would they be willing to spend to actually own a piece of his catalog? “
Parsons adds, “Right now there is a lot of headline news about NFTs, but at its core it’s really just about token assets.
“We expect you will see more token assets like that [house] Properties coming on the market soon. Realistically, you will soon be able to trade your music copyright NFT for a piece of property for as long as it’s worth enough. That possibility is much closer than people think. “
“If 3LAU fans pay millions to own an exclusive copy of his music, I wonder how much would they be willing to spend to actually own a piece of his catalog?”
Bluebox is based on the R3 Corda blockchain, which has gained a reputation for being the blockchain that some of the world’s largest banks trust, having worked with clients such as Microsoft, Natwest and HSBC.
MBW has heard from sources in the blockchain world that R3 is an investor in Bluebox after participating in a seven-digit round on the platform with Kosmos Capital last year. Parsons will not comment on this suggestion, but confirms that this investment round has given Bluebox a pre-launch valuation of $ 20 million.
As Parsons puts it, the combination of bluebox and NFTs could spark a revolution in copyright sales with fans who will be able to buy songs and recordings before their favorite artist hits the big time – and then the rewards of that investment to reap the line.
He claims that such an “ecosystem” can currently only be implemented on Bluebox, as the platform can not only process the copyright-based NFT, but also the subsequent payment flow for license fees. He suggests that this combination could also lead to Bluebox quickly becoming an important technology in the future of acquiring proven evergreen copyrights for large sums of money.
“This is the end of the big record labels, publishing organizations and the music industry as we know them.”
Taylor Bennett, artist and manager
However, why do such transactions have to be based on blockchain and NFTs rather than trusted and traditional fiat currencies?
Parson replies: “In a word: liquidity. Buying a copyright is very difficult. You need to know where to buy it; You have to spend thousands on legal fees; and you certainly can’t buy it in small pieces.
“In contrast, NFTs and blockchain make the asset liquid and easily tradable. It therefore offers the possibility of an immediate transfer of ownership – a real first for the music industry. “
Taylor Bennett, who this week is selling 75% of its copyrighted music on a Bluebox NFT, goes even further: “This is the end of the big record labels, publishing organizations and the music industry as we know them.”
In the future, Parsons will be particularly enthusiastic about the use of Bluebox and NFTs at Opulous, which the team behind Ditto launched last month.
Opulous is a decentralized finance platform (DeFi) that allows artists to hedge loans against their previous streaming revenue, using the copyrights they own as collateral.
Artists and other investors can also deposit into Opulous’ Music Copyright Pools (from which loan capital is drawn) and learn that they can earn 10% per year on their contributions.
“The Bluebox platform for managing copyrights already provided the backbone for the credit process in Opulous,” explains Parsons. “Now the platforms are even more integrated.
“With Bluebox and NFTs, any non-music person can buy a piece of copyright and then use the monthly income from that asset to either earn interest [via the Copyright Pools]or get a loan right away. “
He adds, “Opulous and Bluebox are very closely related to the vision we have in the music industry for the next decade. And it’s a vision in which NFTs promise to play an important role. “Music business worldwide