Last month, Ditto Music’s blockchain-based Bluebox platform pioneered what the company calls “the first NFT split sale for copyrighted music.”
In the end, two artists – the British rapper Big Zuu and the US act Taylor Bennett – each sold large shares (50% and 75%) of the music rights for an as yet unreleased title. These stakes were broken down into 1% stakes themselves as NFTs and sold for $ 100 each.
After the overwhelming demand, 125 individual buyers now have a 1% share in one or the other of these recordings.
Lee Parsons, founder of Bluebox, has made it clear to MBW that the recipients of these NFTs contractually hold an exclusive worldwide partial license for these sound recordings and will own them permanently.
In other words, every buyer should now share 1% of all digital royalties generated by the tracks forever (although they do not have the right to approve or deny use).
Parsons characterizes Big Zuu and Taylor Bennett’s NFT sale as a sold out success and a harbinger of the vast opportunities for NFTs in the future of the music industry.
“This was the first time a broken copyright music was sold to NFT this way,” says Parsons. “Everyone was gone within three minutes. We had over 10,000 users queued trying to buy them. “
“Imagine hundreds of thousands of people outside of the music industry owning music this way in the future and receiving their sales reports from Spotify every month.”
He adds, “A lot of NFTs are currently sold out, but there is still a big question about what their real value is.
“The Big Zuu and Taylor Bluebox sale gave non-musicians direct ownership of an artist’s rights, including monthly royalties. That in itself is groundbreaking.
“Now imagine that hundreds of thousands of people outside of the music industry will own music this way in the future and get their sales reports from Spotify every month. It’s a really exciting prospect. “
After Parsons and Ditto used this experiment to test the waters of proprietary NFT sales, they take things to the next level.
The Bluebox platform, he explains, enables a full back-end accounting and royalty tracking system on the blockchain, which allows royalties to be shared, recorded and managed by multiple users at the same time.
Parsons argues that Bluebox has been in development for over three years and is the most advanced example of such a platform on the market.
And yet Bluebox is now transforming again.
Ditto is merging Bluebox with sister company Opulous this week, a decentralized finance (DeFi) and asset sharing platform.
Opulous has completed a $ 5 million seed capital investment and private financing round to date and will allow music rights holders (including NFT buyers) to secure loans against their previous streaming revenues, using the copyrights they own as collateral .
When combined with Bluebox, Opulous will also enable artists to launch NFT sales – including shared copyright sales – to raise funds for their careers through fans and investors.
To illustrate how these two systems can be combined, let’s look at the aftermath of Big Zuu and Taylor Bennett’s NFT sales.
Once these artists publish their affected tracks via streaming services, the monthly license fees they generate should be paid out via Bluebox technology in 1% increments to all people who have purchased NFTs.
Parsons explains, “When these payments are made in each of the recipients’ accounts at Opulous, they can apply for credit based on their NFT’s royalty history. Alternatively, they can leave their NFT on the Opulous platform and “use” it to earn additional interest.
“This entire process is decentralized and done peer-to-peer without the need for a bank.”
“This is the perfect meeting place for artists looking for alternative ways to finance their careers, as well as for fans and investors who believe in their potential.”
Investing in music rights via the blockchain and further investing the license proceeds in a blockchain-based financial system may be unknown to many industry observers and part-time investors.
However, Parsons is convinced that, given the increasing status of music as a valuable asset class, such systems will become increasingly popular in the years to come.
“This is the perfect meeting place for artists looking for alternative ways to fund their careers, as well as fans and investors who believe in their potential,” he says.
It’s evident that Big Zuu and Taylor Bennett’s NFTs sold last month won’t make 1% of licensees rich.
However, Parsons points to the bigger picture: “As the demand for more musical objects grows and people get used to them [trading] In a blockchain exchange, we will find that people have large portfolios, even hundreds of music assets, that generate significant and consistent monthly income. “
He adds, “Opulous is now proving this concept. Combined [with the Bluebox tech] This could have a dramatic impact on both artists’ access to funding and the fan community’s feeling of investing in their favorite acts. “
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