Normally in the music industry, it’s more or less impossible for ordinary investors to buy music rights. Thus, web3 startups saw an opportunity to tokenize music assets, allowing fans access to music rights in a wholly new fashion.
Of course, this garnered a lot of interest during the crypto boom a couple of years ago.
For example, Royal launched an NFT-based music platform which allowed fans to buy and sell tokenized ownership of songs. Its marketplace sells tokens representing a percentage of the music’s streaming rights, plus extras. That way, it says, fans earn royalties alongside the artist and get paid when they do.
Royal went on to raised a total of $71 million, including from the likes of a16z Crypto.
In theory, the ire for these types of platforms might have cooled since those heady days of the crypto boom.
But, clearly, blockchain is like a Zombie that refuses to lie down. Why? Because, so far, no one has come up with a better way to prove you own something.
That’s good news for web3 music company AnotherBlock, based out of Sweden.
Founded by Michel D. Traore, Sebastian Ljungberg and Filip Strömsten in 2022, the blockchain-based marketplace for music has now raised a €4 million funding round led by U.K.-based Stride.VC. Also participating was the artist Axwell of Swedish House Mafia.
Prior to this round, the startup had raised a $1.2 million pre-seed round from VC J12 and some angel investors.
Similarly to Royal, AnotherBlock’s marketplace for music rights uses NFTs and tokens to generate royalties related to ownership. Artists receive a transaction payment/trade-royalty each time the NFT is traded.
This is all very well, but it’s clearly getting genuine interest from the music industry.
For example, Jamil “Deputy” Pierre, a co-producer on Rihanna’s “B–ch Better Have My Money,” raked in a reported $63,000 after he sold his personal royalties for the song as an NFT via AnotherBlock. This was because Rihanna’s performance at the Super Bowl LVII halftime show featuring the song went viral.
That said, the listing of the song wasn’t all plain-sailing, with OpenSea delisting the BBHMM NFT collection for unknown reasons.
Under the NFT ownership agreement with AnotherBlock, secondary sales are also permitted and the rights owner is required to pay NFT holders their percentage of any streaming royalties earned, no less than twice a year.
Gabbi Cahane, partner at Stride.VC, said in a statement: “This proposition could be a seismic shift for an industry that has traditionally been extremely protective over the ownership of IP.”
AnotherBlock’s other artists include The Weeknd, Martin Garrix, Alan Walker, Offset and R3HAB.
“I have followed AnotherBlock since the beginning, and it is clear that their work aligns with their vision. Enabling greater rights flexibility is the future of the industry. It creates a whole new freedom for creators to share the financial incentives with fans, which are the most important thing we have,” added Axwell, in a statement.