Over one hundred million people watched Rihanna open the Super Bowl LVII halftime show with her multiplatinum hit Bitch Better Have My Money. Surprisingly, the ones cheering hardest may have been a few hundred blockchain fans.
Earlier this month, Web3 startup AnotherBlock (in conjunction with music producer Deputy) released a collection of 300 NFTs that grant holders, in addition to other benefits, a portion of streaming royalties for BBHMM. In theory, this means those holders would get paid every time the song is streamed on platforms like Apple Music or Spotify. In reality, things are a bit more complicated.
First, each NFT entitles its holder to 0.0033% of so-called master royalties from licensed digital service providers, but the NFT Ownership Agreement notes that AnotherBlock and Deputy will deduct taxes, blockchain "gas" fees, and other costs and expenses from that amount. The agreement also makes clear that royalties will not be paid automatically; instead, NFT owners must use their crypto wallets to claim their share of royalties, paid out in ETH cryptocurrency, when those shares become available every six months. Moreover, AnotherBlock and Deputy will collect royalties for BBHMM in U.S. dollars and convert them to ETH "within a reasonable time" of receipt. Given the volatility of cryptocurrency and uncertainty within the regulatory landscape, NFT holders may be watching from the sidelines as the real-world value of their royalties fluctuates wildly. Since the agreement is "subject to Swedish law" and requires disputes to be resolved by the Stockholm District Court, NFT holders may find their options limited in the event of any dispute.
Nonetheless, the BBHMM NFTs are a great example of how blockchain technology and NFTs can empower artists and their fans. Offering NFT holders a portion of streaming royalties can give artists a new way to monetize their music, control revenue streams, and engage with their audience without the need for a record label. At the same time, fans can strengthen their connection to their favorite artists by owning a direct stake in the music they love.
As music NFT services like AnotherBlock, Royal, and SongVest continue to work with popular and upcoming artists, we're likely to see growing interest in music NFTs and perhaps a disruption of the music royalty landscape. But, in order for this to happen, those services better have our money...
BBHMM NFTs are a great example of how blockchain technology and NFTs can empower artists and their fans.