Pantera Capital Partner: Using Smart Contracts to Promote the Paradigm Shift of Music Royalty

September 24th. At this stage, the main commercial use case of digital art is to collect royalties, and creators will charge a small amount of usage fees to the platform. Royalties enable artists to obtain long-term and stable income from digital media through original works. Every year, the music industry earns as much as 40 billion U.S. dollars in revenue, but only 12% of it is actually paid to artists, and the rest goes to intermediaries (institutions) such as agencies, platforms, and record companies, unfairly “stealing” “The fruits of the creator’s labor. In addition, these revenue streams are almost entirely driven by fan participation, but they have no rights and opportunities to join the music production process.

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Regrettably, the unfair distribution of royalties is not limited to the music industry, but also occurs in fields such as video streaming, YouTube content creation, TV licenses, and independent film production.

However, today’s unfair income distribution model is about to become a thing of the past. The digital media production process is undergoing a paradigm revolution, from being centered on middlemen (institutions) to centering on artists and their most loyal fans. . Nowadays, record companies such as streaming media, UMG and Sony Music have taken less and less weight in the process of music distribution and platformization. In addition, artists can gain a wave of fans early in their careers, so the fan community The participation of is also getting higher and higher, which allows artists to get support including funds from their fan base.

Using smart contracts to promote a paradigm shift in music royalties

Royal is the representative project of this paradigm shift. By eliminating the need for middlemen, it helps artists use smart contracts to crowdfund their creative projects, provides supporters with a portion of the project’s revenue (or royalties), and provides incentives for fans who support themselves. It overturns the highly institutionalized business model of today’s music industry. While giving tangible rewards to artists, it also provides support to loyal fans.

So how does Royal work? In fact, Royal’s agreement includes a service that can help artists to compliantly cast and sell limited digital assets (LDA) for any type of digital media in exchange for a small amount of creative fees. Fans can also purchase limited numbers in the initial sale. Assets serve as a way of “supporting” an artist’s project. 

Secondly, Royal’s smart contract can automatically collect and distribute royalties, while at the same time it can handle all transactions between legal currency and on-chain tokens, and payment of royalties to holders of limited digital assets. However, Royal will charge a small amount of royalties as a platform management fee. 

Finally, Royal can also create a secondary market for limited digital assets. Holders of previously issued limited digital assets can trade with each other, thus creating a complete value ecosystem around the artist’s works and their supporters. This also creates additional business opportunities for Royal, promotes market making of limited digital assets, and earns profits from token resale for artists. Not only that, Royal also plans to release a set of creator tools to help creators use limited digital assets as a way to increase interaction with fans. By providing functions such as granting special permissions and supporting direct communication and access between fans and creators, it helps creators use limited digital assets as ecological participation primitives. Limited digital assets can be used not only as economic investment, but also as a “passport” for the fan community, which more fully captures the intangible social value of works of art.

Currently, the Royal project is establishing partnerships with some undisclosed well-known artists. If all goes well, fans are expected to be able to purchase limited digital assets to support music production starting in October. After building and verifying products around music ownership, the Royal team also plans to extend their method to other asset categories that generate royalties-including digital assets (such as TV licenses, YouTube content creation, etc.) and physical assets (such as land and mineral rights, Patents, etc.). So, after introducing so much information about the Royal project, who is behind the scenes? Royal was founded by well-known EDM artist 3LAU and the former co-founder of Opendoor JD Ross. JD Ross previously sold a tokenized album with a daily revenue of up to 12 million U.S. dollars. The project has now completed a 16 million U.S. dollars For seed round financing, investors include Founders Fund, Paradigm and other institutions.

Summarize 

For a long time, the music industry has been under the influence of predatory business models. Most of the profits of the works created by artists have been exploited by record companies and distribution service providers and other large organizations. At the same time, fans who devoted themselves to the industry and invisibly promoted the development of the industry were ruthlessly abandoned, and their dedication received no return.

The innovative business model proposed by Royal has pushed artists and their most loyal fans to the music production center, enabling artists to rely on these loyal supporters to support creative projects and at the same time reward fans who support the industry. . Ultimately, enabling digital creators and their communities to get the rewards they want. In fact, this also reflects the main goal of decentralization: to reduce the organization’s grasp of power, and to return more value to individuals. 

 

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/pantera-capital-partner-using-smart-contracts-to-promote-the-paradigm-shift-of-music-royalty/
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