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Royal Raises $55 Million to Give Fans Ownership in Music

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("Worst Case" cover art via 3LAU)

by Dan Runcie

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A new NFT marketplace Royal has raised a $55 million Series A round led by Andreessen Horowitz. Other investors include Nas, The Chainsmokers, Kygo, CAA, Coinbase Ventures, and others.

Royal’s value prop checks all the boxes for the web3 enthusiasts. On Royal, artists can share ownership of their music with fans by issuing NFTs as a limited digital asset. Those NFTs may eventually include invites to events, community access, VIP experiences, merch, and more.

To test it out, Royal co-founder and artist 3LAU gave 1 token to each of the top 333 Royal users based on how many users they have referred. Collectively, the NFTs represented 50% of the ownership of the streaming royalties for 3LAU’s new single “Worst Case.” The secondary sales of the tokens have given the new single an implied $6 million valuation, and over $8,000 in value for each token released to fans.

3LAU’s test run is impressive, but 3LAU is also the co-founder of Royal, and 3LAU’s audience that’s already tapped into NFTs given his prior success. The future artists who use this platform may be better benchmarks.

Do all fans want ownership? Royal’s best value-prop is the opportunity for artists to identify and serve their earliest fans. But will the users of Royal be an artist’s true “day-one fans” or just the “day-one fans who are active retail investors”?

The fan ownership opportunity is all the buzz, but the web3 echo chambers can overstate the interest that most casual fans have in owning (or managing) music rights. Every artist has a subset of fans who would love to get in on the upside, and platforms like Royal can make that happen. But artists should have realistic expectations on what percentage of their fans are interested in that, regardless of how easy it may be.

Plus, fan having more control over an artist’s rights and IP may require regulations that have yet to be explored.

Artist-investors like Nas and The Chainsmokers will likely use Royal the same way they plan to use Audius. It’s an opportunity to experiment on a new platform and invest in the companies with potential. But they still release music on the major digital streaming providers in partnership with the major record labels.

It’s a complement, but not (yet) a replacement.

Read more about 3LAU’s Royal token on Medium.

Dan Runcie

Dan Runcie

Founder of Trapital

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