3LAU’s Royal Debuts Marketplace to bring music NFTs to the masses

Royal, one of the biggest names in the burgeoning music NFT space, has finally launched its long-promised marketplace for fractionalized music rights.

Started by electronic musician and entrepreneur Justin “3LAU” Blau and Opendoor founder JD Ross, Royal raised 16 million dollars in its seed funding round in August 2021. Last November, the Web3 music startup raised another 55 million dollars in funding from Andreessen Horowitz, Coinbase Ventures and Paradigm, along with popular musicians such as Nas and The Chainsmokers.

With that capital, says Blau Decrypt that Royal has spent the last year developing its browser-based NFT marketplace, where users can now discover new artists, trade Royal NFTs and view detailed statistics on each asset.

The Royal Marketplace pulls bid data and purchase history from the largest NFT marketplace, OpenSea, plus the dashboard aggregates streaming data from Spotify, Apple Music, Amazon Prime Music, Tidal and SoundCloud Premium.

Since it began releasing NFTs, Royal has dropped music with heavy-hitters such as Diplo, Nas, The Chainsmokers, Vérité, Elephante and 3LAU himself. As part of today’s marketplace launch, Royal drops another drop featuring electronic musicians Bingo Players and Zookëper.

Each Royal NFT offers buyers a fractional share of royalty payments as the artists’ songs are played on streaming services. Earlier this month, Royal announced that the artists who collaborated had paid out $100,000 in royalties over more than 9200 NFT collectors since launch.

This milestone shows that collecting royalties, even if currently modest, can be a real incentive for fans to buy NFTs from their favorite musicians. The percentage varies by artist and/or song, but it allows fans to invest in artists while betting on their future success.

While holders won’t make back what they paid for each Royal NFT right away, there are potential benefits for long-term collectors depending on which artist(s) they support. Royal NFTs aren’t just about music rights and royalties – some NFTs are eligible for real-world bonus benefits, like access to meet-and-greets or listening parties.

Who is it for?

Royal’s marketplace is launching in an NFT space that already has many established platforms for buying and selling digital assets, although many are broadly designed and not focused specifically on music. There are also many Web3 music platforms competing for users’ attention, such as Audio and Our song (Blau is a consultant for Audius).

Even with so many other NFT platforms in the area, Blau said there is a need for a dedicated platform that can bring in new users, as Royal is not targeting Web3 natives.

“The reason we built our own is because we felt that a lot of music fans don’t know how to set up a wallet,” Blau said Decrypt. “We’ve basically set up a way for everyone to pay and trade in dollars. So if you’ve never used crypto before and you sign up for Royal, we’ll generate a wallet for you. You can deposit USDC into that wallet from your bank account. You never have to see Ethereum if you don’t want to.”

Royal’s marketplace leverages Ethereum sidechain Polygon’s network for its NFT assets, but does not see self-storage of crypto wallets or handling of ETH as a necessary part of the Web3 experience. Royal simply wants to leverage the concept of blockchain verifiable ownership while making it mainstream.

“We needed to build a little better bridge,” Blau said of Royal’s decision to deploy its own marketplace.

Royal’s goal for the marketplace is to be extremely user-friendly and keep the crypto elements minimal. This strategy can prove successful: Audius recently reached 7.5 million users, in part because, as CEO Roneil Rumburg previously told Decrypt“the average Audius user isn’t even aware that the crypto is there.”

“We’re not necessarily building it for the existing users of crypto,” Blau said of Royal’s marketplace. “We’re building it for all the new ones.”

Royal debates

Royal’s music royalty for collectors is not quite the same as the concept of creator’s royalties in the wider world of NFTs.

Royalties have become a controversial topic lately that marketplaces like Open sea and Magical Eden discuss whether to enforce a creator royalty – a fee, usually set at 5% to 10% of the sale price, paid by sellers on the secondary market. Many platforms have made them optional, although OpenSea chose to keep them after backlash from the creator.

“I never really understood why we call them royalties in the first place,” Blau shared Decrypt. “Royalties kind of mean that something is consumed – that there is some kind of right that is paid out – and what we call secondary royalties are actually secondary commissions.”

Royal’s payouts are royalties in the traditional sense of the word: rights owners receive a percentage of the profits when a piece of content is consumed. In Royal’s case, these rights holders are the NFT owners. In the rest of the NFT world, royalties might more accurately be renamed creator fees or, as Blau suggested, “secondary commissions.”

“My general view is that the idea of ​​secondary commissions in perpetuity fits the product market, to the extent that people get very excited about it,” he said. “Unfortunately, its enforceability requires a degree of centralization.”

A main reason Blau started Royal was to disrupt the traditional music industry and allow musicians to earn a larger share of the overall revenue pie, where they currently take home around 12%.

“At Royal we obviously believe creators should be paid forever,” he explained. “We are also sensitive to general fee structures. Like, 10% every time something is exchanged is just a little irrational. But there is something in between that we think is fair.”

Royal said it covers platform fees and artist fees on the marketplace until 2023, while the secondary commission fee for artists will be 2.5%.

The future of Royal

So what’s next for the Royal Team? Blau told Decrypt that a mobile app version of the marketplace is in the works. “It could be soon,” he said of an iOS app.

But Blau isn’t worried about Apple’s strict NFT guidelines or 30% in-app purchase fees for all NFTs sold. Apple’s guidelines have divided NFT advocates. Some see these fees as incompatible with Web3 business models, while others say the mainstream audience is necessary and Web3 builders simply need to get more creative with how they monetize products.

“We have a direct contact with Apple that we’re working with to make sure we’re considering the right parameters for launch,” Blau said. “These fees will not get in the way of our vision.”