Speaker 1: This is Bloomberg Crypto, a daily Bloomberghart podcast, and I'm
Speaker 1: Stacy Marie Ishmael, Managing editor of Crypto for Bloomberg News.
Speaker 1: It's Thursday, November. Hey, y'all, Stacy Marie here. Because of
Speaker 1: the Thanksgiving holiday in the US, we are representing one
Speaker 1: of our previous recordings for the holiday. If you're celebrating,
Speaker 1: I hope you have a good day. Thanks for listening.
Speaker 1: Earlier this year, the pop music d you are known
Speaker 1: as The Chain Smokers, released five thousand non fungible tokens
Speaker 1: to fans for free. These n f t s gave
Speaker 1: fans a one percent cut of the streaming royalties from
Speaker 1: their latest album, as well as priority access to concert
Speaker 1: tickets and free merchandise. The Chain Smokers might not be
Speaker 1: the first musicians to experiments with crypto n f t
Speaker 1: s or the blockchain, and it's unlikely they'll be the last.
Speaker 1: What artists and musicians like the Chain Smokers hoping to
Speaker 1: achieve with these moves, and how are fans responding. In
Speaker 1: this episode, you'll hear from Bloomberg Reports Hannah Miller and
Speaker 1: from Justin blowm the CEO of Royal a decentralized music startup.
Speaker 1: What if the public could actually own rights in their
Speaker 1: favorite artist music. My DJ name is Blow, which is
Speaker 1: also my last names. That's Justin Blow a k A.
Speaker 1: Three Law a k A. The CEO of Royal Royals
Speaker 1: the Stars Up. That's trying to give fans more access
Speaker 1: and more investment opportunities in the bands they love. His
Speaker 1: company partnered with the chain Smokers to give their fans
Speaker 1: a stake in their success, they say, by creating and
Speaker 1: offering up n f T s that allow that share
Speaker 1: of stre eeting ownership. Justin joins me now, Justin, thank
Speaker 1: you so much for joining us today. Awesome, thank you
Speaker 1: for having me. Can you tell me a little bit
Speaker 1: more about the history of Royal Yeah, absolutely so. I
Speaker 1: was really interested in the intersection of crypto and music
Speaker 1: about for the past eight years now, and I've been
Speaker 1: experimenting with lots of different things. Did some of my
Speaker 1: first early n f T experiments, and Royal is kind
Speaker 1: of just the amalgam of different manifestations that I've that
Speaker 1: I've thought about over the past call it eight years,
Speaker 1: um in ways to disintermediate music and give artists more power,
Speaker 1: give fans financial upside in an artist success. Now, when
Speaker 1: you say dis intermediate music, what exactly do you mean.
Speaker 1: I think a lot of people are stuck in the
Speaker 1: illusion that music doesn't make money. You've seen that the
Speaker 1: media narrative quite often um when in reality music generates
Speaker 1: quite a bit of money, especially on streaming, which makes
Speaker 1: about of all recorded music income. It's just the who
Speaker 1: are capturing that income are our institutions and the institutions
Speaker 1: that have owned rights over years and years and years
Speaker 1: and years of time, decades of time. So what we
Speaker 1: think about it, Royal is what what if the world
Speaker 1: was a bit different? What if the public could actually
Speaker 1: own rights in their favorite artists music, so that you
Speaker 1: have a combination of labels, artists and fans co owning
Speaker 1: songs that they love. So when I hear you say
Speaker 1: the folks who have been benefiting are like the big
Speaker 1: institutions Spotify shaff crisis tanked over the last year. They're
Speaker 1: facing stiff competition from Apple Music is the world's most
Speaker 1: valuable company, pivots more aggressively towards kind of the ecosystem
Speaker 1: of services. But look for Spotify, the most important asset
Speaker 1: is artists. So if we see more complaints coming forward
Speaker 1: that could be a major problem for the streaming service.
Speaker 1: But what about the musicians themselves, Like, how does Royal
Speaker 1: help the musicians or does Royal help the musicians in
Speaker 1: that kind of framework. Absolutely, I think the most important
Speaker 1: way Royal health musicians. And this is kind of, you know,
Speaker 1: leaning a little of it into my background as a musician,
Speaker 1: is that with blockchains and immutable, transparent data, any artists
Speaker 1: can actually see who owns their tokens and interact with
Speaker 1: those particular people. In the regular world with Spotify and
Speaker 1: with you know, ticket you know Ticketmaster, all these different services,
Speaker 1: artists don't actually participate in any of the data collection
Speaker 1: that they help generate. So for music specifically, I might
Speaker 1: have done over a billion streams, I have no idea
Speaker 1: who my top listeners are. For ticketing, you know, I
Speaker 1: might have sold over millions of tickets in my career,
Speaker 1: and I have no idea who those people are. I
Speaker 1: don't have the data. So what's really interesting about block
Speaker 1: chains is for for tokens, artists can actually identify their
Speaker 1: audiences and communicate with them in a way more efficient way.
Speaker 1: I want to pick up on something you said. They're
Speaker 1: about transparency, I don't know of anyone who would ever
Speaker 1: describe the music industry is like a paragon of transparency
Speaker 1: or probably not, you know, clarity about how things work.
Speaker 1: What has been the reception of this fairly radical idea, um,
Speaker 1: you know, with folks that you've been working with and
Speaker 1: talking to. You know, we're lucky that it's been so
Speaker 1: insanely positive, both but both on the kind of artist
Speaker 1: side and the existing the existing industry player side. I
Speaker 1: think everybody's really excited about this technology, and they're curious
Speaker 1: how it might benefit their their incentives and their ends. Um. Realistically, right,
Speaker 1: having a more transparent, immutable data structure for music is
Speaker 1: probably good for all parties, right, And so the world
Speaker 1: is just kind of beginning to explore how it might
Speaker 1: apply to their specific niche of music. And you know,
Speaker 1: while Royal does focus specifically on artists, we believe in
Speaker 1: a future world where people could co own all types
Speaker 1: of I P. Now, in this potential future world where
Speaker 1: you know, there's multiple different models. Different people could be owners,
Speaker 1: people could be producers, and you know that more traditional
Speaker 1: but of course also forward looking sense of the term.
Speaker 1: This perhaps assumes that n f T S as an
Speaker 1: element of crypto, like have legs right that people are
Speaker 1: going to continue to be interested in this. We are
Speaker 1: talking right now in a period when you know, n
Speaker 1: f T s have had a bit of a challenging run.
Speaker 1: Much like pretty much every other asset class in crypto,
Speaker 1: once red hot, n f T s are now cooling
Speaker 1: off a bit. The secondary market for the majority of
Speaker 1: people's paintings today is down from the peak, as is
Speaker 1: most an f T art. What is it about the
Speaker 1: model that you're proposing that works despite other pressures in
Speaker 1: the market, or does this work despite other prostos in
Speaker 1: the market. That's great, Absolutely, that's a that's a wonderful question.
Speaker 1: I think at Royal we've we've never really considered ourselves
Speaker 1: an n f T platform. We consider ourselves a platform
Speaker 1: that enables anyone to invest in music, and we just
Speaker 1: so happened to use crypto rails to make that possible.
Speaker 1: We just so happened to use the technology behind non
Speaker 1: vungerible to cans to make that possible, because it actually
Speaker 1: becomes more efficient um for payouts, for transparency, for all
Speaker 1: the other kind kind of reasons that we've we've briefly
Speaker 1: touched on in the past. I think that you know,
Speaker 1: the concept, no matter what you apply crypto to, it
Speaker 1: has to solve a real world problem, right. Um. A
Speaker 1: lot of people kind of leverage the technology and talk
Speaker 1: about it in the sense of, you know, whether it's
Speaker 1: investable or not. Um. Even even a board eight right,
Speaker 1: which is arguably one of the most well known type
Speaker 1: of n f T s UM. The image itself is
Speaker 1: not the n f T. Right, So there's this giant misconception,
Speaker 1: what is the n f T. Well, the n f
Speaker 1: T is a certificate of authenticity, and why are certificates
Speaker 1: of authenticity valuable? UM? For tons of reasons? Right. So
Speaker 1: the underlying technology isn't going anywhere. I think that we
Speaker 1: we've all established that. I think that some of the
Speaker 1: brands and the most recognizable projects will ebb and flow
Speaker 1: with the times um. But the most powerful aspect of
Speaker 1: it is again the ability to you know, authenticate ownership
Speaker 1: of digital types of assets, and that something that we
Speaker 1: really haven't seen in the past that we're going to
Speaker 1: see a lot of development in the future, you know,
Speaker 1: when you talk about authenticity, verification, validation. We've had episodes
Speaker 1: where we interviewed Nicola Julia, who's CEO of so Rare,
Speaker 1: which you know provides like this kind of service, but
Speaker 1: for fans of fantasy sports UM and sports based on
Speaker 1: real teams. We have talked about, you know, situations in
Speaker 1: which n f t s give people access to real
Speaker 1: world experiences. And that's also something that in the chain
Speaker 1: Smoker's concept UM you'll provide it right where it's like,
Speaker 1: the owners of these tokens, and there were five thousand
Speaker 1: of them, didn't only get access to streaming revenue, they
Speaker 1: got tangible other non financial benefits. Can you talk a
Speaker 1: little bit more about those. Yeah. I think the beauty
Speaker 1: of tokens is once they exist on a blockchain, the issuer,
Speaker 1: whether that's an artist or a team, can kind of
Speaker 1: provide whatever benefits they want to. The beauty of cryptois
Speaker 1: that it's composable, it's you know, the architecture of it
Speaker 1: enables anyone to build on top of it, so you
Speaker 1: could even be another artist and still engage the chain
Speaker 1: smokers fans by looking at all the wallet addresses that
Speaker 1: have interacted with the actual chain smoker token set right,
Speaker 1: so there's it's all transparent. You can see everyone who
Speaker 1: owns it. UM. The non anonymity of each owner is
Speaker 1: up to the owner, right, Like they can choose to
Speaker 1: you know, identify themselves on the Internet, or they can
Speaker 1: choose to remain anonymous. But the beauty of tokens in
Speaker 1: general is that once they exist, they're not going anywhere,
Speaker 1: and anyone can interact with them. So the idea of
Speaker 1: you know, creating real world utility, whether that's tickets or
Speaker 1: other types of social engagement, extras, exclusive content, you know,
Speaker 1: we're really just seeing the beginning of that development as well. Um.
Speaker 1: You know, fan clubs in the past haven't always been
Speaker 1: the most successful model for achieving you know, additional value
Speaker 1: for an artist or for a team or for a musician.
Speaker 1: And when you begin to wrap your head around when
Speaker 1: when when the public begins to wrap it's head around
Speaker 1: this concept of co ownership, the incentives are aligned in
Speaker 1: such a stronger way. At the beginning, you said, you
Speaker 1: know that there's this really popular misconception that there's no
Speaker 1: money in music. What's another misconception that you're trying to
Speaker 1: address with Royal Interesting, Yeah, I mean I think another
Speaker 1: misconception is maybe more along lines of like what the
Speaker 1: technology is capable of um at Royal, were we try
Speaker 1: to be realistic in that you know, the tech is
Speaker 1: still developing and there are a lot of challenges as
Speaker 1: we go. UM, so we we really attempt to make
Speaker 1: it as easy as possible for a user to get engaged. UM.
Speaker 1: People have the misconception that crypto is really hard and difficult,
Speaker 1: and you know, it's easy to get hacked, things could
Speaker 1: be a scam, etcetera. You know, we we've heard that
Speaker 1: over and over again in the media and at Royal.
Speaker 1: What we do is quite simple. We keep it very familiar,
Speaker 1: so you can log in with an email and password
Speaker 1: and you can pay with a credit card, and we
Speaker 1: do that in order to show people how easy it
Speaker 1: is to get engaged in the crypto ecosystem without even
Speaker 1: knowing that it's cryptop. So I would say those are
Speaker 1: the two big conceptions that we challenge. Last question, what's
Speaker 1: your DJ name? My DJ name is blow which is
Speaker 1: also my last name. There's a three in in my
Speaker 1: DJ name. I was in college and that was we
Speaker 1: all did that. It was that the whole thing. Oh yeah, excellent, Well,
Speaker 1: thank you so much for joining us. Really appreciate you
Speaker 1: taking the time. Thank you. Next up, Bloomberg reporter Hannah
Speaker 1: Miller joins me for a look at how n f
Speaker 1: t s are reshaping the relationship between artists and their fans.
Speaker 1: So what exactly are artists like the Chain Smokers and
Speaker 1: platforms like Royal hoping to achieve by giving fans a
Speaker 1: piece of ownership in the band's success, and how are
Speaker 1: fans responding? Joining me now for more on this is
Speaker 1: Bloomberg reporter Hannah Miller. Hannah, you are back. Welcome. Always
Speaker 1: great to have you on the pod. Hi, thanks for
Speaker 1: having me today. We're going to talk about n f
Speaker 1: t s, which you know, I feel like we talked
Speaker 1: about n f t s a lot, and specifically, what
Speaker 1: I want to hear from you is about the story
Speaker 1: that you wrote about the Chain Smokers. Now, I confess
Speaker 1: I had not exactly listened to any of their music
Speaker 1: before I read your story, so I had to go
Speaker 1: and study up before we recorded this episode. But now
Speaker 1: that I have, and clearly you have, what is it
Speaker 1: that the Chain Smokers have been up to in the
Speaker 1: blockchain space. Yeah, well, they released a new album called
Speaker 1: so Far, So Good, and basically this album was connected
Speaker 1: to an n f T where if you own this
Speaker 1: n f T held this n f T you would
Speaker 1: get a very small sliver of the audio streaming royalties
Speaker 1: from the album, which was pretty cool. And it was
Speaker 1: not really that surprising that it was the Chain Smokers
Speaker 1: doing this because they are totally into crypto, They're totally
Speaker 1: into web three. They actually have a venture fund called
Speaker 1: Mantis that has made some pretty big investments in the space,
Speaker 1: you know, some really notable names like Moon Pay, Magic,
Speaker 1: eden Um, So it kind of just fits overall that
Speaker 1: they would do something like this with their new alb
Speaker 1: them fascinating. I mean, I'm very interested in the ways
Speaker 1: in which crypto and venture capital and music and musicians
Speaker 1: and DJs, even if those musicians are cover bands, are
Speaker 1: merging into What sounds like one conversation in the reporting
Speaker 1: of that story and others that you've done, what do
Speaker 1: you think are some of the trends that are causing
Speaker 1: all of these factors to converge. Yeah, I think people
Speaker 1: are constantly looking for sort of mainstream use cases for crypto,
Speaker 1: and when it comes to n f T s like
Speaker 1: it's pretty easy to see, you know, fun things that
Speaker 1: you can use them for, whether it's art, collectibles, gaming,
Speaker 1: things like that, and they really do fall into the
Speaker 1: category of music. So we've seen multiple projects try to
Speaker 1: define what a music n f T is. Like there's
Speaker 1: some decentralized music streaming platforms. There's platforms like Royal, which
Speaker 1: is the one that helped make the n f T
Speaker 1: tied to royalties that the Chain Smokers released. Um, you know,
Speaker 1: there are all these different projects that are kind of
Speaker 1: trying to figure out how can we best use crypto,
Speaker 1: blockchain n f t s with music And is all
Speaker 1: of this coming from the musicians? Is it coming from
Speaker 1: venture capital is it coming from those platforms you mentioned,
Speaker 1: Like what's the direction of all this innovation? Yeah, it's
Speaker 1: a total mix. Um, we've seen some pretty big names
Speaker 1: get really excited, um about music, n f t s,
Speaker 1: music and blockchain. I'm thinking here like Snoop Dogg, Steve Aoki. Um,
Speaker 1: these are people who have you know, created their own
Speaker 1: platforms or have argued for the importance of music n
Speaker 1: f t s. And then you have venture capitalists jumping
Speaker 1: on board as well, who are willing to pour a
Speaker 1: lot of money into these projects. They're willing to you know,
Speaker 1: really back something that we're kind of still figuring out
Speaker 1: what exactly the best use for blockchain is in music.
Speaker 1: So a couple of last things before you go. When
Speaker 1: we think about blockchain, when we think about crypto, and
Speaker 1: we think about n f t s. Something we've also
Speaker 1: discussed is this this tension between centralization and decentralization, right
Speaker 1: where on the one hand, you've got these theories that
Speaker 1: are about we're not going to have centralized control manifest
Speaker 1: in this space, but actually what you see instead is
Speaker 1: specific companies, specific platforms, specific venture capitalists that are very
Speaker 1: centralized and do have a lot of power. Are you
Speaker 1: seeing anything, especially in music and music and f t
Speaker 1: s that is looking more like something decentralized or are
Speaker 1: we still really dealing with concentration here. Yeah, Well, part
Speaker 1: of why artists are seizing upon blockchain in the music
Speaker 1: space is because they want to take back control of
Speaker 1: their art, their music away from the music industry itself.
Speaker 1: The music industry takes a huge cut of artists streaming revenue,
Speaker 1: so something like a decentralized music platform would in theory
Speaker 1: allow an artist to have a more direct relationship with
Speaker 1: their fans. So that's like a lot of the push
Speaker 1: here that they're sort of decentralizing in the sense that
Speaker 1: they're moving away from the control of huge music companies
Speaker 1: and it's more direct between artists and you know fan, Okay,
Speaker 1: I'm a fan, or if I were a fun and
Speaker 1: I like to chain Smokas, the chain Smokas has a
Speaker 1: decentralized platform. Maybe I'm also a fan of the Winkle
Speaker 1: Bye cover band. They have a decentralized platform. I want
Speaker 1: to listen to Snoop, He's on a different decentralized platform.
Speaker 1: How is that not annoying for me as a fan
Speaker 1: having to due all of these work to listen to them. Yeah,
Speaker 1: because we're still trying to figure out which is going
Speaker 1: to be the biggest decentralized music streaming platform. There are
Speaker 1: some names out there like Audience is one. I think
Speaker 1: it's pretty interesting, but yeah, it's gonna be quite the
Speaker 1: battle to get people to consolidate on one platform and
Speaker 1: also to actually get artists on board with blockchain. While
Speaker 1: you have people like Snoop Dogg and Steve Aoki really
Speaker 1: cheering this on crypto and blockchain and tease, there's still
Speaker 1: scary concepts to a lot of people. Crypto is still
Speaker 1: a very complex thing that a music artist might not
Speaker 1: even want to get into. So it's gonna be, I think,
Speaker 1: an uphill battle to try and get people to come
Speaker 1: over and really embrace this technology. Thank you, Hannah. You
Speaker 1: can find more of Hannah's reporting on the Bloomberg Terminal,
Speaker 1: on Bloomberg dot com and on Twitter. She's at h G. Miller.
Speaker 1: On the next episode of Bloomberg Crypto, you'll hear from
Speaker 1: two of our Crypto editors for our Editors Roundtable tomorrow.
Speaker 1: I'll be joined by Anna Errera in London and Philip
Speaker 1: Blagger Kransa in Zurich. We'll talk through this week's highs lows,
Speaker 1: the biggest stories of the week, and answer any questions
Speaker 1: books have sent in. I'm Stacy Marie Ishmael and this
Speaker 1: is Bloomberg Crypto, a daily podcast from Bloomberg and I
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Speaker 1: the show to Crypto at Bloomberg dot net, and you'll
Speaker 1: find us on Twitter at Crypto. The supervising producer of
Speaker 1: Bloomberg Crypto is Vicky very Galina. Our senior producer is
Speaker 1: Janet babin Our producer is Mohammed Peru. Our producer is
Speaker 1: Sharon Burriro, our associate producers of Zanam Sidehi, Thie Butler
Speaker 1: and Moses and um Desta wonder At is our engineer.
Speaker 1: Original music by Leo Sidron. Special thanks to Justin Blow
Speaker 1: for his track Worst Case