Speaker 1: I'm Stacy Marie Ishmael, Managing editor of Crypto for Bloomberg Views.
Speaker 1: And this is Bloomberg Crypto, a daily Bloomberg I Heart podcast.
Speaker 1: It's Thursday, July. Earlier this year, the pop music duo
Speaker 1: are known as The Chain Smokers released five thousand non
Speaker 1: fungible tokens to fans for free. These n f t
Speaker 1: s gave fans a one percent cut of the streaming
Speaker 1: royalties from their latest album, as well as prior as
Speaker 1: the access to concert tickets and free merchandise. The Chain
Speaker 1: Smokers might not be the first musicians to experiments with
Speaker 1: crypto n f t s or the blockchain, and it's
Speaker 1: unlikely they'll be the last. What are artists and musicians
Speaker 1: like the Chain Smokers hoping to achieve with these moves
Speaker 1: and how are fans responding? In this episode, you'll hear
Speaker 1: from Bloomberg Reports A Hannah Miller and from Justin Blom,
Speaker 1: the CEO of Royal, a decentralized music startup. What if
Speaker 1: the public could actually owns in their favorite artist music.
Speaker 1: My DJ name is Blow, which is also my last name.
Speaker 1: Than Yeah, that's Justin Blow a K A three law
Speaker 1: a K. The CEO of Royal Royals the Stars up.
Speaker 1: That's trying to give fans more access and more investment
Speaker 1: opportunities in the bats they love. His company partnered with
Speaker 1: the chain Smokers to give their fans a stake in
Speaker 1: their success, they say, by creating and offering up n
Speaker 1: f T s that allow that share of streaming ownership.
Speaker 1: Justin joins me now, Justin, thank you so much for
Speaker 1: joining us today. Awesome, thank you for having me. Can
Speaker 1: you tell me a little bit more about the history
Speaker 1: of Royal Yeah, absolutely so. I was really interested in
Speaker 1: the intersection of crypto music about for the past eight
Speaker 1: years now, and I've been experimenting with lots of different things.
Speaker 1: Did some of my first early n f T experiments
Speaker 1: in and Royal is kind of just the amalgam of
Speaker 1: different manifestations that I've that I've thought about over the
Speaker 1: past call it eight years, um in ways to disintermediate
Speaker 1: music and give artists more power, give fans financial upside
Speaker 1: in an artist success. Now, when you say this intermediate music,
Speaker 1: what exactly do you mean. I think a lot of
Speaker 1: people are stuck in the illusion that music doesn't make money.
Speaker 1: You've seen that in the media, narrative quite often um
Speaker 1: when in reality music generates quite a bit of money,
Speaker 1: especially on streaming, which makes about of all recorded music income.
Speaker 1: It's just the people who are capturing that income are
Speaker 1: our institutions and the institutions that have owned rights over
Speaker 1: years and years and years and years of time, decades
Speaker 1: of time. So what we think about it, Royal is
Speaker 1: what what if the world was a bit different? What
Speaker 1: if the public could actually own rights in their favorite
Speaker 1: artist music, so that you have a combination of labels
Speaker 1: art and fans co owning songs that they love. So
Speaker 1: when I hear you say the folks who have been
Speaker 1: benefiting are like the big institutions Spotify share crisis tanked
Speaker 1: over the last year. They're facing stiff competition from Apple
Speaker 1: Music is the world's most valuable company, pivots more aggressively
Speaker 1: towards kind of the ecosystem of services. But look for Spotify,
Speaker 1: the most important asset is artists. So if we see
Speaker 1: more complaints coming forward, that could be a major problem
Speaker 1: for the streaming service. But what about the musicians themselves, Like,
Speaker 1: how does Royal help the musicians or does Royal help
Speaker 1: the musicians in that kind of framework? Absolutely I think
Speaker 1: the most important way Royal helps musicians, and this is
Speaker 1: kind of, you know, leaning a little bit into my
Speaker 1: background as a musician, is that with blockchains and immutable,
Speaker 1: transparent data, any artists can actually see who owns their
Speaker 1: tokens and interact with those particular people. In the regular
Speaker 1: world with Spotify and with you know ticket you know Ticketmaster,
Speaker 1: all these different services, artists don't actually participate in any
Speaker 1: of the data collection that they helped generate. So for
Speaker 1: music specifically, I might have done over a billion streams,
Speaker 1: I have no idea who my top listeners are. For ticketing,
Speaker 1: you know, I might have sold over millions of tickets
Speaker 1: in my career, and I have no idea who those
Speaker 1: people are. I don't have the data. So what's really
Speaker 1: interesting about block chains is for for tokens, artists can
Speaker 1: actually identify their audiences and communicate with them in a
Speaker 1: way more efficient way. I want to pick up on
Speaker 1: something you said. They're about transparency. I don't know of
Speaker 1: anyone who would ever describe the music industry is like
Speaker 1: a paragon of transparency or probably not, you know, clarity
Speaker 1: about how things work. What has been the reception of
Speaker 1: this fairly radical idea. Um, you know, with folks that
Speaker 1: you've been working with and talking to, you know, we're
Speaker 1: lucky that it's been so insanely positive, both but both
Speaker 1: on the kind of artist side and the existing the
Speaker 1: existing industry player side. I think everybody's really excited about
Speaker 1: the technology and they're curious how it might benefit their
Speaker 1: their incentives and their ends. Um. Realistically, right, having a
Speaker 1: more transparent, immutable data structure for music is probably good
Speaker 1: for all parties, right, And so the world is just
Speaker 1: kind of beginning to explore how it might apply to
Speaker 1: their specific niche of music. And you know, while Royal
Speaker 1: does focus specifically on artists, we believe in a future
Speaker 1: world where people could co own all types of IP. Now,
Speaker 1: in this potential future world where you know, there's multiple
Speaker 1: different models, Different people could be owners, people could be producers,
Speaker 1: and you know that more traditional but of course also
Speaker 1: forward looking sense of the term. This perhaps assumes that
Speaker 1: n f t s as an element of crypto, like
Speaker 1: have legs, right, that people are going to continue to
Speaker 1: be interested in this. We are talking right now in
Speaker 1: a period when you know, n f t s have
Speaker 1: had a bit of a challenging run, much like pretty
Speaker 1: much every other asset class in crypto. Once read hot
Speaker 1: n f T s are now cooling off a bit.
Speaker 1: The secondary market for the majority of people's paintings today
Speaker 1: is down from the peak, as is most an f
Speaker 1: T art. What is it about the model that you're
Speaker 1: proposing that works despite other pressures in the market, or
Speaker 1: does this work despite other propos in the market. That's great, Absolutely,
Speaker 1: that's a that's a wonderful question. I think at Royal
Speaker 1: we've we've never really considered ourselves an n f T platform.
Speaker 1: We consider ourselves a platform that enables anyone to invest
Speaker 1: in music, and we just so happened to use crypto
Speaker 1: rails to make that possible. We just so happened to
Speaker 1: use the technology behind non lungerible tokens to make that possible,
Speaker 1: because it actually becomes more efficient, um for payouts, for transparency,
Speaker 1: for all the other kind of reasons that we've we've
Speaker 1: briefly touched on in the past. I think that you
Speaker 1: know the concept, no matter what you apply crypto too,
Speaker 1: it has to solve the real world problem. 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 aboard ape right, which
Speaker 1: is arguably one of the most well known type of
Speaker 1: n f T s UM, the image itself is not
Speaker 1: the n f T right, So there's this giant misconception.
Speaker 1: What is the n f T, What 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: at 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's 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 the CEO of so
Speaker 1: rare Are, which you know provides like this kind of
Speaker 1: service but for fans of fantasy sports UM and sports
Speaker 1: based on real teams. We have talked about, you know,
Speaker 1: situations in which n f T s give people access
Speaker 1: to real world experiences, and that's also something that in
Speaker 1: the chain Smoker's concept um you'll provide it right where
Speaker 1: It's like, the owners of these tokens, and there were
Speaker 1: five thousand of them, didn't only get access to streaming revenue,
Speaker 1: they got tangible other non financial benefits. Can you talk
Speaker 1: a little bit more about those. Yeah, I think the
Speaker 1: beauty of tokens is once they exist on a blockchain,
Speaker 1: the issuer, whether that's an artist or a team, can
Speaker 1: kind of provide whatever benefits they want to. UM. The
Speaker 1: beauty of cryptos that it's composable, it's you know, the
Speaker 1: architecture of it enables anyone to build on top of it.
Speaker 1: So you could even be another artist and still engage
Speaker 1: the chain smokers fans by looking at all the wallet
Speaker 1: addresses that have interacted with the actual chain smoker token
Speaker 1: set right, so there's it's all transparent. You can see
Speaker 1: everyone who owns it. Um. The non anonymity of chowner
Speaker 1: is up to the owner, right, Like they can choose
Speaker 1: to you know, identify themselves on the Internet, or they
Speaker 1: can choose to remain anonymous. But the beauty of tokens
Speaker 1: in general is that Once they exist, they're not going
Speaker 1: anywhere and anyone can interact with them. So the idea
Speaker 1: of you know, creating real world utility, whether that's tickets
Speaker 1: or 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 the lines of like what
Speaker 1: the technology is capable of? Um at Royal were we
Speaker 1: try to be realistic in that, you know, the tech
Speaker 1: is still developing and there are a lot of challenges
Speaker 1: as we go. Um, so we we really attempt to
Speaker 1: make it as easy as possible for a user to
Speaker 1: get engaged. People have the misconception that crypto is really
Speaker 1: hard and difficult, and you know, it's easy to get hacked,
Speaker 1: things could be a scam, etcetera. You know, we've heard
Speaker 1: that 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 crypto. So I would say those are
Speaker 1: the two big conceptions that we challenge. The last question,
Speaker 1: what's your DJ name? My DJ name is blow, which
Speaker 1: is also my last name. There's a three in in
Speaker 1: my DJ name. I was in college and that was
Speaker 1: we all did that. It was 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. So,
Speaker 1: what exactly are artists like the Chain Smokers and platforms
Speaker 1: like Royal hoping to achieve by giving fans a piece
Speaker 1: of ownership in the band's success, and how are fans responding.
Speaker 1: Joining me now for more on this is Bloomberg reporter
Speaker 1: Hannah Miller. Hannah, you are back. Welcome. Always great to
Speaker 1: have you on the pod. Hi, thanks for having me today.
Speaker 1: We're going to talk about n f T s, which
Speaker 1: you know, I feel like we talked about n f
Speaker 1: T s a lot, and specifically, what I want to
Speaker 1: hear from you is about the story that you wrote
Speaker 1: about the Chain Smokers. Now, I confess I had not
Speaker 1: exactly listened to any of their music before I read
Speaker 1: your story, so I had to go and study up
Speaker 1: before we recorded this episode. But now that I have,
Speaker 1: and clearly you have, what is it that the Chain
Speaker 1: Smokers have been up to in the block chain space? Yeah, well,
Speaker 1: they released a new album called so Far, So Good,
Speaker 1: and basically this album was connected to an n f
Speaker 1: T where if you own this n f T held
Speaker 1: this n f T, you would get a very small
Speaker 1: sliver of the audio streaming royalties from the album, which
Speaker 1: was pretty cool. And it was not really that surprising
Speaker 1: that it was the Chain Smokers doing this, because they
Speaker 1: are totally into crypto. They're totally into web three. They
Speaker 1: actually have a venture fund called Mantis that has made
Speaker 1: some pretty big investments in the space, you know, some
Speaker 1: really notable names like Moon Pay, Magic, eden Um. So
Speaker 1: it kind of just fits overall that they would do
Speaker 1: something like this with their new album fascinating. I mean,
Speaker 1: I'm very interested in the ways in which crypto when
Speaker 1: venture capital and music and musicians and dj is, even
Speaker 1: if those musicians are cover bands emerging into what sounds
Speaker 1: like one conversation in the reporting of that story and
Speaker 1: others that you've done, what do you think are some
Speaker 1: of the trends that are causing all of these factors
Speaker 1: to converge. Yeah, I think people are constantly looking for
Speaker 1: sort of mainstream use cases for crypto, and when it
Speaker 1: comes to n f t s, like it's pretty easy
Speaker 1: to see, you know, fun things that you can use
Speaker 1: them for, whether it's art, collectibles, gaming, things like that,
Speaker 1: and they really do fall into the category of music.
Speaker 1: So we've seen multiple projects try to define what a
Speaker 1: music n f T is. Like, there's some decentralized music
Speaker 1: streaming platforms. There's platforms like Royal, which is the one
Speaker 1: that helped make the n f t tied to royalties
Speaker 1: that the Chain Smokers released. Um, you know, there are
Speaker 1: all these different projects that are kind of trying to
Speaker 1: figure out how can we best use crypto, blockchain, n
Speaker 1: f t S with music And is all of this
Speaker 1: coming from the musicians, is it coming from venture capital
Speaker 1: is it coming from those platforms you mentioned? Like what's
Speaker 1: the direction of all this innovation? Yeah, it's a total mix. Um,
Speaker 1: we've seen some pretty big names get really excited um
Speaker 1: about music, n f t S, music and blockchain. I'm
Speaker 1: thinking here like Snoop Dogg, Steve Aoki. Um, these are
Speaker 1: people who have you know, created their own platforms or
Speaker 1: have argued for the importance of music n f t S.
Speaker 1: And then you have venture capitalists jumping on board as well,
Speaker 1: who are willing to pour a lot of money into
Speaker 1: these projects. They're willing to, you know, really back something
Speaker 1: that we're kind of still figuring out what exactly the
Speaker 1: best use for blockchain is in music. So a couple
Speaker 1: of last things before you go. When we think about blockchain,
Speaker 1: when we think about crypto, when we think about n
Speaker 1: f t S, something we've also discussed is this this
Speaker 1: tension between centralization and decentralization right where on the one hand,
Speaker 1: you've got these theories that are about we're not going
Speaker 1: to have centralized control manifest in this space, but actually
Speaker 1: what you see instead is specific company specific platform, specific
Speaker 1: venture capitalists that are very centralized and do have a
Speaker 1: lot of power. Are you seeing anything, especially in music
Speaker 1: and music and f t s that is looking more
Speaker 1: like something decentralized or are we still really dealing with
Speaker 1: concentration here. Yeah, Well, part of why artists are seizing
Speaker 1: a pond blockchain in the music space is because they
Speaker 1: want to take back control of their art their music
Speaker 1: away from the music industry itself. The music industry takes
Speaker 1: a huge cut of artists streaming revenue, so something like
Speaker 1: a decentralized music platform would in theory allow an artist
Speaker 1: to have a more direct relationship with their fans. So
Speaker 1: that's like a lot of the push here that they're
Speaker 1: sort of decentralizing in the sense that they're moving away
Speaker 1: from the control of huge music companies and it's more
Speaker 1: direct between artists and you know fan, Okay, I'm a
Speaker 1: fun or if I were a fun and I like
Speaker 1: the chain smokas the chains more cause has a decentralized platform. Maybe.
Speaker 1: I'm also a fan of the Winklevy cover band. They
Speaker 1: have a decentralized platform. I want to listen to Snoop,
Speaker 1: He's on a different decentralized platform. How is that not
Speaker 1: annoying for me as a fan having to do all
Speaker 1: of these work to listen to them. Yeah, because we're
Speaker 1: still trying to figure out which is going to be
Speaker 1: the biggest decentralized music streaming platform. There are some names
Speaker 1: out there like Audious is one. I think it's pretty interesting,
Speaker 1: but yeah, it's gonna be quite the battle to get
Speaker 1: people to consolidate on one platform and also to actually
Speaker 1: get artists on board with blockchain. While you have people
Speaker 1: like Snoop Dogg and Steve Aoki really cheering this on
Speaker 1: crypto and blockchain n f t S, there's still scary
Speaker 1: concepts to a lot of people. Crypto is still a
Speaker 1: very complex thing that a music artist might not even
Speaker 1: 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
Speaker 1: G Miller nine. On the next episode of Bloomberg Crypto,
Speaker 1: you'll hear from two of our Crypto editors for our
Speaker 1: Editors Roundtable tomorrow. I'll be joined by Anna Errera in
Speaker 1: London and Philip lager Kransa in Zurich. We'll talk through
Speaker 1: this week's highs lows, the biggest stories of the week,
Speaker 1: and answer any questions folks have sent in. I'm Stacy
Speaker 1: Marie Ishmael and this is Bloomberg Crypto, a daily podcast
Speaker 1: from Bloomberg and I Heart Radio. For more shows from
Speaker 1: I Heart Radio, visit the I Heart Radio app, Apple Podcasts,
Speaker 1: or wherever you get your podcasts. Email your questions, comments
Speaker 1: or suggestions for the show to Crypto at Bloomberg dot
Speaker 1: net and you'll find us on Twitter at Crypto. The
Speaker 1: supervising producer of Bloomberg Crypto is Vicky very Galina. Our
Speaker 1: senior producer is Janet Babin. Our producer is Mohammed Peru.
Speaker 1: Our producer is Sharon Barriro. Our associate producers of Zanam Sidehi,
Speaker 1: Thaie Butler and Moses and um Desta wonder At is
Speaker 1: our engineer original music by Leo Sidron. Special thanks to
Speaker 1: Justin Blow for his track Worst Case