Chainsmokers release NFTs that offer a cut of royalties
Pop music duo Chainsmokers have released nonfungible tokens that will give fans a cut of the streaming royalties from their new album So Far So Good.
The 5,000 NFTs were given out for free this week, with a VIP list made up of frequent concert ticket buyers and other superfans getting early access. Holders are entitled to a collective 1% of the So Far So Good royalties, the group announced last week.
It’s a tenuous moment for NFTs, which have been hit hard by a rout that’s also punished cryptocurrencies. Blue-chip NFT collections like Bored Ape Yacht Club have seen prices plummet in recent days.
But the Chainsmokers’ NFTs, which are based on the Polygon blockchain, offer actual perks to fans. That may help them stand out from other tokens, said Drew Taggart, one of the group’s members. In addition to the share of royalties, the NFTs will offer priority access for concert tickets and free merchandise.
The approach also will help the group reconnect with fans, he said in an interview. The new album, due on Friday, will be the Chainsmokers’ first in more than two years. “We’ve been very fortunate to have global success, but at some point felt really disconnected from our fan base,” Taggart said.
The music industry is no stranger to crypto. There are projects like Audius, a decentralised music streaming service based on blockchain. Indie band the Kings of Leon released their last album as an NFT. Artists like DJ Steve Aoki and rapper Snoop Dogg have also embraced these tokens.
But NFTs haven’t taken off in the music world the way they did in gaming and digital art, two categories that dominate the leaderboards for popular NFT collections. That may be because some artists see NFTs as digital goods, said Taggart.
“Being able to give your fans ownership in your actual album and participate in streaming royalty revenue is a really interesting case,” he said.
Taggart and bandmate Alex Pall are already well-versed in the
world of crypto through their venture firm Mantis, which formed last year with the goal of investing US$50 million (1.7 billion baht) in start-ups. The fund has backed crypto companies like MoonPay, Magic Eden and Mythical Games.
Pall said in an interview that he and Taggart are interested in web3, a decentralised version of the internet, because it returns value and ownership to users. He said the NFTs also help shed light on disparities in the music industry. The Chainsmokers are entitled to a 7.5% cut from secondary sales of the NFTs, but the group is donating those profits to the album’s songwriters, a role they said is often underpaid in the music industry.
It’s too early to tell what kind of profit the NFT holders could get from their royalties cut, according to Pall. However, holders may not want to hold their breath in hopes of a big payday.
“In some ways, it’s an experiment to show people how little money is generated sometimes across the board in the music space, due to licensing rules and copyright laws,” Pall said.