The Future of Music? Fans Can Now Invest in Music NFTs and Share in the Royalties

October 08, 2021, 10:00 AM AEST - 1 week ago

Financial services company Republic has announced the launch of “Republic Music”, an investment product that claims to offer “an entirely new way to create, produce and share royalties from music”.

Not to be confused with Republic Records, a New York-based label owned by Universal, Republic Music has partnered with crypto company Opulous to give fans the chance to “invest in the music they love for as little as US$100 and share in the rights to royalties”.

The idea is based on S-NFTs, or Security NFTs. The cryptosphere likes to argue that NFTs are not securities as such, as in the US they are subject to regulation by the Securities and Exchange Commission (SEC). But Republic views S-NFTs as a kind of security that can be invested in with the expectation of future profit.

The songs are going to be placed in an LLC, and you will be a member of the LLC. You will have a share of ownership in that song, and a right to the royalty on the back end.

Pialy Aditya, chief strategy officer, Republic

S-NFTs are overseen by the SEC and the Financial Industry Regulatory Authority (FINRA), the finance industry’s self-regulatory body. Thus US-based investors will have to comply with relevant know-your-customer (KYC) and anti-money laundering (AML) regulations to be able to get a piece of the action.

This hinges on Regulation Crowdfunding (Reg CF), which allows private companies to raise up to US$5 million from non-accredited investors.

Rapper Lil Pump Rides Republic’s First Wave

According to a Republic press release, “As part of the first wave of planned releases, [US rapper] Lil Pump is offering fans and investors the opportunity to be part of his forthcoming single Mona Lisa (feat. Soulja Boy), produced by Jimmy Duval.”

Rapper Lil Pump, first cat off the Republic rank. Source: vulture.com

Republic considers its music platform a “vertical” of its primary investment business, and is planning several other verticals geared toward fractional investments in different aspects of the creator economy.

In the new world order, early supporters are going to be rewarded, the artists are going to get paid and the community is going to grow stronger.

Pialy Aditya, chief strategy officer, Republic

More than six months ago, Crypto News Australia reported how some artists were considering directly offering their music in the form of tokenised products sold on DeFi marketplaces, rather than having it handled by traditional third parties such as record companies. It’s taken this long to start to become a reality.

Earlier this month, TikTok announced its series of NFT collectibles in collaboration with celebrity partners including US rapper Lil Nas X, Canadian musician/producer Grimes and NFT entrepreneur Gary ‘Vee’ Vaynerchuk.

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