Rihanna's hit song "B**** Better Have My Money,", released in 2015, has sold after being offered as a non-fungible token (NFT) by Deputy, one of the co-producers of the song. Deputy, who collaborated with Rihanna, Kanye West, and Travis Scott to produce the hit song, has partnered with AnotherBlock, a Web 3 startup focused on boosting investment in the music streaming industry.
The collection comprises 300 fractionalized NFTs and confers upon holders a share of the streaming royalties for the three-time Platinum-certified song estimated at 6.5% for the first year (based on the selling price of USD$210, but now the NFTs are selling for USD$1400).
To date, most NFTs have been represented as digital art that occasionally grant holders exclusive benefits and opportunities, such as access to the Yacht Club for holders of Bored Ape Yacht Club NFTs, or free entry to the Australian Open Precinct, but NFTs like this show the power of connecting digital assets to a real-world product, eliminating the need for cumbersome paperwork and expensive intermediaries. To ensure the provision of royalties, multiple agreements usually need to be drafted, and the music industry contains various types of royalties with complex structures.
For instance, performance royalties differ from streaming royalties and mechanical royalties, each requiring a distinct agreement. Mechanical royalties are the much rarer form of royalty which only accrue when physical copies, are purchased.
These agreements can include songwriter agreements, record contracts, streaming agreements, and sync licensing agreements, each containing specific clauses determining the distribution of royalties among entitled parties.
This project cuts through the vast complexities which linger over traditional contracts and allows for a quick and efficient public record of who is receiving what royalty as well as an opportunity for fans and investors.
NFTs have experienced a roller coaster of success in recent years, with some projects reaching unprecedented heights while others experiencing significant value losses. Nonetheless, projects like this one are showcasing the full range of possibilities and potential of NFTs to consumers. This offering not only includes royalty payments but promises a 'gated community' of other 'music owners' which superfans of Rihanna are sure to value.
The ability for entities to create an NFT representing any piece of art, such as a song or movie, fractionalising the NFT and distribute to consumers for real-world rewards such as royalties explores an entirely new opportunity for consumers, artists and the financial services sector and these tangible connections are likely to grow in the future.