[thisisbrians]

My favorite example of late is http://royal.io. You can purchase a token (NFT) that represents fractional ownership in the licensing rights of a musician's song or album, and also comes along with other perks (such as free or discounted merch and concert tickets). The proceeds from the NFT sales help fund the artist's project, and then you participate in the upside by receiving a share of royalties for holding the token.

[thrwn_frthr_awy]

Thanks for the reply. Royal looks interesting, but I may be missing why an NFT is needed for this. Fractional ownership was existed for a long time before crypto. What does the part NFT provide?

[spopejoy]

NFT for this use-case provides

- the uncorruptible chain of custody. While it's well known for decades that "just a database" would solve ASCAP/BMI robbing countless artists because "it's too hard to track them down", they're not going to do it. A royalty is meaningless if there's no mechanism to enforce it, and an autonomous one is simply superior. If you're then going to say "but I could do that with XYZ" then now the rhetorical burden is yours to explain to me why it NEVER caught on.

- fractional ownership is a doodad, but a particularly hard doodad to set up, especially alongside a royalty mechanism. Once again "but you can do that with" -- what? A Delaware corp? With specialized technology? Some combination of buggy lambdas on AWS? And _how_ are you going to offer this to artists and still make money?

NFT for royalties just makes sense. It's no wonder it's not making anywhere near the money that art NFTs do -- but that's art: you'd have to look far and wide to find a more contemptible and corrupted marketplace than fine art. It's no wonder they like crypto :)

[thisisbrians]

Where else can you go purchase the rights to the work of an artist you like as a consumer?

[scott_s]

You’ve described a share in a private company. Not only do you not need an NFT for that, using an NFT provides you no additional guarantees.

[exdsq]

Cool! How would you like to open a private company and manage that, including accounts and taxes, for every song?

[cuteboy19]

An NFT is just a receipt, it doesn't do any of the above. It's only better than a paper receipt in that it can be transmitted electronically.

[scott_s]

NFTs don’t do that for you. The company linked still has to do that.

[TimJRobinson]

NFTs can absolutely do that. They're programmable tokens that can be coded to do anything.

When people purchase songs though the smart contract, part of the value can be automatically sent to the wallet of the person who owns the NFT that corresponds to that song.

The problem is most people, even on here still think NFTs are just some dumb pointer.

[scott_s]

You're begging the question; you are assuming all transactions will happen on chain. That's not reasonable. Most transactions will happen with normal currency, using normal means. This company then needs to track all of that and do the distribution on chain.

And if they only allow people to compensate artists through cryptocurrency, then it's not viable for artists.

[thisisbrians]

Please point me to a musician who has created a private company and sold shares in order to compensate investors for royalties from their work.

[scott_s]

That’s beside the point. This company does not need NFTs to do it.