EDM Artist and Royal Founder Justin Blau sat down with Yahoo Finance’s Jennifer Schonberger to discuss his latest development in NFTs - a new platform called Royal - as well as how he sees NFTs changing the landscape of music ownership in the future.

Video Transcript

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JENNIFER SCHONBERGER: Welcome to "Yahoo Finance Presents."

For so long, if you wanted to invest in music, you had to fork over millions of dollars to purchase an artist's catalog in order to reap the income every time a song is played. But one artist is trying to change that by making investing in music available to everyone through blockchain technology. An EDM artist known as Justin Blau is launching a brand new platform called Royal, which will sell rights to songs through NFTs. Blau's dropping a brand new song Friday called "Worst Case," where he'll offer 50% of the royalties through NFTs ahead of Royal's platform launch later this month. In a Yahoo Finance exclusive, Blau joins me now.

Justin, welcome to the program. Thanks so much for coming on.

JUSTIN BLAU: Thanks for having me.

JENNIFER SCHONBERGER: Why did you decide to pursue the opportunity of offering investing in music publishing rights as NFTs?

JUSTIN BLAU: Yeah. So with Royal, we specifically let fans participate in the streaming revenue rights for songs specifically. And for me, I've always thought it was really interesting if fans could co-own music with their favorite artists. Ultimately, fans are the ones responsible for making an artist popular. They're the ones that go to the shows, that share the music with their friends. So why not enable fans to participate in the upside of an artist's career as they grow? And that was really the inspiration behind Royal.

JENNIFER SCHONBERGER: So what made you think that this would be a smart business opportunity? Do you think that NFTs are the future of the music industry? Are you looking to disrupt the music industry, perhaps, in the same way that Spotify did?

JUSTIN BLAU: Yeah, absolutely. I think I've been exploring NFTs since 2017, 2018. And back then, it was very new, and a lot of people didn't really believe in the potential power of the technology. Fast-forward to this past year, when, you know, tokenization of all types of creative content is more widely accepted and the public is starting to really understand and grasp what that means conceptually, you know, utilizing NFTs and all types of blockchain technology to, you know, disseminate ownership and to kind of disintermediate all of the middlemen in the music industry is incredibly powerful and inevitably going to happen in the future. It's something that I believe for the past four years.

So I think that the biggest disruption to music will probably happen from the web-- from a Web 3 lens. And more specifically, you know, at Royal, we're really excited to build a layer on top of the existing music industry, right? So I think and I believe that, you know, giving fans ownership is just something that hasn't happened before. And that can interplay with all aspects of the more legacy music infrastructure.

So, you know, with Royal, we really look to work with both established artists and newcomer-- newcoming artists to help them, you know, monetize their creativity in a new way.

JENNIFER SCHONBERGER: Yeah. It sounds like you're really democratizing music right here and investing in music in that, beforehand, it was almost prohibitive. You had labels. You had accredited investors. You had hedge funds that had the financial wherewithal, right, to really purchase a music catalog, which was how you had to do it. Now it sounds like you are offering the ability to invest in a particular song and, from there, even fractionalizing that. Just as you can buy fractionalized shares of a stock, like Google, here you can buy a portion of a song's copyrights through an NFT. Is that right?

JUSTIN BLAU: Yeah. I guess a better way of explaining it versus fractionalization, which is not quite exactly what we're doing-- but imagine you buy a vinyl. There are only 100 vinyls of an album, and you buy one of those vinyls. And every month, you know, in owning that piece of art, that kind of tangible piece of art, you also happen to participate in the upside of the royalties of the song, right?

So we like to call it, like, a rights assignment for buying art as opposed to fractionalization. That's kind of the technical background of what we do at Royal. But in theory, yes, you know, thousands of people can own a piece of the actual music that an artist comes out with.

And like you said, you know, historically, the most successful startups take something that really wealthy people like to do and democratize it for the public using technology, right? You take Uber, Airbnb, all these companies. I think that the ideal world for Royal is, you know, instead of having this small group of people who have access to investing in music rights, you expand that to the entire public. And there's a lot of demand for that, especially, like, from the surveys we've taken and from responses to some of my tweets.

So it's kind of inevitable that the public wants to invest in music. They just haven't had the means to. So in developing Royal, that's kind of our primary goal-- is, how do we democratize access to investing in a new asset class?

JENNIFER SCHONBERGER: And then the idea is, perhaps, you can invest in an artist in their infancy-- perhaps it's an emerging artist-- and then grow with the artist as the artist grows and participate in the revenue share. Is that the idea?

JUSTIN BLAU: 100%. If I look back at my history as an artist, you know, even-- there are artist friends of mine that I would have invested in five, six years ago. The Chainsmokers and Illenium are two artists that, you know, have exploded in popularity who actually opened for me on tour, you know, back in the day, right? And I believed in them as artists. I would have totally invested in them if I had the capacity to, right?

So it's not just for fans to be able to invest. It's kind of also for artists to be able to invest in other artists for TikTokers and social media influencers to invest in musicians as well. If they use their music, they can see, you know, an actual benefit in their holdings or in their investment in that artist, right? So there's kind of infinite potential with how-- where this can go.

JENNIFER SCHONBERGER: So Justin, we know if we go to Royal's platform, we can invest in your music. But what other sorts of artists can folks invest in? We talked about sort of the emerging side. But are established artists are also going to be offered on your platform? Like, is this, hey, I can also invest in Taylor Swift here, or it's, again, more of that independent artist?

JUSTIN BLAU: So I guess the way we think about it is it can be all artists, and we do have a number of really, really big artists that are going to use the platform in the future. In the short term, you know, our first experiment is me giving away ownership in a song. But in the future, the way you-- the means by which you would invest in an artist is actually in buying their music as art, as limited edition art. And then, of course, we assign IP based on your purchase.

So, you know, in the case of a Taylor Swift or, you know, a larger artist, like The Weeknd, you could actually own a piece of their songs. And that's your means of investing, right? But it's not exclusive to independent artists. It can be, you know, any type of artist. And, you know, any artist can basically resell the ownership that they own to their fans.

JENNIFER SCHONBERGER: And you're dropping a brand new song today, right? It's called "Worst Case." And you're offering 50% of those royalties through NFTs.

JUSTIN BLAU: Absolutely. So one of our first experiments with Royal is not necessarily a sale, but actually, you know, a concept that we like to call investing with your attention. So the 333 top Royal accounts-- we've made referrals to the platform-- they will each, you know, receive, or collectively receive 50% ownership in my new song, "Worst Case," that drops today. And as that song succeeds, those people who were very instrumental to the growth of Royal because they made all these referrals-- they will actually get royalties associated with the song.

So that's all happening today, which is really exciting. It's the first time anyone, any artist, to my knowledge, has actually given away ownership in a song to their fans. And it's going to be kind of like a first iteration of this experiment to show that, you know, there's a lot of power in aligning incentives between fans and artists.

JENNIFER SCHONBERGER: Do we know when the actual date is that Royal is launching?

JUSTIN BLAU: Oh, so Royal is live, at least for sign-ups, today. The first sale will happen within a month. But the first assets will be minted towards the end of this month. So for those who actually won the contest, the top 333 accounts will receive their "Worst Case" NFTs by the end of October.

JENNIFER SCHONBERGER: Justin Blau, great to have you. Best of luck to you. We'll be watching.

JUSTIN BLAU: Thanks so much, Jennifer.