Putting out this month’s post a little early as it’s about a launch on the 11th. I have been following what 3Lau has been doing with Royal. I didn’t win any of the contests or get any pre-access so the first visibility that we have of NFT ownership to get a dividend secured against the streaming revenue is with the NAS drop. But I wanted to take a look to see if the dividend is fair for the investor/artist and whether this has any real legs beyond just trading on HYPE then crashing and burning.
So, what is being sold? Royals are offering up two different songs, Ultra Black and Rare, for sale.
So I did a little googling and it seems that you can get Spotify stream information from a site called Chartmasters which helps me to work out if these are well priced or not.
However, it gave no information on “Rare”. So I will have to look only at “Ultra Black”
Ultra Black was released on August 14, 2020, so it's doing 15,563 streams a day or 5.724 million streams a year on average since release on Spotify. I have done a quick google to see how much an artist earns from a stream on Spotify and Free your music puts this value at $0.004 a stream on average so let's use that value. Once you translate this into dollar values NAS is earning $62 a day or $22,900 a year for Ultra Black on Spotify. Other streaming services exist so let's try to quickly approximate the revenue that Ultra Black can earn on those platforms. I have found a market share diagram put together by MIDIA. So let's assume that the streams that Ultra Black can achieve on other platforms are scaled by the user-ship of each site. This feels like a fair assumption to make as I can’t imagine an artist will be hugely more popular on one platform than another. So as a result I have approximated the streaming figures since release as below :
Now I have taken the streams since release and translated them into yearly earning figures to give me my estimated yearly earnings of Ultra Black as $83,447.75 (all values are in dollars my pc just defaults to pounds as I am a brit!)
Now that we have an approximation for the earnings of the song, We can work out what our tiny little piece (if we are lucky enough to buy one and it doesn’t sell out too quickly) could earn and compare that to its cost.
So ya potentially 20+%. Seems like a crazy good deal. The only issue that I see is how much of the current streaming numbers are long-lasting as the long tail is vs the new song hype. But for those returns, it seems to be worth the risk for me… Assuming I can get a share!