Global Rockstar NFTs: Fairness in Times of Streaming

At the NFT music label Global Rockstar, fans can invest in songs by up-and-coming artists. This boosts the start of their career, ensures fairer payment, and also strengthens their rights thanks to blockchain integration.

Few have as comprehensive a view of the German-language music scene as Christof Straub. The double platinum and Amadeus Award-winning musician, songwriter, composer and entrepreneur has been an active part of the industry for over 30 years in a wide variety of roles.

With Global Rockstar, Straub runs a music label where fans acquire song rights via NFT-based crowdinvesting and participate financially in the musician’s success. The young Austropop shooting star Chris Steger recently showed that the concept works and can sometimes be really successful.

Steger’s song “Zefix” has been streamed more than five million times on Spotify alone, which is also reason for the investors to be happy: 1,300% return on investment in the first two years. The additional participation in revenues from live performances, physical album sales and song remixes also extends the hype financially.

Of course, Steger is the most pleasing exception in a business where no one can really predict a hit. But Global Rockstar also produces musicians outside of home-grown pop, most recently Anna-Sophie with “Cambodia” and ESC participant ZOË, who are on a similarly promising path.

Unchained. The Blockpit Magazine meets Christof Straub when he returns from a business trip to Berlin. The result is a conversation about the changing music industry, the recapture of music rights on a small scale, utopias from the blockchain and deeply personal things in the metaverse.

Unchained. The Blockpit Magazine: You had great success as a musician with Papermoon, especially in the 90s, but you also know the side as a producer and label operator. Is it easier to make music professionally as an artist today?

Christof Straub: It’s certainly not easier. It is still a big risk to embark on a music career. However, the possibilities are more diverse and the dependence on labels, as in the 80s and 90s, is history. Today, do-it-yourself artists can make an extremely big splash in social media, e.g. as Tik-Tok influencers, build communities and release products independently. Still a minority, but the possibility alone has made the industry more democratic.

Financially, artists still feel little of this liberation, especially in streaming. Isn’t there something wrong?

I keep hearing from artists that you don’t earn anything with streaming. But it really depends on the contracts. And many have bad contracts and are on labels where they only get a fraction of what they earn on top. You can calculate it roughly like this: One million Spotify streams generate about 3,400 euros across all streaming platforms. That means five million, ten million streams, that’s already money.

Streaming providers are one powerful player, labels are another. Depending on the source, majors pay 5-16% of the net royalties (fee income from the exploitation of a work, Ed.) to their artists. Can you do better?

At Global Rockstar, artists receive 40-50% of the net royalties. We do this by mitigating and sharing the financial risks that come with building and promoting artists. We call this “fractionalised ownership” and since 2017 we have been offering co-investors the chance to buy part of the music rights to songs, most recently secured as NFTs in the blockchain. This way, we can pay our artists higher royalties, support them from the beginning and make the business fairer overall.

When musicians give up their rights, what do they have left?

You have to think of it like this: We make about 40% of the copyright, which can be a recording and/or the work, available to the free market, i.e. music investors and fans in the form of NFTs, and the remaining 60% remains with the artists. These NFTs will also be tradable in the future, which means that artists will also earn money on the secondary market for the first time. This means that every time you resell your NFT, the artist will earn 5%. That’s a small revolution, because up to now they’ve had to watch through their fingers when it comes to private record or CD sales.

Many crowdfunding projects are not exactly designed for the long term. Products often appear slimmed down or not at all, and the money invested is gone in the worst case. How do you create security?

On Global Rockstar, you have a 70-year share of the income from streams and radio plays. Of course, not every song goes through the roof straight away. But you have to look at it this way: The artists we work with, in most cases, will not stop making music. They are great talents and sometimes it takes time until they have their breakthrough. What many forget: Their whole catalogue gains value. Everything they have released gets pulled along. That means it can definitely take years to get recouped (make your money back, Ed.). But you are here for the duration of the copyright and have the chance to break even sooner or later.

Unchained. The Blockpit Magazine: You had great success as a musician with Papermoon, especially in the 90s, but you also know the side as a producer and label operator. Is it easier today to make music professionally as an artist?

Christof Straub: It’s certainly not any easier. It’s still a big risk to embark on a music career. However, the opportunities are more diverse and the dependence on labels, as it was in the 80s and 90s, is history. Today, do-it-yourself artists can make an extremely big splash in social media, for example as Tik-Tok influencers, building communities and releasing products independently. Still a minority, but the opportunity alone has made the industry more democratic.

Financially, artists still feel little of this liberation, especially in streaming. Isn’t there something going wrong?

I keep hearing from artists that you don’t earn anything with streaming. But it really depends on the contracts. And many have bad contracts and are on labels where they only get a fraction of what they get on top. You can calculate it roughly like this: One million Spotify streams generate about 3,400 euros across all streaming platforms. That means five million, ten million streams, that’s already money.

Streaming providers are one powerful player, labels are another. Depending on the source, majors pay 5-16% of the net royalties (fee income from the exploitation of a work, Ed.) to their artists. Can you do better?

At Global Rockstar, artists receive 40-50% of net royalties. We do this by mitigating and sharing the financial risks that come with building and promoting artists. We call this “fractionalized ownership” and since 2017 we offer co-investors the chance to buy a part of the music rights of songs, recently secured as NFTs in the blockchain. This way, we can pay our artists higher royalties, support them from the beginning and make the business fairer overall.

When musicians relinquish their rights, what is left for them?

You have to think of it like this: About 40% of the copyright, which can be a recording and/or the work, will be made available to the free market, i.e. music investors and fans in the form of NFTs, and the remaining 60% will remain with the artists. In the future, these NFTs will also be tradable, which means that artists will also be able to earn money on the secondary market for the first time. This means that every time you resell your NFT, the artist will earn 5%. That’s a small revolution, with private record or CD sales they have so far looked through the fingers.

Many crowdfunding projects are not exactly designed for the long term. Products often appear slimmed down or not at all, and the money invested is gone in the worst case. How do you create security?

On Global Rockstar, you’re in for 70 years of streaming and radio play revenue. Of course, not every song goes through the roof right away. But you have to look at it this way: The artists we work with, in most cases, are not going to stop making music. They are great talents and sometimes it takes time until they have their breakthrough. What many forget: Their entire catalog gains value. Everything they’ve released gets pulled along with it. That means it can definitely take years to get recouped (make your money back, Ed.). But you’re in it for the duration of the copyright and have a chance to break even sooner or later.

The music business is very fast-moving. Do you give talents the chance to prove themselves, even if it takes longer?

We have learned a lot in recent years and we have moved away from selective attempts and the compulsion to put all our eggs in one basket. That’s too big a risk for investors, but also for us. It only works with sustainability and consistency. That means that every four to six weeks a new song should come out for each artist, so that we can feed the algorithms of the streaming providers properly. So we make contracts for at least six, better 12 or 24 songs. Ideally, we accompany artists for two years and beyond. That makes more sense because we can build them up for longer and serve the streaming stores consistently. Everyone benefits from this: the investors, who have the security of knowing that it won’t stop at the first release. But also the artists and us.

We’ve talked a lot now about funding, about what models look like that are more accommodating to musicians. Do your artists also gain a say in other areas?

You can’t do it without a say, that’s the basis. Artists must stand by a recording, must be able to represent a production. The blockchain takes this interpersonal component to a new level, benefiting artists, labels and investors alike. When you write something on the Blockchain, it’s immutable. And it’s traceable, even if shares pass from one to another. That’s a huge advantage over the past, where paper contracts were scattered around the world. Being able to trace who owned what, when and where decades later is essential in our business.

Christof Straub repeatedly demonstrates that he believes in the potential of blockchain. Among other things, through the ongoing exchange with blockchain visionary Don Tapscott, who presented his theses at a Global Rockstar press conference at the end of 2021.

You’ve known Don Tapscott for quite a long time, what have you learned from him?

Don is a great person and by now our exchange has become a friendship. As the mastermind behind the whole blockchain revolution we are in, he came up with some fascinating theories very early on. For example, Don initially dreamed of a completely decentralized music business, but then in our conversations he also acknowledged that the industry is not yet ready.

What is currently still lacking?

It’s simply an extremely ambitious undertaking. A completely decentralized music business means creating a parallel universe. There are those who do that, but you are in an environment that has nothing to do with Spotify, Amazon and collecting societies like AKM and GEMA. So you create a universe with as many users as possible and a model that executes an action, such as a payment, for every stream via the blockchain. So far, so good. The question is: Do we believe that superstars can be created in a parallel universe?

If we believe in the disruptive nature of blockchain, then why not believe in it?

Sure, we do. But you can’t forget one thing: You’re competing with giants that have invested billions and rolled out a userbase year after year. It’s a very complicated process. Spotify has had to roll out country by country since 2006 because of regulatory and legal issues, because you have to make contracts with the collecting societies of each country, and each country has different rules.

Let’s leave today’s problems aside for a moment. What will it take for the global streaming blockchain to become a reality?

To achieve this, we need to get all the players around the table: all the Spotifys, Amazons and Apples, all the collecting societies and, of course, all the major labels. Everyone would have to agree on a status, which is unfortunately still an illusion at the moment. It is a nice thought, but it will probably not become reality for the next 50 years.

The step into the metaverse is much closer. Global Rockstar also wants to take advantage of the opportunity in 2022. Where do you see the appeal?

There are already many ideas, such as making concert experiences more accessible. That can be concerts of avatars of your favorite band, that can be a long-dead band rising again, or a band that never gets tired and doesn’t need a break from touring. ABBA is already doing that on stage, why not in the Metaverse?

But isn’t that a bit strange, a concert in virtual space? It seems a bit… well, distant.

On the contrary, I see great potential in the interaction between fans and artists. I’m thinking of performances by our artists in the Metaverse or exclusive recording sessions where you can be there live and even comment. In principle, this goes so far that you can even book stars and put together your own band in the Metaverse that performs just for you. This is super exciting and can have a very personal touch that brings fans and musicians closer together again.

How to invest in music NFTs at Global Rockstar

At Global Rockstar, you can invest in the hits of up-and-coming artists for as little as 5 euros and purchase shares as music NFTs without any crypto knowledge. The Collectible Music NFTs are brand new. These are collector’s items from music history that only exist once in this world. Fans can purchase individual editions of unreleased music recordings that will not be released in the future in order to collect them or trade them on the Global Rockstar marketplace that will be released soon.

All Info: https://www.globalrockstar.com/