Justin Blau, famously known by his DJ alias 3LAU, made headlines last year for being the first musician to sell an album as an NFT. Ultraviolet, the album in question, earned him $11.7 million, when the artist gamified the sale in the last 3 minutes of the auction, having the timer reset every time someone was outbid. Singer-songwriter LUNA AURA, aka Angela Anne Flores, collaborated on the 2017 single “Walk Away,” which later appeared as the sixth song on the record. Rolling Stone confirms that Flores has now filed a lawsuit against Blau, accusing him of unjust enrichment and breach of contract.
The two artists entered a contract in November 2017, which stated that Flores would receive a “basic royalty rate” on top of her 30% cut in the song’s publishing. 3LAU entertainment, however, owns the sole and exclusive rights to the masters.
3LAU’s NFT page currently states that “a secondary marketplace where exclusive 3LAU Ultravolet collection NFTs can be bought and sold” is “coming soon.”
The FADER has reached out to 3LAU and LUNA AURA’s teams for comment.
Американский электронный музыкант 3LAU (произносится как «Блау») в феврале продал первый в мире цифровой токенизированный альбом, заработав более 11,6 миллиона долларов менее чем за 24 часа. Он выставил на продажу 33 невзаимозаменяемых токена (NFT), к которым были привязаны треки из альбома.
Каждый актив на блокчейне (цепи из блоков в системе биткойнов) называется токеном. В открытом блокчейне все токены равны, и один можно заменить другим. Технология Non Fungible Token (NFT) работает по-другому: каждый токен является уникальным, и его нельзя подделать, разделить или заменить — идеальные условия, чтобы закрепить свои права на произведение искусства.
Каждый из 33 участников аукциона 3LAU получил свой NFT-токен. Самый дорогой токен позволял заказать у 3LAU создание трека с учетом пожеланий его владельца. Также покупатель этого токена получал 11 виниловых пластинок, все песни из альбома и неизданные треки. Токен был продан за 3,6 миллиона долларов.
Помимо 3LAU, осознавать потенциал для получения дополнительной прибыли с помощью токенов начали и другие музыканты. Собственную коллекцию NFT-токенов выпустила певица Grimes. Ее токены были привязаны к десяти произведениям, которые Grimes создала в коллаборации со своим братом, цифровым художником Маком Буше. Всего за 20 минут артистке удалось заработать на продаже NFT более 5,8 миллиона долларов.
Также стало известно, что 5 марта группа Kings of Leon выпустит специальную NFT-версию своего нового альбома «When You See Yourself».
Photography by Daniel Rodriguez
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Considering 2021 was a massive year for music NFTs, it feels as though the time of community music ownership may finally be upon us. Just a few months after launching their new platform Royal, Justin Blau and JD Ross have taken another step towards decentralizing the music industry by recruiting hip-hop legend Nas for the marketplace’s inaugural drop.
With this latest move, Royal has expanded upon its mission to offer collectors ownership in songs via NFTs. By bringing on top-tier, Grammy-winning recording artists Nas for Royal’s genesis drop, the growing platform is quickly becoming a force to be reckoned with in both the NFT space and music industry.The collection will feature Nas’ tracks “Ultra Black” — the lead single from his 2021 Grammy Award winning-album King’s Disease — as well as “Rare” — a single from his 2022 Grammy Award-nominated album, King’s Disease II. Both songs were originally released via Nas’s independent label Mass Appeal and will be available to collect via Royal on Jan. 11 with “Ultra Black” dropping at 1 p.m. ET and “Rare” dropping at 9 p.m. ET.A limited supply of 760 tokens total will be available for “Ultra Black,” with streaming royalty ownership separated out into three tiers. Gold tier will offer owners 0.0143% streaming royalty ownership for $50, Platinum tier will offer 0.0857% streaming royalty ownership for $250 and Diamond tier: 2.14% streaming royalty ownership for $4,999.“I am always looking for new and unique ways to connect with my fans,” said Nas via statement. “I am excited to partner with Royal on their new endeavor in order for my fans to connect with my music in a new way.”Created by Blau and Ross, Royal has seen resounding success since its launch in Oct. 2021. Through tokenizing music rights, Royal has communicated NFTs to be a useful tool not only for up-and-coming, digitally native artists but as a way to onboard new fans and bolster the communities of even the most seasoned superstars.“Having Nas be the first artist to sell royalty rights through Royal is an incredible affirmation of our mission,” said superstar DJ and Royal CEO/Co-founder Justin Blau. “It’s proof that artists across genres feel strongly about democratizing ownership of their music, and that they want to be connected to their listeners on a deeper level.”
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The DJ and cryptocurrency pundit appeared on the «Chain Reaction» podcast to explain what gives music NFTs value.
3LAU’s NFT marketplace Royal is on a mission to revolutionize the nostalgic pastime of collecting music.
After launching in the second half of 2021, the platform quickly amassed a $55 million war chest in a funding round led by Andreessen Horowitz. Since then, Royal has facilitated attention-grabbing NFT collections, including offerings from Diplo and Nas. Last month, Darya Pourshasb, former Director of Premium Content Strategy at Spotify, made the leap to join Royal’s leadership team with an eagerness to continue growing the brand’s partnerships within the artist community.
While the industry at-large appears to be lining up behind Royal, 3LAU remains laser-focused on illuminating the emotional and intrinsic value of music NFTs for consumers. Speaking on TechCrunch’s «Chain Reaction» podcast, the DJ and cryptocurrency pundit says his personal barometer for determining what makes a good NFT project is to consider whether it incentivizes a digital behavior that similarly exists in the real world.
“I think the music example is specifically the most interesting, where collecting an actual audio file for thousands and thousands of dollars just doesn’t seem to make sense, because no one would do that in the real world,” 3LAU said.
It’s the Grammy-winning band’s first-ever performance in Romania.
DJ sets from Eric Prydz, Carl Cox, REZZ, Hardwell and many more electronic music superstars have also been confirmed.
The Lost Lands team have also hinted at a reveal surrounding their virtual festival, «Couch Lands.»
3LAU performs at the 2022 edition of EDC Las Vegas.
You can listen to the full «Chain Reaction» episode below.
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Andrew Goldstone, Blau’s manager, tells Rolling Stone, “These claims are without merit, and we will vigorously defend the lawsuit that was just filed yesterday without any prior notice. There are no set standards for how to approach an NFT project like this, which involved much more than just the music. Justin’s team tried for months to reach a deal with Flores in good faith, but she stopped responding and instead chose to file a lawsuit.”
According to the lawsuit obtained by Rolling Stone, Flores and 3LAU Entertainment entered into a contract in November 2017 for a song that later came to be called “Walk Away.” While 3LAU Entertainment was given the “sole and exclusive right” to the master recording, the contract stipulated that Flores would receive a “basic royalty rate” on top of the money she received from her 30 percent stake in the song’s publishing.
“Walk Away” was released as a single on Dec. 1, 2017, and it later appeared on 3LAU’s album, Ultraviolet, which arrived on Feb. 16, 2018 (via Blau’s own label, Blume). Though the album performed well, it arguably garnered the most headlines in February 2021, when Blau celebrated its third anniversary by minting a collection of NFTs around the album and selling them for a reported total of $11.6 million.
As Flores’ lawsuit notes, the digital tokens also came with some real-life extras, such as access to unreleased music and experiences (like the chance to make a song with Blau). Some tokens were also redeemable for “special edition physical vinyl records” of Ultraviolet. There were also “at least eight NFTs specific” to “Walk Away,” which allowed anyone to listen to the song (not just the owner of the NFT).
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According to the suit, Blau did offer Flores the one-time payment of $25,000 as compensation, though no agreement was signed. Meanwhile, the lawsuit adds, the Ultraviolet and “Walk Away” NFTs are still being marketed and sold “without compensating Luna Aura.”
3LAU Made Millions Off His Music NFTs. Now a Collaborator Claims She’s Owed a Cut
Luna Aura, who appeared on 3LAU’s single «Walk Away,» says she wasn’t compensated when NFTs of that song were part of the DJ/producer’s $11 million NFT sale
Image Credits: Tim Mosenfelder / Getty Images
When people think of NFTs, the first use case most of them likely think of is visual art. From Beeple’s $69 million sale of a digital collage at Christie’s to the Bored Apes Yacht Club collection, visual art has seemed to be the most prominent use case for NFTs due to close similarities with traditional fine art investing. The fact that digital art can be viewed and replicated endlessly online has led to some confusion for plenty of consumers with what exactly they’re buying, however.
“The idea that someone can just say, ‘hey, this is mine now, I just saved the image to my laptop, and I’m using it as my background,’ — it seems really obvious. But then when there’s a real, true owner, and you can validate that on-chain, it makes that other person look kind of foolish, at least within the web3 community,” DJ and NFT art collector Justin Blau explained in an interview on the TechCrunch podcast Chain Reaction.
Music, for example, is invisible, so it wouldn’t make sense for music NFTs to be applied the same way as NFTs for visual art, he said.
“It’s not a commoditized type of asset. The only way people have collected music in the past is with CDs and vinyl, and right now with a streaming service. Everyone’s music collection is theoretically the same, right? You pay the subscription, you get access to everything,” Blau said.
To evaluate whether an NFT project makes sense, Blau likes to use the framework that if a behavior exists in reality and can be replicated in the digital world, it will likely be a successful use case for NFTs. If a behavior doesn’t already exist, it probably isn’t the best manifestation for NFTs, he added.
“I think the music example is specifically the most interesting, where collecting an actual audio file for thousands and thousands of dollars just doesn’t seem to make sense, because no one would do that in the real world,” Blau said.
Streaming income represents about 84% of all income generated by music, he added. The reason artists receive so little of that income, in Blau’s view, is because of middlemen like record labels taking a cut, not because streaming itself is not lucrative.
Royal’s platform will eventually allow digital asset holders to be able to engage directly with artists and access exclusive perks, such as token-gated shows, he noted.
You can listen to the entire interview with Blau on our podcast, Chain Reaction. Subscribe to Chain Reaction on Apple, Spotify or your alternative podcast platform of choice to keep up with us every week.
The DJ and crypto enthusiast is gearing up to launch Royal, an NFT marketplace for music fans who want to — literally — invest in artists
He adds that Royal has pulled in more than 2,000 artist inquiries since its announcement, and over 200 of those have at least 500,000 monthly listeners. “Many have millions,” he says. “A couple have 20 million-plus.”
Earlier this year, 3lau made mainstream headlines when he became the first musician to sell an album as an NFT, earning upwards of $11.6 million in less than 24 hours. But even before that, he had already tested the waters with a tokenized, special edition of his song “Everything.” That generated, at the time, $250,000: “That’s more than any advance that a record label would give for a single,” he says. Now, he’s trying to introduce “a new asset class to the masses,” as he puts it, and mold the idea of “collectible music” into something that’s sustainable, with a musical stock market of sorts.
“When you own a piece of music as art, as a fan, you should actually own that music,” he says of the duo’s vision. He explains that fans will earn royalties both on-chain and off-chain on platforms like Spotify, Amazon, and Apple Music, because Royal is not a streaming service — it’s just selling tokenized contracts.
3lau believes that being a partial owner will incentivize fans to stream and advertise music more — and, in theory, that benefits everyone from the artist to the fan, and even the label if the artist is signed. “Fans, who are primarily responsible for all the distribution of music, don’t capture any of the upside, even though they’re creating all the value,” he says of the current landscape.
While 3lau owns 100 percent of the song that he’s releasing — because he wrote, recorded, and funded it all on his own — he recognizes that’s not often the case in the music industry. On Royal, major-label artists are welcome too; they’d just be selling a percentage of whatever rights are under their ownership.
For “Worst Case,” which is a pandemic-inspired song, 3lau will manually send its future rights-holders their cut as he’s paid on a monthly basis. (Since he uses Stem, these parties will be able to track the earnings in real time.) However, 3lau’s team is currently building an automatic-payment interface designed to live within Royal.
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An interesting lawsuit was filed last week against DJ and producer 3lau in a dispute over a mega-bucks NFT auction that he staged in early 2021 linked to his 2018 album ‘Ultraviolet’.
3lau – real name Justin Blau – has been sued by Luna Aura, who co-wrote and appeared on ‘Walk Away’, a track that appeared on ‘Ultraviolet’.
The producer’s NFT auction that coincided with the third anniversary of the record offered buyers various products and perks, all linked to his 2018 record, and some specifically to ‘Walk Away’. The auction generated more than $11 million for the producer.
Blau did offer Flores a one-off payment of $25,000 in relation to the NFT sale, but she doesn’t consider that the be an appropriate fee given how much the wider NFT auction generated for the producer.
It’s an interesting legal battle because, despite all the hype and chatter around music NFTs in the last couple of years, there remains no real consensus on how they should be licensed when recordings are part of the offer, but the artist or label leading on the NFT drop does not control all the rights in the songs contained in those recordings. Which they frequently won’t.
There are industry conventions for how revenues should be split between the recording rights and the song rights whenever recorded music is exploited, but those splits differ depending on the usage, meaning that with new products it’s not clear what kind of split is fair.
There is also often much disagreement as to what the splits should be. Plenty of songwriters and music publishers argue that the split on streams is still unfair, despite streaming having been a key revenue streams for years now, and the song right split having increased slightly over the last decade.
In the US, song royalty rates are actually set in law in many circumstances, including with downloads and discs, and most music NFTs usually involve a download and/or a disc. Though those statutory rates are set in cents not a percentage of revenue, which makes them seem very inappropriate for NFT sales that generate millions.
Then of course, with music NFTs, there are extra complications. First, as with the 3lau NFT campaign, buyers of each non-fungible token get various different products and perks that need to be taken into account.
And second, there is a debate to be had regarding the extent to which the value of any one token comes from the music connected to it, and the extent to which it’s really all about the artist’s brand.
With all these uncertainties and complexities, it’s probably wise to sort out any licensing bespoke before going ahead with a music NFT project. But that could stop a project from going ahead at all. And presumably Team 3lau were keen to cash in on all the early 2021 NFT hype which was leading to tokens going for super silly money.
Either way, Flores reckons that Blau failed to fulfil his legal obligations in relation to ‘Walk Away’ before launching the ‘Ultraviolet’ NFT drop, meaning he and his company 3lau Entertainment are liable for breach of contract and unjust enrichment.
Blau has already hit back at Flores’s claims. His manager Andrew Goldstone told reporters: “These claims are without merit, and we will vigorously defend the lawsuit that was just filed yesterday without any prior notice. There are no set standards for how to approach an NFT project like this, which involved much more than just the music. Justin’s team tried for months to reach a deal with Flores in good faith, but she stopped responding and instead chose to file a lawsuit”.
Justin Blau (3LAU) and JD Ross, Royal’s founders
Electronic dance music artist and producer Justin Blau, a.k.a 3LAU, stirred the music industry in February when he sold the world’s first-ever tokenized album, which grossed $11.7 million in under 24 hours and briefly held the record for the most expensive single non-fungible token ever sold. In total, the musician has earned over $20 million from more than a dozen NFT auctions over the past year.
Now he wants to enable fans to earn money alongside their favorite artists, establishing music as an investible asset class.
Today, 3LAU is announcing the launch of music investment platform Royal with $16 million in seed funding led by Peter Thiel’s Founders Fund and Paradigm, a crypto-focused investment firm founded by Fred Ehrsam, co-founder of Coinbase, and former Sequoia Capital partner Matt Huang.
Through the new venture, he and his team hope to introduce tokenized ownership in songs’ master recording rights as well as offer the collectors special privileges including concert tickets, backstage passes, merchandise – all through the so-called Limited Digital Assets, Royal’s own version of non-fungible tokens (NFTs).
It “changes the game for creators. They can go direct to fans, no intermediaries or labels needed. “Conversely, fans can invest in their favorite creators,” said Fred Ehrsam in a comment to Forbes. “Investing and culture are melding into one. Royal is making this possible.”
According to Blau, Royal will gradually roll out the platform in beta-version over the next six months with limited access, with the aim to scale it to full-capacity in the next eight months to a year. The team is already in conversations with a few popular artists that it hopes to bring onto its platform but is not disclosing any names at this time. Royal will charge them a fee of less than 10% for a standard NFT sale in the short term, but hopes to eventually make the project entirely “community run”.
And while Blau believes that Royal is meant to disrupt the Sony and Universals of the industry, he doesn’t exclude the possibility of collaborating with labels, ultimately seeing the company’s role in providing technological tools that help fans participate in artists’ success. “Royal’s mainly a solution for artists that have complete music and have existing small or large fan bases, but the actual completion of music is part of the process that I think labels will always serve a purpose.” Blau says. “We certainly don’t want to close any doors.”
Justin Blau, a.k.a. 3LAU, made his initial sheckels as a DJ. He hopes his success with NFTs pave a way for musicians—and other artists—to develop new revenue streams.
The Blau family gathered last weekend to celebrate a couple of things: the second and final Covid vaccination for grandpa Blau—and the live, multimillion-dollar internet auction featuring a newly booming type of cryptoasset put together by 30-year-old Justin Blau, the clan’s host at his suburban Las Vegas home.
“We were all cheering, and then everyone just stopped talking,” Blau says, reflecting on the sale for the first time. He gives a short, incredulous laugh. “Trust me, I didn’t know it was going to go this high.”
The cover art included in DJ Justin Blau’s recent NFT sale, a rerelease of his 2017 album «Ultraviolet.»
Rushing to meet this crush of newly enthusiastic buyers are thousands of digital artists eager to capitalize on their attention. And among that set, Blau, having nursed an interest in crypto for almost a decade, has cemented as himself as the space’s most coveted name, reliably orchestrating its highest-profile and highest-volume sales. After assembling over 15 auctions since September and raising close to $13 million, Blau is “the thought leader—the gold standard,” says the pseudonymous WhaleShark, one of the largest NFT collectors. He paid $3.5 million for a 3LAU token in the latest offering. “I’m not even exaggerating. He has a tremendous amount of commercial and technical savvy that balances with his artistic ability.”
As WhaleShark points out, NFTs exist at an intersection of business, technology and culture, a place Blau comes to naturally. He studied economics and finance at Washington University in St. Louis but found himself spending much of his time honing his turntable skills at fraternity parties. After turning down an internship at Black Rock, the giant asset manager, he dropped out as a rising senior. Unsurprisingly, his parents were opposed—until a call came from one of Blau’s economics professors. The teacher had examined the income stream from his gigs, attended several of his shows and concluded Blau had a reasonable chance at success. (“He thought the opportunity cost was too great to not let me do it,” Blau says.) As it turns out, the prof was right. Within a few years, Blau was playing the largest dance festivals in the world, like New York’s Electric Zoo and Chicago’s Lollapalooza, alongside artists such as Marshmello, Afrojack and Steve Aoki.
The result of his studies: a plan to fundraise and assemble a festival through an initial coin offering. (These so-called ICOs turned into a bubble during 2017 and 2018, minting a great number of fleeting fortunes.) Eventually, Blau decided to scrap the ICO plan, worried the offering could run afoul of authorities. “I had great lawyers,” all of whom were advising against it, he says. “We didn’t want to do anything wrong.” He did go ahead with the festival, allowing attendees to use crypto to buy tickets, merchandise, food and beverages, among other items.
Two images designed by the digital artist Slimesunday that appeared in early NFT offerings from Blau.
As Blau was contemplating his initial foray into crypto, NFTs were still a fledging idea. Early interest in the tokens were driven mostly by CryptoPunks and CryptoKitties, two sets of collectible cartoon images bought up the way past generations acquired baseball cards or Cabbage Patch dolls. (Originally given away gratis, CryptoPunks and CryptoKitties now resell for six or seven figures.)
Blau wouldn’t latch on to the idea to sell NFTs until Covid brought the music-touring business to a halt, cutting off artists from their main income source of income. He was looking to make up some of the lost earnings and forge a path for himself and other artists interested in a revenue stream they controlled themselves—away from producers and record labels.
The record-setting sale from the past weekend was done a little differently than most NFT offerings. In the biggest departure from ordinary practice, the auction occurred on Blau’s own personal site. Most NFTs are bought on one of the big exchanges, such as OpenSea and the Winklevoss-owned Nifty Gateway. Blau’s decision to control the entire event probably points toward what future brand-focused artists might do, choosing to put together a custom site rather than go through a third-party marketplace—granting them the ability to add features like the resetting clock, something Blau thinks greatly helped goose up prices. “It’s caught the attention of the entire music industry,” says Matthew Liu, cofounder of Origin Protocol, the NFT startup that set up Blau’s bespoke page. “Every major label, every major artist are blowing up our DMs and our inboxes right now.” Blau is readying plans for another sale on March 12, though it may not be another record-setter: He’s considering pricing those tokens at lower rates to draw in buyers new to the space.
While excitement around NFTs certainly abounds, so does criticism that the tokens are merely the latest thing in crypto to spark a mania. Blau doesn’t fully disagree. “The prices are crazy. A lot of people are also speculating on this. We have to acknowledge that—we have to acknowledge the fact that this is a little bit out of hand,” he says. But he’s quick with a riposte against the most disparaging critics. “They’re saying, ‘Why is this digital art going for this much money? I could copy that.’ Well, I could copy the Mona Lisa and put it on my wall. That doesn’t mean I own the original.”