Tokenize This: Week 8 ~ Tokenized Music Artists
Kickstart your favorite SoundCloud artist and reap the rewards alongside them
Imagine funding Post Malone back in 2014? And watching in the present day as he took over the music game, fully knowing that you’re fortunate enough to have a direct stake in his success — both as a fan and an investor.
$0 to over $30 million in that time frame.
Post Malone is largely seen as the face of SoundCloud success. He grinded it out on his own and took a leap of faith tagging along with his similarly-minded friend to Los Angeles when he was 18 years old, where he would pull out all the stops to reach the next level in his music career.
White Iverson officially put him on the map in 2015 with a QUICK 1,000,000+ views followed by numerous phone calls from record labels.
If Post is the product and labels are the VCs, imagine being the Angel Investor in this equation.
As we’ve explored in previous editions, security tokens can be a very powerful avenue for meaningful fundraising — “meaningful” in the sense that not all cash is created equally, and funding from true early fans can provide that extra drive to kick artists up a tier.
Value Adds
Music Artist (Token Issuer)
- Access to a source of startup funding directly from their fanbase which can be used for production expenses, touring, branding, and similar necessities
- Create an even stronger bond with their fans through the nature of security token financing which will incentivize fans to contribute in spreading the artist’s work more rapidly than usual
- Add-on funding can seamlessly be raised through additional token offerings, and is more likely to be completed through original fans and their contacts
Fanbase (Token Holders)
- Pride of having a direct involvement in their favorite artists’ success and professional trajectory
- This direct involvement comes in both a supportive and monetary fashion, which provides token holders with the opportunity for future cash flows and earnings as the artist gains traction
- Ability to resell tokens in the secondary markets for capital gains, which is probable as the artist grows in popularity and demand for their tokens increases
Continuing on with Post Malone’s surreal story, the tipping point was finally reached when he dropped the White Iverson music video. Per Promolta:
Post Malone loves telling this story. The music video for “White Iverson,” the song that made his career, cost him only five thousand dollars. The catch was, he only had less than five thousand dollars left. He had to borrow money from a friend to make the video.
Five grand is what it took to get the world’s attention. That is the kind of result that independent and up-and-coming artists routinely dream of.
Five grand for a music video that’s currently nearing 900 million views.
For simplicity’s sake, if an artist or group is limited to a budget of $5,000 themselves and have a collection of 10 songs, which song do they deem will take them mainstream? What if Post’s White Iverson music video fell on deaf ears even after all the noise the single made on SoundCloud? What if he chose to roll with a different single that didn’t catch fire? Would he be the household name he is today?
Unfortunately, it’s extremely likely there are hundreds, thousands, even millions (that may be a bit much, but hey it’s a digital age!) of independent artists looking to follow in Post Malone’s blueprint but falling short. That’s not to say the talent isn’t there, but perhaps the talent feels stifled with the urgency of success.
Artists bootstrapping their own funds to scrape together homemade singles, mixtapes, and videos can only go so far. Their likelihood of succeeding in these endeavors increases X fold with the backing of fans in a monetary way.
Had Post Malone dropped the ball on the White Iverson video and blew his final $5k (and assumed interest on the loan), production would have halted until he raked up enough to try again. However, with a series of financial backers via security tokens, not only would Post Malone have likely had many tens of thousands of dollars to work with through his millions of fans (remember, White Iverson gained traction FAST), but he could also communicate and keep his fans in the loop seamlessly.
Even in dire situations that would slow Post, tokens could be released in exchange for funding that kept him afloat for multiple video shoots, pop-up concerts (venues cost money to rent out, after all), professional recording time, and branding expenses.
For those who follow smaller-time artists on SoundCloud, Spotify, Apple Music, and YouTube — imagine what they could do with you and thousands of other fans backing them.
$0 to $30+ million in ~5 years. That was Post Malone’s glow up. If that potential doesn’t excite you, then you need to dive deeper into the indie world.
A few of my favorites are Blockchainz, Lauz, Johnny M in the Mix, JLani, and K A R K E Y S if you need some inspiration :).
Find yours, invest in them, and maybe in a few years everyone will be wishing you Congratulations ;)
SoundCloud
As the incumbent in the underground music world, SoundCloud has minted its fair share of artists who “made it.” With Post Malone being the premier SoundCloud icon, other stars who got their starts include Bryson Tiller, Kygo, Kehlani, The Hails, and Two Friends. From rappers to indie rock to EDM and Deep House, SoundCloud has its grips on artists of all genres and abilities. Mix in the platform’s widespread user base and security token functionality could be operational sooner rather than later.
WAV
WAV is a live-streaming music platform that connects artists with fans and listeners in real-time. The platform has PayPal integrated to “turn digital gifts into actual money” and a network of labels, media and production partners on standby for artists who make significant waves. Given this emphasis on artist support, WAV could kick it up a notch and implement security tokens for listeners who not only want to gift a one-time donation, but invest in the artist’s future. Utilizing different tiers of payments could sift out casual listeners from the whales looking at new investment opportunities.
I anticipate exploring other aspects of this concept and the music industry further in the future. In the meantime, New Topic coming next Wednesday 3/10/21!
Disclaimer: This is not financial or investment advice and should not be interpreted as such. Please do your own research on investments and financial decisions before partaking in any ideas or ventures depicted in this publication.
