How Band Royalty is Revolutionizing Music with Noble Drakoln: An EOFire Classic from 2021

0:02Who's ready to rock today, Fire Nation? JLD here and welcome to Entrepreneurs on Fire, brought to you by the HubSpot podcast network, the audio destination for business professionals. with great shows like The Sales Evangelist. Today, we're pulling a classic episode from the archives, and we'll be breaking down how band royalty is revolutionizing music. To drop these value bombs, I brought Noble, Dracone, and EO Fire Studios. Noble has been an avid music royalty investor for decades and started out as a features and commodities broker at the age of 19. And today, for our nation, we're talking about the beautiful ways to collect revenue on NFTs, how NFTs are not a fad, how to figure out what rights are being conveyed by these NFTs, and so much more.

0:43And a big thank you for sponsoring today's episode goes to Noble and our sponsors. Marketing Made Simple, hosted by my friend, Dr. JJ Peterson, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Marketing Made Simple brings you practical tips to make your marketing easy, and more importantly, make it work. A recent episode on whether vulnerability is a superpower and business is a must listen. Listen to Marketing made simple wherever you get your podcasts. Many EO Fire listeners have launched non-food franchises and Fran Bridge Consulting has guided them.

1:16Fran Bridge's founder and frequent EO Fire guest, John Ostenson, has done more placements than any other in the country and his service is free. Sign up for a consultation with John or get a free copy of his book, non-food franchising at franbridgeconsulting.com. All right, Fire Nation, here we are ready to roll And as I mentioned in the introduction, we're going to be talking all about how band royalty is revolutionizing music. And we have those two all-stars that I mentioned on the mic, Joe Calm and Noble Dracone. And we're going to be having some real fun today, having some real good conversations all about this revolutionizing of music.

2:01I've got just two studs on the mic with me here. So make sure you're strapped in. And this will be what I call a two listener, where you actually come back and listen to this episode twice, because there's going to be a lot of new concepts, a lot of things you really have to take some time to kind of bend your mind around. And then you're really going to get it. It's going to crack something open, and you're going to go all in with this new world that we now live in. So let's just start off with my man, Noble. Why Noble? Why is it important that we find a way to change the current music industry?

2:36Thanks, John, for having me on. I appreciate it. You know, it's fun to always listen to you and now I get to be on the show. You know, the music industry started way back, as we know it, in the jukebox era. And jukeboxes were the primary way that people would listen to music and they would find the most latest, greatest hits. And so all the royalty facets of it were designed around that concept. And the reality is most of the jukebox at the time were controlled by the mafia. And that was a way that they created revenue across town. So here we are, you know, it's 2021, and all the royalty laws actually derive from the jukebox era.

3:20Even though we have streaming, nobody knew. You know, give a good example. Pharrell did 43 million, at one point did 43 million, and since it's plus, 43 million plays of his music on streaming. They sent him a check for, I think, a little over$2 ,000. You know, the era of how music was performed and how they came with these royalties didn't never envision streaming and the way it functioned today. So the royalty side is just really broken. You know, we have things like Shazam, and Shazam will let you hear music immediately. But for some reason, it still takes ASCAP and BMI and some of the other CSAQ, other aggregators, months to give people their royalties.

4:05So the industry is just not functioning at an efficient level based on today's technology. I mean, let's just be honest. It's broken. It's a broken industry. And we live in a world now where we don't need to fall in line with the gatekeepers. We don't need to fall in line with two, five, ten people that make all the decisions for different things. We live in a world now that we can make our decisions. We can be the gatekeepers. I mean, look at what I'm doing right now, Fire Nation, with Entrepreneurs on Fire. Over a hundred million listens of this podcast over the past 10 years, and literally was me buying a microphone, hooking up to my computer and saying, I'm going to interview some really awesome people.

4:44And I had to go through gatekeepers and I had to go on a radio show or try to like, um, just go through that old school gatekeeper process. This is a new world, which is why we're talking about how Noble specifically and band royalty is literally going to be revolutionizing music. And so I want to kind of dive right into that noble right now with all the different music NFTs that are coming out. And for people, again, I told you this might be a two-listener, so you can really wrap your head around everything we're talking about. But I do have a resident expert on this topic who we'll be hearing from very soon, of course, Joel Calm, who I talked about in the introduction, and you heard from yesterday, of course, on the episode.

5:26But with all the different music NFTs, which are non-fungible tokens coming out. I mean, people are seeing the opportunity with NFTs in the music world. What specifically did you do, Noble, to make band royalties special? Let's not gloss over what musicians are doing in the non-fungible token space. You know, it's the idea of creating a collectible for your fan. And, you know, you have Kings of Leon. They created their album so their fans could actually own the album. You have people putting out special editions of their records. You have people going ahead for their concerts. I think another guy put out an NFT where he sold out his concert for$1.5 million using NFTs.

6:11And the cool part about it is you're able to create something special. It's almost like fan memorabilia that they could not otherwise get because we've been in a pandemic. There's no concerts going on. In fact, the majority of musicians make something like 70-80 % of their money touring, going out on the road, being in front of people, selling merchandise and the like. So it's really an awesome movement that musicians are trying to follow suit with the visual artists that have found tremendous success in non-fundable tokens. You had Beeple go to the Christie's auction, sell$69 million, the largest amount ever sold of a living artist.

6:52Insane. And it was digital. There's no physical prints. So, you know, the people look at non-fungible tokens and they look at the collector environment as a real clear way to kind of escape obscurity and to make themselves global immediately. But there's a problem with a lot of what's going on, I think, on the music side. And the music side, I think, has a limiting factor because unless people like that specific genre, whether it's country or, I don't know, rap or heavy metal, unless people like that specific genre, you're not going to really pull people in to your ecosystem that aren't already committed to you and already believe in what you're doing.

7:35And so when we created band royalty, we really focused on being music agnostic, meaning that all music has value solely because every piece of music we hear generates royalties among multiple verticals. They generate mechanical royalties. They generate publishing royalties. They generate synchronization royalties. They generate performance royalties. And then sometimes they'll generate producer and manager royalties. And so when we created band royalty, the focus was on the business of music. So whether you like rap or you like country or you like classical, it doesn't really matter because when you tap into our ecosystem, you're getting a behind the scenes access to the royalties that those types of music and all those types of genres produce.

8:23And so Band Realty for us is a celebration of both the diversity of music, the inclusion of music, and the ability to be a global brand day one. You know, we're talking to musicians in India who are super popular in Bollywood. Yeah. At the same time, we're talking to, you know, pop stars. Nobody in the United States has ever heard of, but super popular in Mexico. So there's a lot of music around the globe, and that's what makes Band Realty distinct. We're not a music NFT. We are a business of music NFT. And that's a key distinction. So I love all this stuff in Fire Nation. I mean, you just need to learn more about this industry.

9:04And bandroyalty.com is just a wealth of resources. It kind of really helped me understand everything that Noble's doing and everything that Noble is now talking about here by just going to his websites, looking at what he's created, looking at the roadmap that they have there, and just really understanding that, wow, you can literally now create a collectible. I mean, I love Kings of Leon. I used to listen to them all the time in my late 20s, early 30s. There's so many songs I can name with them. And to think about the opportunity of being able to own part of their album or actually own the album with my own individual NFT of that, that just is something that is a way for fans to give back, to feel more intimate with a listener, an artist, a creator, that they really resonate with.

9:52And that's actually where I want to bring in our resident NFT and just overall crypto expert, who's of course the podcast host of Bad Crypto, who we had on the show yesterday to talk in detail about all of this stuff. But Joel, what do you want to add on this topic right here to really kind of add to what Noble's talking about for our listeners, Fire Nation, to maybe grasp exactly what this opportunity is? For those of you that might not have heard yesterday's show, make sure you go back and listen because a lot of the basics about crypto and NFTs and why they're so important, you know, we covered more in depth.

10:29This particular project is fascinating to me because blockchain is so disruptive that it is truly changing dozens and dozens of verticals. And one of those areas that is prime for disruption is indeed the music industry. And what I love about this project when I discovered what Noble and his partner Barnaby are doing is that they're disrupting the music industry in a way that's very organic for them. Noble's background in music royalties goes back more than two decades. And he understands this industry and how broken it is. And it combines fixing that for the artists with the technology that we now have on blockchain and in non-fungible tokens so that everybody is a winner in this.

11:16You know, the what we would call big music, right, the big record labels that have won the most profits at the expense of the artists. They might not be quite as thrilled about it, but for everybody else, you know, from the musicians and the writers all the way down to those who enjoy the music, there's a great opportunity to collect beautiful NFTs. And I mean, they are stunningly beautiful, but they're NFTs that have something behind them. They're not just pretty pictures. You actually, by owning these NFTs and staking them into the platform, that's where you earn a piece of the performance royalties from these songs.

12:03And the song list, I mean, the artists that are part of the band royalty music catalog includes Beyonce, Justin Timberlake. I mean, we got Rihanna in here. There's big names and 50 % of the royalties that are earned from the different tracks that are in the catalog are going to be paid to those who own and stake their NFTs. So it's really exciting. Fire Nation, I hope you're starting to kind of grasp. Again, it took me a while as well. And of course, having Joel as my neighbor has been a huge help. And the interview that we did yesterday on Entrepreneur is on Fire, a must listen if you're kind of scratching your head because we get really down to the basics here.

12:42But not just even owning the NFT itself, which is a pretty special opportunity, but again, being able to partake in some of the recurring revenue that's going forward, some of the recurring royalties going forward. And just the overall opportunity for it to maybe just increase in value as an NFT as a standalone, but also as you hold it and you're staking it and it's actually yielding things like yielding revenue for you potentially. I mean, this is where things really get exciting. Things really get interesting. Frankly, we're just in a new world and believe me, it is worth your time to invest in yourself to learn more about this world.

13:22So Noble, let's be honest. I mean, it's not all rainbows and sunshine when it comes to these things. I mean, there are things that we really need to talk about when it comes to things like regulatory hurdles that can happen when it comes to new opportunities like this. So with your background in investing, what do you foresee as some of these hurdles for your specific NFT? For 28 years, I've been in the investment industry. I've written seven books on trading and I've run my own brokerage firm and hedge fund and compliance. And one of the issues when we created this was we wanted to make sure that the NFT had a standalone sale, that there was no direct rights given to the music.

14:07Just because you have the NFT, it doesn't give you ownership of the music and it doesn't give you rights to any of the music. It's you're buying an NFT. And so that's why I went in. Thank you, Joel. I really appreciate it. We really wanted to make the NFTs be art and a collectible in and of itself to have value. And we also limited the number of NFTs. You know, in this issuance, there's only going to be 3 ,000 NFTs. And then once they're gone, they're gone for the series one. That's it. But we also wanted to really create a mechanism that allowed people to stake and participate in different royalty streams.

14:42Again, you don't get any ownership when you stake. It's just part of the revenue. But we just wanted to give people an opportunity that their NFT has an intrinsic value or an opportunity or DEF, what they call decentralized finance, that will organically grow from us kind of connecting the NFT and you picking the pools of royalties that you want. So we set up initially three different pools of royalties. There's going to be a mechanical rights royalty pool. There's going to be a performance royalty pool. There's a synchronization pool, plus there's a publishing pool. And people get a chance to decide.

15:21But at the end of the day, it's just them sharing in the revenue. Now, of course, we're talking to attorneys and we're making sure that it's laid out properly so that it doesn't turn into a securitized instrument. But if we have to file whatever we need to file, we will. So the staking has really been set off for at least the next two to three months. So the staking will start in July. And that'll be after the actual ban token does an IEO. But we're excited and we believe that whatever the regulatory or potential regulatory hurdles there may be, we're going to be able to overcome them because we've designed an ecosystem that we believe is disruptive, but also is just smart for the times.

16:02Let me jump in for a second here and say, you know, some of the terms that Noble's using might be unfamiliar to many people who are just learning about NFTs for the first time, you know, words like IEO and tokens and staking, you know, might be useful to explain a little bit about what it means to stake an NFT. Thanks, Joel. I appreciate that. You know, what happens is you get into an industry and you get inundated by new language, right? When you stake or when you take your NFT, it's almost like doing a CD or deposit. So you take it off the board. So if you go to your local bank and you want to get a CD, they'll tell you, you can park your money with us for six months, a year, and different timeframes create in different interest levels.

16:50Well, that's what happened in the NFT world and in the online token world, that you can actually take these non-fungible tokens, these NFTs, these collectibles. And if you don't decide to sell them or trade them away or whatever the case may be, you can come back to our company, Band Royalty, and like a CD, put them on loan to us for a certain period of time. It could be 90 days. It could be six months. We have it up to five years. And you'll get a chance to participate in the royalty pool that comes in because we're allocating 50 percent of the income from all the royalties to all the staking pools.

17:29So you get a chance to just park your NFT with us and hold on to your collector's items and generate part of the royalties as time goes on. So again, Fire Nation, there is a lot here and that's why we're here. And that's why obviously I had Joel join us because Joel is the resident expert when it comes to these type of conversations. We're going to keep bringing him in as we continue this conversation. But some things we're going to be talking about coming up is where Noble sees NFTs in two to five years. And of course, I want Joel to chime in on that. And then, you know, really why Noble chose music and why now?

18:03I mean, there's some obvious reasons, but then there's some not so obvious ones we're going to talk about. Then of course, how you can learn more about the project and potentially even get involved when we get back from thanking our sponsors. Are you ready to start your year off with increased revenue, faster growth, and record-breaking performance? Well, a powerful sales platform can make it all happen. And for that, there's the all new Sales Hub from HubSpot. Sales Hub is an all on one platform, thoughtfully built with the tools and insights you need to communicate on a personal level with every lead, prospect and customer.

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21:01With over 2 million customers and a solid 100 % money-back guarantee, CBD Distillery is the source to trust. and I have a 20 % discount to get you started, visit cbdistillery.com and use code FIRE for 20 % off. That's cbdistillery.com, code FIRE, cbdistillery.com. Noble, Joel, we are back and we have some important things to talk about. First and foremost, let's start with you, Noble. I mean, you are someone who did dive headfirst into this NFT craze. You obviously saw the potential because of your vast experience and history with music and with royalties. So where do you see NFTs in, say, like a two to five year time frame?

21:48What's the future, Nostradamus? I really love the idea of non-fungible tokens. I love the idea of collectors and collecting. My biggest concern, and it's been from the beginning, is what happens when no one wants to collect. And when people are kind of exhausted on NFTs or it's been inundated to the point of where there's so much junk out there, let's be frank, that the good stuff is hard for people to find and or buy because they can't liquidate the junk they bought. And so when we look two to five years out, there's going to be a couple of real serious things that are going to have to happen.

22:28Number one, the people who spent a lot on non-fundable tokens on these collector's items, there's going to have to be a financial mechanism that is going to allow them to unlock that store value. And bit by bit, people are creating it. And that's when I said the DeFi, the decentralized financing, is really going to become a significant portion of the NFT space. I also believe there's going to be a lot of buyer's remorse. People bought things randomly because they saw the craze, but they didn't really look at what was the underlying value. So more projects that have real connections. You know, there was an NFT project recently where, and Joel can speak to this better than I, but they actually were able to sell NFT sneakers and then delivered sneakers to your home.

23:14So there's NFT projects recently with one of the baseball teams in which you actually got the physical bat in addition to the NFT collectible. There's going to have to be a real intersection between what people are getting digitally and then what they can basically hold on physically, whatever the format that looks like. And then I think there's going to be a need to really figure out what rights are being conveyed by these NFTs. So if I own an NFT, can I print a T-shirt of it? Or is it that I can only own the digital version and then I've got to pay an additional royalty if I want to make a T-shirt of it, even though it's a one of one?

23:52So there's these other things that we're going to start seeing over the next few years that are going to start parsing out and dividing up the rights of these NFTs. And we really, when we developed BAN, we tried to kind of be futuristic in our thinking. We wanted to make sure the NFTs look great, but the only right they conferred was the ability to tap into the royalty pools. We wanted to make sure there was some backing for the NFTs. If in two years nobody's buying them and they're not going up in value, well, you can at least come and stake them and know that you have access to the royalty pools.

24:25So, you know, with our limited prognostication, we were able to kind of build in some of the things I was already concerned about in day one with the anticipation that a lot of the stuff is coming down the pipeline. A lot of stuff is coming down the pipeline, Fire Nation. And Joel, this is where I'd love you to jump in here, maybe kind of round this out for a little bit broader than just the music space and talk about NFTs in general and just kind of where you see Fire Nation could help knowledge wise. You can call me Joel Stradamus. I am a little bit of a futurist. As you know, I don't necessarily see the future, but I do get there first.

25:03And it's not because I'm so smart. It's because I like to play with all the toys. And, you know, when you're the first kid to play with the toys, you discover some cool things and then you play with them some more. And invariably, people come to you and say, how did you do that? And that's how all my books got written pretty much. And so with NFTs, first of all, they're not a fad. As we addressed in yesterday's show, they are here to stay. And I promise you that because all you have to do is look at the collectible world, whether it's art or, you know, whether it's specific IP brands, bands, you know, no matter what it is, baseball cards have been sold for over 70 years now.

25:45And there's so many other collectibles that look at the success of Funko Pop, which by the way, are going to be launching NFTs here in the very near future. And, you know, they don't take up space. They're just, They're in your digital wallet. They don't get damaged by water or by fire. They can't get lost unless you lose your wallet, which isn't a good idea, unless you lose the keys to your wallet, which is an even worse idea. And, you know, they're secure. Transactions are instant. You don't have to worry about selling to somebody on eBay. And am I going to ship it? And maybe I'll get paid. Maybe I won't.

26:17Is it going to be what I said? You know what they said it was? It's always in the perfect mint condition. And this is the new way of collecting. They're not going away. I'll echo what Noble said, that the more of these projects that augment by backing them with something that may be physical or some other substance, I think is going to be important. But there are so many niches out there. Think of all of the bands. Everybody's got a favorite musician. Everybody's got a favorite film or TV show. Everybody's got their favorite brands. Even if the market seems inundated with NFTs from everywhere, when it's your favorite brand or band or actor that releases them, they're going to have your attention and you're not going to care how much of a glut there might be in the rest of the marketplace.