Powering a decade of growth
Artists and labels in the music industry are routinely denied access to capital despite track records of financial success. Asset-backed decentralised lending will change that.
In 2019, the global recorded music market grew by 8.2% to US$20.2 billion — its fifth consecutive year of growth.¹
Yet the industry has a financing problem. Artists have real difficulty in obtaining loans from traditional banking because their greatest assets — the copyrights they own or share — are not accepted as collateral.
The gap between the music industry and capital markets investors is curbing the potential of a sector set double over the next decade.²
Flip the funding
Opulous is a bespoke tool for the music industry that recognises the value of royalty rights, backing entrepreneurial artists with the financial tools to grow. Through tokenization, the platform will leverage an otherwise illiquid asset, giving artists and other industry bodies the clout they need to raise finance.
Financing restrictions drove recorded music’s business model in the 20th century. Labels would sign acts, provide funding, and recoup their investment by taking a share of the copyright attached to a recording. With few alternative ways to get the cash needed to, say, record, invest in gear, or promote material, the majority of artists were beholden to this centralised set-up.
But they needn’t be anymore. As the world’s first peer-to-peer finance platform backed by real-world music copyright assets, Opulous will give industry entities access to financial products, like loans and high-interest accounts, that have previously been denied to them.
Music funding, backed by music
Opulous, built by music industry specialists, will run on the blockchain to connect investors with artists needing a loan. Besides the security and efficiency advantages, two crucial elements make Opulous an ideal deployment for blockchain: tokenization and smart contract utility.
Tokenization has made working with digital assets like copyright much easier. Opulous can programmatically visualize the asset, along with the ownership splits and revenue chain tied to it — something banks have never been able to do.
Predictable royalty earnings become the basis to offer loans, and catalog ownership provides the collateral value. It means artists who in the past would have been overlooked will qualify for loans, while providing robust security investors demand.
Loan terms can be written directly into smart contracts, a unique feature of blockchain, which execute contractual obligations automatically. Royalties generated by the staked copyright can be immediately transferred to meet interest and monthly premium payments. Once the loan is paid back in full with interest, the copyright is automatically transferred back to the original owner, thanks again to the smart contract.
Opulous is backed by real assets, meaning zero risk to funds.
An open door for investors
Institutional investors have flocked to snap up back catalogs of industry titans³, but that only really benefits those institutional players on both sides of the deal. By adding a liquid layer to copyright and royalties contracts, as Opulous will do, the market for investing in them is blown wide open.
By utilizing smart contract technology, Opulous becomes a universal open platform in which any number of parties can take part. The peer-to-peer model means fewer overheads, so more profit can be paid out to investors. Unlike most De-fi platforms, Opulous is backed by real assets, meaning zero risk to funds.
Further token functionality will drive the transactional processes within the platform, but the key mechanism is to visualise and represent an otherwise underserved asset.
Handing back control to artists
The lack of investment across the music industry has entrenched a power imbalance that has always favoured the biggest players. It has stymied innovation, and shut out creators with a track record of success and financial stability from the freedom they would enjoy in any other industry.
Opulous will enable artists to act with more agility in financial markets, equipping them with entrepreneurial tools to drive their careers. In a growing sector, the rewards could be bigger than ever.
Building with some of the best
Built on the Algorand blockchain, Opulous has some of the best backing the business. With investment and partnerships from Borderless Capital, SOMESING, BASIC, TRUSTVERSE and others, Opulous has planted itself firmly as not only an exciting music app, but one that can transform the world of decentralised finance by using real world assets — music.
Ditto Music has been working with Elastos since 2019 on crucial research topics such as watermarks, decentralized identity, and blockchain bridges to prepare for the fast-approaching future where the data generated by content creators will stretch across multiple platforms.
As a sign of our confirmed staking plans and ongoing collaboration, Opulous will support staking of the ELA on Ethereum token as one of its first confirmed assets, alongside ETH. We encourage the Elastos community to stay tuned for further announcements in the coming days.
As part of our ongoing work with the Zilliqa blockchain we have been working with the team to develop cross chain staking mechanisms between Opulous and $ZIL and we will be announcing more exciting details for all $ZIL holders over the coming weeks.
References:
- IFPI Global Music Report: The Industry in 2019.
- Goldman Sachs, Equity Research. Music in the Air: Stairway to Heaven
- The Economist: Music royalties are proving a hit for investors
