Nas “ULTRA BLACK” NFT grants you a percentage of royalties from streams earned on platforms like Spotify and Apple Music generated by the release. It’s hosted on a platform called Royal. The date of the drop is Jan. 10th with a total collection size of 760. Let’s get to the breakdown.  

3 Tiers 

• Gold - For $50 you can purchase 0.0143% of ULTRA BLACK 

  • Supply: 500 

  • Price: $50 

  • 0.0143% of royalties 

  • Perks

    • Access to Hip Hop 50 Discord 
    • Access to Sweet Chicken Secret Menu 

• Platinum 

  • Supply: 250

  • Price: $250 

  • 0.0857% of royalties 

  • Perks

    • Exclusive Merch 

• Diamond - 

  • Supply: 10

  • Price: $5,000

  • 2.14% of royalties

  • Perks

    • 2 VIP Concert Tickets 
    • Exclusive Signed Vinyl 
    • Video Conversation with Hit-Boy 

In total, Nas stands to make $137.5K from the sale of 50% of the streaming revenue for ULTRABLACK.

Well, the first thing I think inquiring minds would want to know is how much they could possibly earn from the royalties. That’s pretty much the pitch as the description states “Royal tokens give you partial ownership in a song's streaming royalties.” So how much does a buyer stand to make from Nas’ streaming royalties? To answer that question we need a few things. One, we need to know the number of streams the track generates across all platforms. Two, we need to know the per-stream royalty rate of each platform. Being that most streaming platforms don’t disclose their streaming numbers we’re going to focus on the 4 that do and make an educated guess on the 5th. The royalty rates are based on the royalty reports I have access to from clients I work with. This isn’t perfect math, the point is to provide an idea of what possible returns there could be. 

Top 5 streaming platforms where we can see the numbers 

• Soundcloud - 3.7M | $11.1K 
• Pandora - 624K | $1.2K 
• Spotify - 8M | $24K 
• Deezer - 7.2K | $14 
• Apple Music - 2.5M | $17,500 

The song has been out for 17 months and has earned $53,814 which if we divide by 17 gives us $37,986 Annually from a total of 14,831,200. 

ULTRABLACK Annual streaming revenue: $37,986 

What does this mean for the return on investment? 

• Gold | $50 

  • $5 Annually - 10 Years to break even   

• Platinum | $250 

  • $32 Annually - 8 Years to break even 

• Diamond | $5,000

  • $812 - 6 Years to break even 

After you break even, everything you earn from that point on is profit and you’ll get these royalties for the rest of your life so it’s worth taking a long view approach. Let’s take a look at how things could break down over a 30-year period. 

• Gold | $5  x 30 = $150
• Platinum | $32 x 30 = $960
• Diamond | $812 x 30 = $24,360 

Buyer Benefits 

• The NFT itself is a collectible. People spend thousands of dollars to buy the Jerseys of NBA players, Baseball cards, and Trophies. Those things don’t come with any royalties, it’s just something that means something to the fans of those athletes. I find this no different. There are people that value owning a piece of a Nas record as a fan outside of any royalties. To that group of buyers, the royalties are almost negligible. What the royalties do, is authenticate the fact that the NFT truly represents an ownership stake and isn’t just symbolic. 
• Flippable Asset - Because the NFT is a collectible it can be resold in secondary markets so the buyer has an asset that can be flipped for additional profit. This is pretty much THE reason to buy. 
• Perks are also flippable assets. VIP concert tickets can be flipped, autographed vinyl records can be flipped. Right now, there’s an autographed copy of Dangerously In Love selling on eBay for $575.
• It’s Nas’ first drop so there’s a historical significance that adds to the secondary market resale value. 
• Royalties, if this is the reason you’re buying, good luck. First, it’s like one of those old-school investors telling you to invest in Bonds that will make you $30K in 30 years. Second, read numbers 3 and 4 below. 

Questions 

1. Royalties - Buyers will have the ability to resell their NFT in secondary markets on platforms like Opensea. Will buyers be required to pay a royalty to Nas when they resell the NFT? Other NFTs sold on Royal have come with a 5% creator royalty so I don’t see why that would be any different in this instance. It could be less, it could be more. Currently, the “legal” link that’s supposed to provide more details takes you to a dead page. Maybe they fix this by the date of the drop. 
2. Redeemable Perks - How does anyone know whether the perks have been redeemed? Do they plan to extend the perks to every new buyer? 
3. Collection and Distribution - How are royalties to be collected? Will they be collecting from Nas’ label Mass Appeal or from the streaming platforms directly? This is an important question if you’re buying for the royalties. Labels have never been thrilled about paying people and are notorious for finding ways to avoid doing so. How much can buyers depend on Mass Appeal to be honest and transparent about what a release generates? 
4. Will buyers receive royalty reports? Stream counts for most streaming platforms are private so buyers have no clue what the release actually generates in streaming revenue overall unless they’re getting royalty reports from the streaming platforms themselves. How many streams does ULTRABLACK generate on Amazon Unlimited or from China-based Tencent stores? Only Mass Appeal knows that and there’s no way to prove wrong whatever they say the numbers are. 
5. What happens if Royal folds? The entire process of monetization, collection, and distribution isn’t being carried out by a Smart Contract. The royalties are coming in by traditional means. You have Spotify and the like paying out royalties to labels that pay Royal which pays you. If there is no Royal, you may lose your royalties. 

Artist Benefits 

1. Advance of 3.6 years of royalties. Is this really a benefit? I don’t know Nas’ financial situation but something tells me he’s not holding his breath for the life-changing windfall of $135,000. After 3 years he’s taking an L and losing money. In 30 years, he would have sacrificed $1,139,580 for $135,000. Considering the track doesn’t get some type of Ghost Town DJs - My Boo viral video rebirth that pumps the numbers higher along the way. 
2. Secondary Market royalty - This would be the gold. There are only 760 NFTs available which means everyone else that wants it has to compete in auctions and outbid each other to get one. Auctions and fan demand for the NFT as a collectible can drive the value far beyond the return from the royalties. With a creator royalty attached to the NFT, Nas could earn a percentage of every resale of the NFT in perpetuity. 

Does it make sense? 

Selling royalties as NFTs only makes sense for the royalty percentage from secondary sales or if the royalties sell for an amount comparable to what an artist would earn in the next decade at least. With the royalties being the headliner, that’s what’s going to be the point of focus. Yes, fans will value the NFT as a collectible but even they will look at the royalties as a point of establishing value. It’s going to be interesting to see if the emphasis on royalties drags down the value of the NFT. I’ll be watching the sales for the $5,000 tier and resale market to gauge perception.

Sources

Apple Music and the streams and revenue of other platforms is guesstimated based on client streaming data. 

Top 5 streaming platforms where we can see the numbers and average per stream rate 

• Soundcloud - 0.003
• Pandora - 0.002 
• Spotify - 0.003
• Deezer - 0.002
• Apple Music - 0.007

Source of streaming stats - Chartmetric