Warner Music Bets Big on Blockchain, Joins $11M Investment In Cryptocurrency Start-Up Dapper Labs

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Photo Credit: CryptoKitties

Warner Music Group, one of the world’s largest recording companies, has invested in blockchain technology for the first time, joining an $11.2m investment round in Dapper Labs, the company behind CryptoKitties. CryptoKitties is an Ethereum-based cryptocurrency game that allows users to buy, sell and breed virtual cats, which became so popular that it contributed to transaction issues on the Ethereum blockchain. However, Warner Music sees potential beyond the game’s popularity and is aiming to use blockchain technology to develop tradable digital merchandise that can establish digital authenticity, such as signed albums, artist merchandise or other objects.

Warner Music’s Senior Vice President of Business Development, Jeff Bronikowski, said the company’s blockchain would work with Dapper Labs to “create digital assets” using a new public blockchain technology called Flow. The Flow blockchain is designed to handle transaction volumes many times greater than Ethereum. Warner Music is betting big that Flow will provide digital authenticity in the future, as these non-fungible tokens can be used to distribute signed albums or other objects, which can accrue real value.

Warner Music’s investment in Dapper Labs is part of a larger funding round, which also includes Andreessen Horowitz, Digital Currency Group, Venrock, and others. The $11.2m round of fundraising will be spent on finishing the Flow blockchain and building apps on it. Accredited investors will receive a cut of the company stock with the option to convert stock to tokens. Warner Music contributed less than $1m to the final total amount.

Bronikowski sees blockchain technology as a way to create a new revenue stream for artists and record labels. He said,

“When I was in college, you’d walk into someone’s room and you’d see 200 CDs and you would say, ‘That guy’s a big music fan.’ And now you just see somebody with a music subscription service and some playlists. We think that as people spend more time crafting their persona in the digital realm, digital goods and collectibles are a great way to express that fandom.”

Aside from researching the blockchain and non-fungible tokens, Warner Music is also said to be looking into using cryptocurrency to let fans tip artists. The company believes that the integration of blockchain technology could revolutionize the music industry by enabling direct payments to artists. It could also allow artists to connect directly with their fans, bypassing intermediaries such as record labels and streaming services.

In summary, Warner Music’s investment in Dapper Labs and its use of blockchain technology is a significant milestone for the music industry. The move could potentially create a new revenue stream for artists and record labels, while also providing fans with a new way to express their fandom and support their favorite artists. The integration of blockchain technology could also transform the way the music industry operates, enabling artists to connect directly with their fans and receive direct payments. Warner Music’s move into blockchain technology may be the first of many as the music industry continues to explore the potential benefits of this technology.