Shared Ownership and Large-Scale Fractionalized Payouts

Learn how to offer fractionalized streaming royalties to customers of your distribution business. Fractionalizing royalties is an innovative way to incentivize fan participation and engagement.

This tutorial is intended for music distribution businesses. It uses the SHARE App and SHARE SDK to integrate realtime fractionalized royalty payments into your existing distribution stack.

Why SHARE?

Fractionalizing ownership is a proven way to increase engagement and fun within communities. It's been used in industries like horse racing for decades, and the idea has been discussed at length within the music industry with the advent of the sharing economy.

SHARE provides a flexible solution by fractionalizing revenues at the payments layer, rather than fractionalizing the IP ownership at the copyright layer. This means people can participate in the fun of revenue sharing and tradable splits, without the legal complexities around copyright ownership.

Benefits

Faster Royalties (same day) via from DSPs that you support, such as Spotify, Apple Music, Deezer, Pandora, Amazon, and YouTube Art Tracks, instead of waiting months to receive payment from streaming activities.

Community Splits: Customers can split a percentage of royalty revenues with up to 10,000 fans or collaborators, incentivizing massive network effects and a feeling of shared investment in their releases.

Technical Integration Options

There are two technical integration paths to choose from depending on your needs:

1. No-Code: Customers can add [e-mail] to their royalty splits and FORMLESS will make the requisite backend API calls to distribute earnings using SHARE smart contracts. In this setup, FORMLESS serves analogous to a label, where payouts are settled on blockchain. This options requires no engineering work within your system if you meet our standard requirements.

2. API: Customers can add smart contracts as royalty recipients directly in your system, and you can execute payouts from within your service. This option is the most flexible but requires more work to setup.

No-Code Integration Option	API Integration Option
Up to 50% of royalties delivered in realtime. Prepayment not required, but available to select pre-vetted customers only.	Customize royalty delivery rates with full control of payments within your service. Prepayment required for payments API credits.
Full community splits and smart contract creation capabilities.	Full community splits and smart contract creation capabilities.
No engineering required if standard requirements are met.	Significant engineering work required. Our team consults to ensure delivery on schedule.

Integrate Using No-Code

1. First, please review the setup requirements in Connect DSP Earnings to SHARE with No-Code.

2. Next, please see the reference guides (Get Your Streaming Money Paid Out Same Day and Share Streaming Money with Fans) as examples on how your customers will enable the feature. Upon completion your integration will receive a reference guide customized for your UI.

Integrate Using API

Integration via API involves three parts:

1. Determining whether a user logged into your system has a FORMLESS account. This can be achieved using the How to Verify FORMLESS Account IDs guide.

2. If a logged in user does have a FORMLESS account, enabling your customers to enter a smart contract ID string value as a royalty payment recipient and validating the ID. Validation can be done using the Add SHARE Protocol Split Contract as a Payee guide. You can think of a smart contract ID analogous to an email address entered for a payee. It's simply a string which identifies the payee and must be stored in your database. In this case, a single payee ID can correspond to thousands of downstream recipients.

3. Delivering a payment to the recipient contract ID at payout time. This can be achieved using the Execute a Programmatic Payment guide. In this step you'll be able to specify payable activity details and our API will deliver the payment to the recipient contract on blockchain. The contract will subsequently route payment to all requisite payees downstream. Programmatic payouts require prepayment, and due to streaming fraud, requires consideration around when to deliver payments and what rate of payments can be delivered in realtime.

Technical requirements for API integration vary across distribution businesses. Please inform your representative if this option is best for you and we'll work with you on concrete implementation steps.