How Revenue Splits Work on D2C Sales
This page provides an overview of how revenue flows from a payer to payees as well as how fees are shared with your distribution business automatically.
Last updated
This page provides an overview of how revenue flows from a payer to payees as well as how fees are shared with your distribution business automatically.
Last updated
SHARE Protocol uses smart contracts to manage access rights and revenue flow associated with IP such as music and videos. The fundamental building blocks of the protocol are Pay-For-Access (PFA) Smart Contracts, Splits Smart Contracts, and Collections Smart Contracts. PFA smart contracts enable anyone to set their own prices and access terms for IP. Splits contracts distribute revenues on blockchain to payees. Splits contracts can distribute earnings from IP on blockchain, or off of the blockchain, e.g. from DSPs. Collections smart contracts can group PFA contracts into playlists and albums.
The diagram below shows how funds flow from a payer, through the protocol, to your distribution business and a track encapsulated as a PFA smart contract.
On the blockchain a consumer makes a purchase for a product that costs $1.00. Their total price with fees is $1.05. SHARE and the distributor (your business) split this fee 50/50, and $0.025 goes to your business digital wallet. $1.00 flows to the track. The track passes the $1.00 on to any split contract that is connected to it. The split contract then distributes the funds to payees in proportion to their share of the revenues, e.g. 50% to payee 1 and 50% to payee 2. In SHARE protocol, splits are processed over time, meaning that on the first payment, payee 1 will receive $1.00 and on the second payment payee 2 will receive $1.00, and so on and so forth.
Every transaction on the blockchain is transparent and visible using a blockchain scanner. Every blockchain has its own scanner. For example, transactions on the Polygon blockchain show all transactions on Polygonscan. Here's an example of a typical blockchain payment transaction on SHARE Protocol that includes a payer, a track, a distributor and a split, which matches the flow as described above.
