The democratization of record-label advances
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View this email in your browser (|ARCHIVE|) http://hotpodnews.com/presents.... The fine print of innovation in the music business. This is issue #82, published on March 25, 2020. Hope you’re all staying healthy, safe and sane this Wednesday. I, for one, am quickly losing track of what day of week it is, and also completely forgot that it’s now springtime in New York.
Today’s main stories are both related to music and tech, but pegged to the unprecedented climate we’re in: 1) How music distributors are opening up recording advances to more independent artists, and 2) How the normalization of remote work could transform the music business for good.
A handful of notes before diving in: * I’ve been pleasantly surprised by the enthusiastic response to my Virtual Music Events Directory (https://docs.google.com/document/d/11wWL_7I4BG76t0V2kw1a4yIeWxUSfGwMQFYdUWAgSnA/edit#heading=h.6p7nn4acptfw) ! A heartfelt thank you to everyone who’s shared the document around, given feedback and/or donated so far. I’m doing a pretty big update of the doc in the coming days, so please feel free to reach out if you have any ideas for tools, events or categories to add (if you reached out already, I should be responding to you shortly). Also, the intro section of the directory got translated into Japanese (https://mag.digle.tokyo/column/71421?articleview=true) ! 🙌 * I did an interview for Todd Burns’ newsletter Music Journalism Insider (https://musicjournalism.substack.com/p/cherie-hu-interview) , which is IMO the best resource out there for anyone interested in the business and culture of music writing. If you want to learn a bit more about how the heck I got here professionally and what I’d like to see more of in the music journalism world, this is the read for you. The interview will remain free for the next week, after which it’ll go behind MJI’s paywall. * I was also interviewed for recent pieces in The Guardian (https://www.theguardian.com/music/2020/mar/19/instagram-how-we-feeling-can-livestreaming-replace-cancelled-gigs) and VICE (https://www.vice.com/en_us/article/939va5/pop-song-royalties-could-be-a-more-reliable-investment-than-stocks) about livestreaming and music-royalty investing, respectively. * I have a lot of new freelance pieces out — on NPR, Pitchfork and DJ Mag — all related either to livestreaming or general resources for artists and music-industry professionals amidst the COVID-19 outbreak. You can scroll down to the third section of this email for links to these articles. * Please play Animal Crossing with me.
- Cherie ❤️ The democratization of record-label advances
Over the past few decades, streaming, social media and other technologies have transformed the recorded-music industry by democratizing artists’ access to fans from around the world. But while marketing innovation continues to thrive, there’s another area of recorded music that tech has been much slower to democratize: The advance.
If you’re an artist who wants to get funding for your next album, where do you go? Historically, the only realistic answer was to sign to a record label, who would give the artist an upfront advance on future royalties in exchange for majority ownership over their master recordings. As has been widely covered (https://djbooth.net/features/2020-03-24-kelvyn-colt-left-sony-music-with-catalog-guest-editorial) , many of those deals end up being heavily stacked against the artist, especially at the major-label level.
There are some funding alternatives emerging — such as regular crowdfunding sites like Kickstarter (https://www.kickstarter.com/) , and equity crowdfunding (https://mailchi.mp/cheriehu/alternative-financing-independent-artists-recorded-music) platforms like Corite (https://corite.com/) and Bumper Collective (https://www.bumpercollective.com/) that allow fans to buy “shares” in an artist’s future work. But these solutions are not for everyone, and don’t quite solve the deeper, systemic issue at hand: Traditional labels still have a stranglehold over the market for recording advances, such that industry capital is locked inside unfavorable deals that are only accessible to artists who have achieved a certain level of commercial success.
A growing number of independent music distributors are looking to change this by opening up advance capital to tens of thousands of indie and unsigned artists, without taking away their rights.
The past three years have seen a surge of over a dozen distributors (https://airtable.com/tbl9IeIWGCAUjoH4E/viw2Sh68wq0MFEavP?blocks=hide) launching their own cash-advance programs, in which any qualifying artist (often a customer of said distributor) can apply for and get an advance on their future royalties within a few days.
One of the most prolific such programs is TuneCore’s Direct Advance (https://www.tunecore.com/direct-advance) . Launched in 2017 in partnership with Lyric Financial (https://www.lyricfinancial.com/) , the program has issued 12,000 advances to artists across 32 countries so far, totaling around $20 million in value. Lyric Financial tells me TuneCore is on target to surpass 20,000 total advances by the end of this year. Other distributors with similar programs include Stem, Amuse, Symphonic Distribution and CD Baby.
We need this kind of financial innovation now more than ever, but we should also be scrutinizing these more open distributor advances just as much as we might critique a traditional label deal. Because these kinds of offers are so new, there’s little to no regulation or standardization — and the distributors, of course, are coming to the table with their own financial incentives. Click here to continue reading. (https://www.patreon.com/posts/35258514) How the normalization of remote work could transform the music business
Needless to say, the COVID-19 outbreak has upended nearly all areas of the music business. One such transformation remains as yet under-discussed, but I think could have significant longer-term effects on the way the music industry operates: The normalization of remote work.
Depending on whom you ask, music is either one of the most or least tolerant industries to remote and distributed work. On the one hand, the sprawling ecosystem of online collaboration tools — like Splice (https://splice.com/) , SoundBetter (https://soundbetter.com/) , BeatStars (https://www.beatstars.com/) , Soundtrap (https://www.soundtrap.com/) and SoundStorming (https://soundstorming.com/) on the artist side, and like Slack, Zoom and Airtable on the behind-the-scenes organizational side — hypothetically breaks down geographic barriers to productivity, enabling any music project to germinate and flourish completely in the cloud.
On the other hand, one surefire sign that the music industry is still not remote-friendly is that career opportunities remain highly concentrated in major “music cities” (e.g. New York, Los Angeles, Nashville and Atlanta in the U.S.), even though talent is not. In addition, music-industry culture relies heavily on non-disclosure agreements (NDAs) — in part for the purpose of protecting intellectual property — and many people’s day-to-day work at major music companies involves sensitive data that ideally doesn’t leave an office setting (this is also true in the financial and insurance sectors (https://www.fastcompany.com/90480501/the-incredibly-simple-reason-working-from-home-could-be-here-to-stay?utm_campaign=eem524%3A524%3As00%3A20200323_fc&utm_medium=Compass&utm_source=newsletter) ).
Nowadays, though, music companies of all sizes have no choice but to embrace a remote way of life. Around March 10, streaming services like Spotify (https://twitter.com/eldsjal/status/1237487784996343813) and SoundCloud were some of the first major music companies to order their staff to start working remotely; major labels and publishers soon followed suit (https://www.billboard.com/amp/articles/business/record-labels/9334120/major-labels-close-offices-coronavirus-employees-work-from-home) .
Importantly, several music companies around the world already have already had remote-friendly work policies built in from the beginning, including larger distributors and aggregators like Bandcamp (https://bandcamp.com/jobs) and DistroKid (https://distrokid.com/) as well as dozens of boutique artist-management, digital-marketing and PR firms. (As a freelance/independent music-industry writer, I’ve also been working “remotely” for my whole professional life.)
How could a remote-work paradigm help uplift certain sectors of the music industry, while also challenging deep-held norms around how the business works as a whole — largely for the better? Click here to continue reading. (https://www.patreon.com/posts/35224462) More resources on livestreaming and emergency funding for the music industry Aside from my Virtual Music Events Directory (https://docs.google.com/document/d/11wWL_7I4BG76t0V2kw1a4yIeWxUSfGwMQFYdUWAgSnA/edit#heading=h.6p7nn4acptfw) , I was glad to be able to write for several publications in the last week and help spread the word about resources for artists and music-industry professionals to cope financially and continue engaging with their audiences online, including but not limited to livestreaming.
For NPR, I wrote two pieces that will be updated on a regular basis: How fans can best support artists and behind-the-scenes music-industry workers (https://www.npr.org/2020/03/20/818539328/how-fans-can-support-artists-and-music-industry-workers-during-the-outbreak) , and how affected small businesses in the music industry can both cope with financial stress and contribute to systemic improvement (https://www.npr.org/2020/03/20/818539329/resources-for-music-businesses-and-industry-workers-in-need-amidst-the-pandemic) . With the piece on fan support in particular, I wanted to reiterate that while there are many ways to contribute to artists financially right now, not all of them land equally as fast into artists’ hands.
For Pitchfork, I wrote about the short- and long-term impact of livestreaming on the way artists connect with fans (https://pitchfork.com/thepitch/music-livestreaming-coronavirus/) . I covered topics including the scalability problem of brick-and-mortar live concerts, the intimate, self-directed culture of “staying in” versus “going out” for shows and the business-model challenges that remain in the current livestreaming landscape (i.e. artists and organizations can’t rely on Venmo donations forever).
For DJ Mag, I wrote about the growing number of electronic artists who are building loyal followings on Twitch (https://djmag.com/longreads/how-dance-producers-are-using-video-game-livestream-platform-twitch-connect-fans) , including but not limited to HANA, JVNA and Dan Le Sac. I filed this piece in early March (for DJ Mag’s April print issue) before all the event cancellations poured in, so there’s no mention of COVID-19; I hope it still offers a helpful look nonetheless into how artists have already been using Twitch in their careers, and why the best marketing strategies on the platform work quite differently from what artists might be used to. (You should also read Dani Deahl’s piece in The Verge (https://www.theverge.com/2020/3/19/21185220/tours-canceled-musicians-marc-rebillet-twitch-livestreaming-coronavirus) about electronic artists turning to Twitch in direct response to COVID-19.) Good reads
K-Pop’s Merch Madness (Billboard) (https://www.billboard.com/deep-dive/k-pops-merch-madness) This is an amazing collection of deep-dive articles into the business, marketing and culture of K-pop merchandise — written by a mix of Billboard staff writers and freelance contributors, and highlighting the perspectives of everyone from the CEO of SM Entertainment to a fan who spent more than $10,000 on merch from a single K-pop act.
The Scene Isn’t Worth Saving (First Floor) (https://firstfloor.substack.com/p/first-floor-30-the-scene-isnt-worth) I think the COVID-19 outbreak will permanently transform certain parts of business and society after it winds down, or at least wake up the world to what exactly needs to be changed on a systemic level, such that we can’t simply “go back to normal” after this is all over. Shawn Reynaldo gives a compelling overview of systemic challenges that remain specifically in the electronic music scene, from the sustainability of local music communities to the income imbalance between DJs and producers, and why “saving the scene” in its current form might not be enough.
How Cameo Turned D-List Celebs Into a Monetization Machine (Marker) (https://marker.medium.com/how-cameo-turned-d-list-celebs-into-a-monetization-machine-d0774e6a480f) This longform feature about Cameo (https://www.cameo.com/) — a platform that allows fans to buy personalized video shout-outs from celebrities — is also a super interesting case study in how content startups can use the concept of “fame” as an audience development strategy in a way that actually works for them, instead of fizzling out fast. What I’m listening to * Yaeji — “WAKING UP DOWN” (https://open.spotify.com/album/5zzlBUeiaoGOUsT2feGDdB?si=H7DDWGVaSmO4a2FdA3L8ww) * Tom Misch & Yussef Dayes — “Lift Off (https://open.spotify.com/track/7DFKZeHytl80710avStSCH?si=giR3qjhKQ0iJ1Ki071-XJw) ” and “Kyiv (https://open.spotify.com/track/4eaPeaQePXlQMcrV7s7BcK?si=V4qwmsEOTzK0kXE1EZ9Rgw) ” * Sampa the Great — The Return (https://open.spotify.com/album/1HxsSJHTqeUxDoKN26h8pB?si=VPWRY8gLQUCMlotJD2tKzA) * Thundercat — “Dragonball Durag (https://open.spotify.com/track/5WccXMtetBQijQWgrDUjmE?si=SjM5lgebTE6NQJyTsJVW2g) ” and “Black Qualls (https://open.spotify.com/track/2pZUGhmWxdrjRDhYC99qkq?si=g5fHnjNaSBCeIhf_WBYYnQ) ” * This (https://www.youtube.com/watch?v=MeJoAV0D8vY)
If you’d like to support even more thoughts and conversations on music and tech, I encourage you to become a paying member of the Water & Music ecosystem on Patreon (http://patreon.com/cheriehu?utm_campaign=Water%20%26%20Music&utm_medium=email&utm_source=Revue%20newsletter) .
For as little as $3/month or as much as $200+/month, you can access a wide range of perks including: * A closed, members-only Discord server, consisting of regular updates and analysis on the most important music and tech news * Exclusive essays and article previews * Updates on my book research * Monthly video hangouts with me
…and much more! Thanks so much for reading! ❤️
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