Utopia Music acquires Lyric Financial
Utopia Music’s strengths pair well with Lyric Financial’s data analysis to determine how much funding it can provide an artist. Its core product is an online platform for creators, rights holders, and collecting societies that tracks global usage data and maximizes catalog revenue. Its slogan is “a fair wage for every room”. A separate service for investors helps them assess and assess the risks when acquiring a registration or publication catalog. In September, Utopia acquired artificial intelligence startup Musimap to improve recordings metadata – information about performers, songwriters, and rights holders that requires precision in order for parts to be paid properly.
Investors and the companies they support are increasingly funding artists who turn to Chance the Rapper, which has landed three albums in the Billboard 200 chart without the backing of a major record label, as a plan for success. while retaining their intellectual property. In some cases, well-known artists have used their independence from the traditional majors business model as a sort of bragging rights: 2 Chainz, 21 Savage, Iggy Azalea, Yo Gotti, Torey Lanez and Rich the Kid also boasted. to have their masters on Instagram or in interviews.
Their attitudes help explain Shamrock Capital’s recent entry into independent music. Best known for purchasing Taylor Swift’s Big Machine Era Catalog on Braun scooterSB Projects, the company announced in July that it had raised nearly $ 200 million for its first Debt Opportunities Fund to provide loans to creators of music, film, television, games and games. sports. The fund will be managed by Shamrock partners and other investment professionals in Los Angeles, including pension funds, foundations and financial institutions.
The practice of advancing money against future royalties is ingrained in the music industry. For many labels, receiving advances was an important part of album release and artist development. The practice has spread into the streaming age, as Sony’s The Orchard, Universal Music Group’s Ingrooves, and a host of independent distributors vying for labels to increase their market share. “It was really the duty of the majors to give serious advances in general to their clients or artists, and this really had an impact on the independent industry,” explains a distribution manager.
Independent music distributors have attracted hundreds of millions of dollars in recent years. As recently as last week, UnitedMasters raised $ 50 million for a valuation of $ 550 million in a Series C round led by Andreessen Horowitz, which followed a $ 50 million Series B round in March led by Apple which also included Andreessen Horowitz and Alphabet. Downtown Holdings acquired FUGA in January 2020 and CD Baby in March 2019. Believe, a Paris-based company that provides a variety of services to independent artists and labels, raised $ 365 million in an IPO and currently has a market capitalization of 1.73 billion euros ($ 2 billion).
Advances from companies such as Lyric Financial and Sound Royalties, and alternative funding from companies such as Indify and SongVest, are required to provide the capital required for self-funded registrations. In the past, a manager could finance the release of an album, or the artist paid or found an investor. Autonomy aside, artists simply need funding to produce music themselves. A longtime industry professional says a $ 100,000 advance would be enough to work on an album, but can go quickly. “A good publicist costs between $ 3,000 and $ 5,000 per month,” they said. “It’s not uncommon to spend $ 10,000 on online advertising. And hiring an artist services consultant can cost anywhere from $ 3,000 to $ 5,000 per month.
“There are a lot of moving parts” in running a record label for an artist, adds industry veteran Fred Croshal, whose clients include Jackson Browne and Bonnie Raitt. “With the amount of music uploaded to platforms and streamed daily or weekly, you can understand that competitiveness means you need to have financial resources to build competitive assets. If an artist’s track takes off on streaming services, it may need marketing and promotion resources faster than royalties can pass from streaming companies to artists’ pockets, Lyric Financial CEO said . Eli ball. “It’s not like you put out a record every 18 months and follow it on tour. Now, to keep your fans, you need to constantly engage with them.
Today’s music industry is well suited to cash advances: lenders, whether it’s a finance provider or a digital distributor, can look at the predictable and recurring streaming royalties of ‘an artist and model an appropriate amount of support. The loans would be radically different if the artists’ only royalties were from CD sales, which arrive in batches and are curtailed by merchandise returned from stores, as well as infrequent sync licenses from TV show placements, movies, advertisements and other visual media. But streaming royalties reduce the guesswork a lender faces about the amounts and timing of payments from various streaming services.