Complementing Labels and Publishers
I was talking to the CEO of a major publisher and said, “We don’t want to handle publishing. All we’re doing is providing non-credit-based advances. We don’t want to do the work you’re doing. We’re not taking your percentage.” Same with the labels; we’re not taking the work that the labels are doing. Some of these folks will redirect their clients to us and say, “If you want an advance, a company we work with will give you that and we can still do all your marketing.”
There was a survey done a few years ago of 5,000 songwriters and it revealed that 70% of them had no idea there were advances available to them without having to give up their copyrights. That’s our challenge – getting the market aware of what we do, how we do it and that it’s available. The most successful way we’ve gotten the word out has been our referral program. We pay up to $25,000 per referral.
Money’s Still There
Who is being paid and how is transitioning, but there’s still an enormous amount of money flowing. We can look at that as it changes, follow trends and help people the best we can. It’s a moving target, but there’s still an enormous amount of revenue we can collateralize against. And we’re not trying to project out for the next 35 years, so we’re working with a much shorter window.
Honesty and Incentives
We’re non-credit based, so [clients] can be more forthright about their situation. We’re also not trying to buy copyrights in perpetuity, so don’t look at what we can raise as the end all, because there’s still overflow income.
In a traditional model where it’s 100% recoupment, if you write a song, your income’s $10 and then you’re in that Super Bowl commercial, that’s just going to recoup your advance further. In our model, that money flows through to you. So we incentivize the songwriter, artist or producer to keep working. They’re not incentivized to walk away and start something new under a separate name.
Banks and Selling
There are several banks I give clients the choice to work with. That’s a great option if you qualify for it. We also get people saying, “I appreciate what you’re doing, but I really want to sell this.” I’ll point them in the direction of people who buy in perpetuity. I feel strongly about why it’s important not to sell in perpetuity, but sometimes that makes sense.
There are lots of new royalty streams. Just look at YouTube; whether it’s the composer, the creator of the video or the person featured in the video, there are many different streams. And financing models will evolve to view and predict those streams better. The newer they are, the harder they are to predict and the higher risk they’re perceived. And the higher the risk, the higher the cost of funds. There are a lot of new streams we don’t fully understand and have to be conservative with.
Our Sound Check program is quick, easy access to money. Let’s say someone’s looking for $25,000 and wants to repay it back over the next year. We’ll do it for $695 and a 4% advance rate. We’re launching that right now.
Hang On To What You’ve Got
Don’t sell your copyrights. There are options available to help you accomplish, whether it’s to fund that next project, fix that broken van or whatever it may be, personal or professional. There is access to funds for most folks.