Matt Pincus-backed HIFI launches to help artists ‘actually see what they’re earning – and what they’re worth’

A new business and financial management platform, HIFI, has launched in the US with some major league supporters.

HIFI CEO and founder, Damian Manning, says the company, which dubs itself a “financial rights organization”  is “building innovative products and services that work in concert with them to financially empower the creator class”.

Those products include Royalties Dashboard, available to use now, which is financial platform that aggregates data from labels, distribution services, PROs, music publishers and others.

Said Manning: “Our Royalties Dashboard is the first tangible expression of HIFI’s mission. It allows rights holders to see what they’re earning across all of their royalty accounts, helping them make better business decisions. HIFI regularly hosts workshops and events to gather feedback and engage our community. A unified dashboard was a frequent request. And it will serve as a springboard for a suite of products that we’re building for our members.”

A second product from HIFI, Cash Flow, is currently being used by its charter members. Cash Flow pays artists twice a month “like a salary”, with HIFI making small advances to keep artists getting paid where required.

The firm says that Cash Flow “insulates artists from the ups and downs of most royalty payments, helping them pay their bills, get an apartment, get credit and take advantage of options generally unavailable to non-traditional earners”.

“HIFI offers much needed transparency and access to royalties data across a multitude of revenue streams.”

Max Gredinger, Foundations Music (managers of Lauv and other artists)

Those backing HIFI include Matt Pincus, who recently joined HIFI’s board and is an investor via his new financial vehicle MUSIC – a joint venture with LionTree.

Pincus was formerly the Founder and CEO of SONGS Music Publishing which was acquired for a nine-figure sum in 2017 by a fund managed by Kobalt Capital.

In addition to MUSIC, backers of HIFI include venture capital firms Lerer Hippeau and Flybridge Capital.

Advisors helping guide HIFI’s launch include Platoon’s Denzyl Feigelson, Splice’s Steve Martocci, and Will Page, formerly Chief Economist at both Spotify and PRS for Music.

HIFI’s Royalties Dashboard is available to use at no cost to artists. The company charges a small administrative fee for its Cash Flow product, paid via a percentage of an artist’s earnings.

The platform is available to US residents now, with plans to launch in the UK and across Europe in the future.

Max Gredinger of Foundations Music, the management company of Lauv and Young The Giant, amongst others, has been testing out HIFI.

He said:  “There’s never been a more important time for HIFI. They offer much needed transparency and access to royalties data across a multitude of revenue streams, and their financial services are thoughtfully designed to help effectively manage an artist’s career.”

And Justin Kobay, Partner at LL Business Management, commented: “My partners and I are thrilled to see HIFI helping artists better understand their finances. The transparency and innovation they bring to the table is ushering in the future of the music business.”

HIFI founder and CEO Damian Manning (pictured inset) is a serial founder and startup investor in music tech.

Prior to launching HIFI, Manning was co-founder, CEO and principal architect of Echospin, which enabled rights holders to sell digital, physical and mobile goods direct to fans. After it was acquired in 2010, Echospin powered campaigns for a number of music stars, generating millions in revenue.

Earlier in his career, Manning served as Managing Director for Digital Strategy Partners and VP, Digital Media for MTV Networks.

He is also a founding venture partner at early-stage capital firm DEV, and a mentor at ERA and Golden Gate Ventures.

In the following Q&A, MBW catches up with Manning to get a fuller picture of what HIFI does, and what it hopes to achieve for artists in the future…

Why do you think there is a market opportunity for HIFI right now?

In the global sense, there’s a need for artists to better understand the business of being in music. For too long, there’s been a profound asymmetry in the information and knowledge required for artists to make better deals for themselves – whether that’s signing with a record label, a publisher, or a manager, or releasing and promoting their music.

Recent events with the pandemic, and touring industry revenues disappearing overnight, have highlighted the fact that artists have become overly dependent on ticket sales, and other near-term sources of revenue. They haven’t paid close enough attention to the more consistent and predictable royalty streams from their music. Many artists aren’t even quite sure how that part of their business works.

“For too long, there’s been a profound asymmetry in the information and knowledge required for artists to make better deals for themselves.”

HIFI helps shine a light to educate artists and provide a source of financial literacy around how you earn money as an artist and what you should be paying attention to. But we also build technologies that do a lot of that work on your behalf. It starts with the Royalties Dashboard that we make available to all HIFI members; whether you’re a songwriter, producer, recording artist, or a manager, you can link in all of your royalty sources, from your distributors, your record label, your PROs, your publisher, and track all your earnings data in a single place.

For the first time, our artists can actually see what they’re earning and what they’re worth on the royalty side of the market. In the present climate and the present economy, it’s more important than ever for artists to get a handle on what income is in the pipeline, who’s paying them and when that money is going to arrive.

Is it fair to say that this is geared particularly towards independent artists or empowering artists to remain independent for as long as possible?

HIFI is open to everyone in the music industry. Whether you’re an artist or a part of an artist’s team, a record label or a music service, we invite you to join the HIFI community. In our pilot program over the past year, we’ve welcomed members across the spectrum and at various stages of their careers.

Certainly, among them we have artists earning a few thousand dollars a year as DIY independents, and you see a new generation of this type of artist breaking through each day; they’ve discovered their musical talent, they make and distribute music with tools that are essentially free or near free, they get playlisted, and there’s great social media engagement.

“Even in the world of superstar artists, their teams need access to software and technologies that automate the processes that are difficult to manage.”

At the same time, they don’t know they’re a songwriter, they don’t have a publisher, they don’t have a PRO in the States, they don’t register for SoundExchange for their U.S. performance royalties. There’s just a lack of information in that part of the market, and we provide a lot of value by connecting those dots, educating those artists about what options are available and how to maximize their opportunities.

We also have members with major label deals that have linked their accounts from the major record label royalty portals and elsewhere. Even in the world of superstar artists, their teams need access to software and technologies that automate the processes that are difficult to manage. HIFI adds value to their business management teams, because they currently do a lot of that work by hand. And it’s grueling work and not very cost effective. We can provide the technology interface with real time access to the earnings data. We help them better service their clients.

What would you say to an artist or a manager who is signed to label or Distributor X and says, ‘I already have a royalty portal’?

The big advantage of our Royalties Dashboard is that it sits across all of your accounts at every royalty paying organization.

What we’re seeing is that our artists aren’t just managing one source of royalties, they’re managing several; they don’t stick to one distribution service, they use three or four. And the album release cycle on the recorded music side has been condensed from every couple of years or 18 months to every few months or even more frequently, in the streaming world.

So the need for artists to be able to wrap their arms around all those dashboards at once and pull that data into a single place is more urgent than ever. That single, comprehensive source then becomes the springboard for so much more.

Talk me through how Cash Flow works. Is that you providing capital into the marketplace? Or is that you just managing the flow of an artist’s funds?

It’s a combination of the two. Cash Flow came about because we recognize that artists need access to working capital. I think the whole market recognizes that a huge challenge artists face is access to direct capital, especially in a world where labels and publishers have almost bottomless access to capital themselves.

In talking to artists and the market, we started hearing that the advance construct didn’t serve them really well. Artists took advances because it was the only thing being offered. But artists, generally speaking, have challenges managing their financials. Handing an artist all this money in one go, in a lump sum, sets them up for failure in many ways.

“Handing an artist all this money in one go, in a lump sum, sets them up for failure in many ways.”

So we looked at that problem and came at it from a different angle. When we started asking artists and creatives if they’d be better served by receiving a consistent payment, as opposed to one payment upfront, universally, artists told us that the consistency and the salary-like cadence of Cash Flow would provide a host of benefits to them personally, not only for their personal budgeting and spending, but also the way that they put their money into making music and promoting themselves.

We came up with an underwriting technology and a product that’s able to do exactly that. We streamline their royalty payments and smooth them out, but we also guarantee them a minimum payment that arrives every couple weeks no matter what. So in periods where there’s no royalty income flowing through, HIFI, as the royalties admin, can advance the money needed to make up the difference. And as additional royalties come in, we recoup against those small advances and everything remaining flows through to each artist like bonus money.

For our members it has very little downside, because they have a guaranteed income they can count on and plan around and budget around over the course of the year. And they’re going to continue to earn the rest of their income, even if we don’t guarantee it, as it catches up. And the guaranteed minimum can only increase over the course of the year, not decrease.

Do you see yourselves as part of a narrative that is a threat to traditional publishing companies and record labels? Royalty management, royalty administration is a service that they say is all part of their offering.

We see HIFI as complementary to that part of the system.

We already work with artists who are signed to major record labels and major publishers, and they see great value in what we offer, in addition to what those partners offer them. The thing about the major publishers, major record labels, is they may provide top notch services, but they can’t do everything for their artists – there are channel conflicts, there are walled gardens they have to navigate. We sit alongside those deals and pull in the other pieces that the major publishers and record labels can’t handle.

For example, more and more artists these days are signing deals with major publishers and record labels that don’t include catalog. There are seasoned artists resigning or reupping with major labels and acquiring or reacquiring their previous masters as part of the deal. In those scenarios, those artists might put their reacquired catalog up through another distribution service. HIFI helps them and their teams manage that newly independent part of their business.

What is your overarching ambition or objective with HIFI?

When you look at the way creators get paid, and all the confusion and challenges around accounting for royalty streams and everything else in the market, we recognized that something had to be done about it. Education, advocacy, the Royalties Dashboard and Cash Flow, it’s just the starting point for HIFI. If we can push the envelope for the industry to do better, and offer better deals with transparency, and pay artists more frequently, that means we’ve accomplished our goal.

Do you have any appetite whatsoever to become a distributor yourselves?

No. I can’t tell you how many times we’ve been asked: ‘Why don’t you just become a publisher? That’s where the money is at!’

We’re able to do what we do because of our independence.

The moment we encounter the same kind of channel conflicts that existing players in the market face, it inhibits our ability to provide the solutions that our members need from us.Music Business Worldwide

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