Digital distributor Vydia has chosen Royalty Exchange’s online marketplace to fund advances for independent labels and artists using its platform.
Vydia says that under the partnership, labels and artists using its platform to distribute their music can request an advance on their future royalties, which Royalty Exchange’s community of investors will fulfill.
Vydia adds that “Artists have complete control over how much of an advance they can request, exactly how much they’ll repay in return, and unlike traditional advances, retain full rights to their music”.
The way it works is that Vydia clients determine the minimum advance they’ll accept, and maximum amount they’ll repay in return.
Royalty Exchange posts the request on its marketplace, where investors can review the earnings history of the catalog, and then bid for the chance to fund the advance in return for collecting a known, fixed-amount.
Bidding is in an auction format, so the more bids received, the greater the advance the artist receives, but the investor funding the advance will only collect the amount listed upfront.
The better the catalog performs, the faster the advance is paid off and once the repayment is complete, the artist resumes collecting royalties.
If the catalog struggles, however, Vydia says that artists are not required to pay a fixed monthly sum they don’t have.
As a first test of this program, Vydia cites an example of an artist requesting a $400,000 advance in return for a $571,000 repayment. The auction bid the advance up to $444,000.
“This partnership allows us to offer independent labels and artists an alternative to signing a major label deal once they experience success with a viral hit.”
Roy LaManna, Vydia
Roy LaManna, CEO of Vydia, said: “This partnership allows us to offer independent labels and artists an alternative to signing a major label deal once they experience success with a viral hit.
“These artists have already proven they know how to break a song, so this money puts the power in their hands to take their career to the next level.”
“We’re honored to provide this service to a forward-thinking distributor like Vydia.”
Anthony Martini, Royalty Exchange
Royalty Exchange partner Anthony Martini, added: “We’re honored to provide this service to a forward-thinking distributor like Vydia.
“This allows Vydia to provide its artists and labels a valuable financial service without going out of pocket or drawing on a line of credit.
“What’s more, the size of the advance that Royalty Exchange investors can provide is far higher than what artists can typically expect from other digital distributor loans.”Music Business Worldwide