The following MBW blog comes from Matthew Smith (pictured), the CEO of Royalty Exchange – the online marketplace that enables investors to buy income streams tied to music copyrights. Originally founded in 2011 and privately held, Royalty Exchange is based in Denver, USA.
We’ve heard a lot about how COVID-19 is especially dangerous for “at risk” populations like the elderly and those with compromised immune systems. The subsequent economic fallout for the music industry with stalled tours and delayed frontline releases reveals our own “at risk” population—artists.
We don’t know how long this crisis will last, but it’s already clear that this will be a difficult period for everyone. The pain won’t be evenly dispersed, however. And the music industry needs to come together to provide relief for songwriters, performing artists, and producers who are the lifeblood of our industry.
Right now artists are facing a sudden shock to their income. Of course, it’s not just artists. Unemployment is skyrocketing, businesses are closing. People are in trouble.
But, in the music industry, artists are particularly exposed. Artists are the OG of the gig economy. They’ve learned to live with uncertain income and no defined benefits. They exist outside the social safety net. And that safety net has never been needed more than it is today.
The relief extended to this group through the federal stimulus bill and the many admirable charitable funds set up in response to the crisis are all helpful and necessary. But many questions still remain about who exactly will be eligible, how much they can get, when their money will come, and what hoops they’ll need to jump through to get it.
Government stimulus and donations are only part of the solution. We—the music industry—must do what we can today. And, it turns out there is a lot we can do. It’s time for each of us to step up.
I’d like to propose two simple steps the entire music business (Royalty Exchange included) can take to make a real difference in the lives of the artists we serve:
The simplest and most beneficial thing the industry can do for artists is pay them the money they are owed much faster. When the gig economy collapses and times are tough creators need the money they’re owed now, not in 90 days.
We all say that artists are our priority. Well this is our chance to prove it.
I challenge everyone to cut in half the time it takes to pay artists. If it normally took 90 days to pay an artist, focus your resources on getting them paid in 45. If it took a month, make it two weeks. It won’t be easy, but it will help, and that’s what matters right now.
“The artists we serve need us. Dedicating resources to paying them faster is the least we can do.”
Labels, publishers, and PROs have all been working on ways to speed up their payments. Much of the tech and tracking exists to make it happen. Many just have been waiting for the right time to roll it out.
Now’s the time to put those plans into action. The artists we serve need us. Dedicating resources to paying them faster is the least we can do. Focus your efforts on getting checks out the door. Paying artists faster will be a big help.
At Royalty Exchange, we’ve committed to reducing the time we administer our royalty distributions… from 30 days to 15. I don’t know if we’ll succeed every time. But I know we’re going to make every effort to get there.
I challenge you to do the same.
90 Days of Artist Relief
This one is harder.
For the next 90 days, alter any revenue share with artists by 30% in the artist’s favor. If you were splitting revenue 50/50, make it 65/35.
If you’re a label or publisher or manager your instinct may be to reject this idea out of hand because, in the short term, it will hurt your bottom line. And, you may be thinking, we’re all hurting. Canceled tours and delayed releases cost everyone, not just artists.
This new revenue share can’t be permanent because it isn’t sustainable. We all run businesses and we all have employees other than artists we are responsible for.
“For 90 days Royalty Exchange will reduce our standard commission on sales from 15% to 10%, starting April 1.”
But we can survive 90 days of a smaller take. After a long drought, the music business has rebounded in the last five years. We’ve enjoyed a booming bounty of revenue thanks to streaming. Now’s the time to give some of that back to the artists who’ve made it all possible.
As a company, Royalty Exchange is just a blip on the radar of the music business, but we’ll do our part and eat our own cooking. For 90 days Royalty Exchange will reduce our standard commission on sales from 15% to 10%, starting April 1.
We’ve already seen such steps taken by companies like Bandcamp, Mixcloud, Songtradr, Soundcloud, and others. We hope that’s just the start, and that the larger, foundational music companies follow their lead and do the same.
In times of crisis and hardship, it’s essential to recognize the things you can control, and the things you can’t.
Let’s have the courage, the vision, and the will to step up and do what we can… today
#CovidChallengeMusic Business Worldwide