UnitedMasters will now offer artists an option to be paid in the cryptocurrency of their choosing.
Coinbase partnered with UnitedMasters to provide the offering, the two companies announced.
UnitedMasters has backing previously from Apple and Google parent Alphabet.
Coinbase and music distributor UnitedMasters have partnered to pay artists in cryptocurrency for their music, the companies said Tuesday.
Artists can choose to be paid in US dollars in full, partly in US dollars, or in the cryptocurrency of their choosing, through Coinbase’s payroll product, UnitedMasters said in its press release, adding that artists “can now take part in a more equitable, decentralized and transparent economic system.”
“We want to make it easy for every company to pay employees in crypto. This is the future of payroll,” said Coinbase Chief Product Officer Surojit Chatterjee.
UnitedMasters is one of the first in the music industry to offer the option, Bloomberg reported. The company, which helps independent artists get their music to fans, launched in 2017. Its founder, Steve Stoute, has since gotten backing for his company from Apple, Google parent Alphabet, and Andreessen Horowitz, Insider previously reported.
UnitedMasters currently partners with brands such as Apple, Bose, AT&T, the NBA, and the NFL, to help artists get noticed. The company has helped musicians such as rapper NLE Choppa, Lil Tecca, and others launch their careers, TechCrunch reported in 2020, noting that UnitedMusicians had more than 400,000 artists.
When you listen to your favorite musicians, accounting is probably the last thing on your mind.
Number-crunching may be the least sexy side of the music business, but for Stem CEO Milana Rabkin Lewis, it’s the key to an industry-wide revolution.
“One of the unfortunate things about the music business is that getting paid isn’t a given,” Lewis told Insider. “There’s this notion of the starving artists … that when you work in music, you’re not necessarily doing it for the money.”
After five years working at United Talent Agency, one of the best artist management companies in the country, Lewis realized the traditional agency model wasn’t working for the majority of rising artists.
“The major label system is really designed to drive superstardom,” she said. “Anyone can make a song … they’re not able to provide this sort of machine that makes superstars every single one of them, so a lot of artists are frustrated.”
On Spotify alone, nearly 60,000 songs are uploaded every day. That’s almost one song every second, the streaming platform reported in February.
While the number of superstars has increased, so has a growing pool of mid-sized artists – musicians who still rely on streaming and touring revenue as their main source of income. Without the backing of large labels, many artists are jumping through hoops for each paycheck.
“Getting people paid wasn’t as big of a problem when there were a bunch of major labels that controlled the whole entire business, and there were 40,000 songs released a year,” she added. “The volume was manageable for humans to be doing the accounting flow.”
Spotify, which has 155 million paying subscribers, generally pays between $.003 and $.005 per stream. Artists need about 326 streams to make $1.
According to Spotify, 13,400 rights holders are making over $50,000 a year – the median salary in the US – from Spotify streaming royalties. Artists who made more than $100,000 per year totaled 7,800, while 1,820 made more than $500,000 per year.
Converting an indie song played one morning in a coffee shop to cash in the pocket of the songwriter, singer, and producer is a lengthy and complicated process that entails different licenses, rate calculations, and publishing deals. For independent musicians, all this accounting is left up to them.
“Royalty accounting has been made to feel complex and burdensome,” Lewis said. “It scares most independent managers, artists and labels, to the point where they punt handling it so no one gets paid.”
Stem is trying to change that. Its automated distribution and payment software allows creators to get paid 3-9 months sooner and saves business managers roughly 15 hours of administrative work per month.
On Stem’s platform, producers, songwriters, vocalists, and promotional partners can split earnings according to personalized percentages and receive payouts on the 15th of each month.
Through “Scale,” a feature launched last year, artists and independent labels can also request advances in the form of a revolving credit line provided by the company’s financial arm.
“The economics are way more favorable to the artists,” Lewis told Insider. “They get to keep anywhere between 80 to 95% of the profits, whereas it’s kind of the reverse if they’re working with a major label deal.”
Last month, Stem launched “Recoup Rules,” an automated accounting option that enables managers to pay out expenses such as marketing or promotional costs before splitting the monthly revenue.
“I know it sounds unglamorous, but until now it’s been a serious pain point for all artists and especially independent ones,” a Stem spokesperson said.
Alex Goot, a singer-songwriter and multi-instrumentalist whose YouTube channel GootMusic has more than 800 million total views said Stem has helped him run his own business.
“I’m an artist who buys a ton of cover licenses, but all of those expenses come directly out of my pocket. With Recoup, I’m now no longer losing that initial capital,” he said.
Lewis told Insider that the value proposition of a major label isn’t what it used to be, causing many artists to operate independently.
“More and more artists are doing things on their own because they don’t need to give up a percentage of ownership to a major label anymore,” Lewis said.
New York City received more aid than any other city in the country from President Joe Biden’s American Rescue Plan. It plans to allocate those stimulus funds to a range of areas, including giving some lucky artists $5,000 and working to end homelessness.
Last week, NYC released a 70-page report detailing its plans to use the $5.9 billion in stimulus funds it received from Biden. Those plans include a program that provides $5,000 grants to 1,800 artists who suffered financially during the pandemic, a $65 million relief fund for taxi medallion owners, and $125 million to support homeless people in the city, among other things.
The report noted that these measures are “just the beginning,” and the city’s top priority remains getting every resident vaccinated for COVID-19, and the detailed plans only include those that are funded from Biden’s stimulus.
“It is not intended to serve as a comprehensive report on the City’s recovery efforts,” the report said. “The City’s decisions to invest these funds now will help keep New Yorkers safe, restart the economy, rebuild the tax base, increase equity, and enable greater economic growth in future years.”
Other plans included $1.5 billion to increase employment and support small businesses, and $52.5 million to bring NYC’s tourism back to pre-pandemic levels.
Insider reported in March that after Biden signed his stimulus plan into law, of the $350 billion in state and local aid, $22.5 billion of it was divided evenly between all states and the District of Columbia, and the remaining funds were allocated based on unemployment numbers. That meant that New York, along with California and Texas, were on top of the list for that aid.
But since states received stimulus aid, a number of them have been slow to actually get the aid to residents who need it. For example, Insider reported in July that while Biden set aside $50 billion to give to renters facing eviction during the pandemic, only 4% of that aid had gone out because the distribution of that aid was under the control of the states. $8.5 billion for medical care in rural areas also has yet to be spent as the Delta variant surges and COVID-19 cases rise.
NYC plans to allocated $1.45 billion extend its vaccination campaign and improve testing for the virus.
“TikTok has really become a critical part of artist storytelling,” Kristen Bender, SVP of digital strategy and business development at Universal Music Group, told Insider during a webinar on TikTok’s impact on the music industry. “Since we signed our deal with TikTok earlier this year, our labels have been extremely leaned into the platform.”
The industry’s attention on TikTok isn’t unfounded. Songs that trend on TikTok often end up charting on the Billboard 100 or Spotify Viral 50. And 67% of the app’s users are more likely to seek out songs on music-streaming services after hearing them on TikTok, according to a November study conducted for TikTok by the music-analytics company MRC Data.
Song promo deals between music marketers and influencers have also become an important source of income for TikTok creators. Some users can earn hundreds or even thousands of dollars for a single video where they promote an artist’s track.
“Music marketing on TikTok is huge,” Jesse Callahan, founder of the upstart marketing firm Montford Agency, told Insider. “It’s a big way that labels have brought artists into the spotlight the last couple of years. It’s also a big way that creators have made a lot of money.”
Many record labels have teams dedicated to monitoring the app so they can help fan the flames on a trending song when it starts to take off.
“Our entire music catalog is effectively tracked on a daily basis,” said Andy McGrath, the senior vice president of marketing at Legacy Recordings, a division within Sony Music focused on the label’s catalog of songs dating back decades. “We’re constantly monitoring actions, reactions, and trends that happen on TikTok.”
While some songs take off on TikTok accidentally, as was the case with Matthew Wilder’s 1983 song “Break My Stride” or Fleetwood Mac’s “Dreams,” other times, record labels and marketers pay TikTok influencers to promote a particular song in a video.
It’s impossible to predict what video or music trends will take off on TikTok.
RCA Records’ SVP of digital marketing Tarek Al-Hamdouni said the label’s promotional strategy involves a fair amount of experimentation with each campaign. The company will often work with an influencer agency to find somewhere between 10 and 30 lower-follower-count influencers to promote a new track in videos and then go after trends that stick.
“We actually give them the freedom to post what they’d like with that content,” he said. “If you see one or two posts start to overperform based on a consistent creative, what we can do is go find those bigger influencers and get them on board with the trend. In the best-case scenario, your micro-influencer campaign is so successful that it creates the trend on its own and then the bigger influencers are going to jump on board organically.”
While TikTok is often a go-to platform for promoting a newly released track, some artists incorporate the app even earlier in their creative process.
The Canadian rapper Tiagz (Tiago Garcia-Arenas) built a following of 4.2 million fans on the app by writing songs that directly referenced the app’s popular memes and trends, effectively gaming its search and content recommendation algorithms.
“I tried to understand the platform,” Tiagz told Insider. “I kept doing these memes because I saw that it worked.”
Not all song trends on TikTok happen serendipitously or via external music marketing campaigns.
TikTok also has an internal music division dedicated to monitoring music trends on the app. The team has a series of “promo levers” it uses to boost the popularity of songs. The company can add new tracks to playlists in the “Sounds” section of its app and apply keywords on the back end to optimize song discoverability in the app’s search interface.
How TikTok creators can make money from working with music industry professionals
Music marketers regularly pay TikTok influencers to promote songs. The practice has become so common that there are entire agencies dedicated to song promotions on the app.
For the app’s creators, it can be an easy way to monetize their following without having to create a sponsored post for a brand.
“We’ve still found that TikTok remains the most engaged, the most used, and the most rewarding per dollar spent,” Griffin Haddrill, an artist manager and cofounder of the marketing agency VRTCL, told Insider.
As TikTok’s user base has grown and content has become more saturated, marketers are turning more to micro influencers over superstars for song campaigns.
“The price point for mega stars is extremely high,” Zach Friedman, a cofounder at the upstart record label Homemade Projects, told Insider. “The way the TikTok algorithm works, it’s hard to know what’s going to be successful. Instead of paying a premium for a D’Amelio, you could pay a micro influencer $200 and their TikTok could get 10 million views. Because of this, it’s better to cast a wider net.”
The coronavirus pandemic nearly eliminated the live music business. DREAMSTAGE, a ticketed live music streaming platform launched in the spring of 2020, has plans to reverse this fate and to even go as far as transforming the traditional live music business model for years to come.
The US-based startup has provided artists with a method of generating income during lockdowns, but it’s also future-proofed for long after fans return to in-person gigs with the goal of offering simulcasting opportunities in addition to premium digital-only concerts.
The brainchild of former Sony Music executive Thomas Hesse, world renowned cellist Jan Vogler, and tech aficionado and CTO Scott Chasin, DREAMSTAGE has delivered over 50 high-definition concerts featuring musicians across multiple genres and levels of experience in the one year since its creation. Artists such as Polo G, Chief Keef, Grammy nominee D Smoke, and most recently Yo-Yo Ma have taken the virtual stage, with co-founder Jan Vogler himself kicking off the platform’s classical lineup in its first livestream in August.
Now, the startup has caught the attention of the Paris-based music streaming service Deezer, which houses a catalog of 73 million tracks, including content from major record labels like Universal Music Group and Warner Music Group. Deezer will serve as a cornerstone investor in DREAMSTAGE, leveraging its global subscriber base and millions of monthly active users to provide DREAMSTAGE with significant funds to expand its operations and establish it as a leading new format for entertainment.
The strategic partnership will see both companies working together to merge recorded and live music in a streamlined experience, while operating independently with the ultimate goal of accelerating DREAMSTAGE’s growth. Their mutually strong appreciation for musicians and genuine desire to support their craft solidified the deal.
“There’s a lot of potential,” Thomas Hesse, co-founder of DREAMSTAGE, told Insider. “It’s come together in a great spirit of partnership, and we’re both mindful and cognizant of the significant benefits of us working together.”
The DREAMSTAGE and Deezer teams share the unified mission of growing within the currently exploding global recorded music and livestreaming markets. Both have a deep understanding of the intersection of technology and music, Hesse said, and a shared entrepreneurial and innovative mindset.
“We think that DREAMSTAGE is the service that really has cracked the live streamed music experience. The live streamed events they offer go beyond simple video streaming and feel personal, dynamic and fun,” Deezer CEO Hans-Holger Albrecht wrote in an email to Insider. “Their goal is to make you feel like you’re really in the room with the artist, making the experience dynamic and interactive.”
Interactivity is key to DREAMSTAGE’s product. Fans not only benefit from the personalized experience of watching live music streamed directly into their living rooms, but they also enjoy the capability of communicating with one another in real time using the platform’s built-in chat function, which “is what truly separates this experience from watching a YouTube video on your own,” Hesse said.
Artists benefit from the interactive equation, as well. “Even when live concerts start again, live streaming will become a natural addition to live shows,” Albrecht wrote. “Artists will be able to connect to the fans in the room, but also to let fans who can’t make it enjoy the concert live, online. The ability to connect to more people also opens up a number of new digital revenue streams for musicians.”
Musicians and entertainers largely rely on live performances and touring as a means of financial survival. In the year before the pandemic, the US live music business reached nearly $8 billion in ticket sales, trailing slightly behind recorded music, which came in at $11 billion, as found in a report published by Music Watch. The live music streaming industry is expected to generate $6.4 billion by 2027, according to MIDiA Research.
Professionally livestreamed concerts allow musicians to reach a much larger audience, and through supplemental digital-only concerts that are executed and marketed compellingly, artists can collect additional revenue on Spotify and other music distribution services when live gigs aren’t an option. It’s a domino effect – digital-only concerts promote engagement with the artists, bouncing their songs back into the charts, and in turn stimulating the demand for live in-person events, Hesse said.
Through DREAMSTAGE’s integrated platform, artists can sell tickets, merchandise, and VIP experiences, as well as raise donations for charities, with the company taking a platform fee that varies according to the individual deal. DREAMSTAGE offers performers the option of utilizing their in-house production crew and social media marketing team, but also leaves artists the ability to employ their own teams.
The venues are selected according to the artists’ choice, and then cast into their virtual concert halls developed by a “world class team of engineers,” according to a release. Some concerts are available via on-demand for a select period of time, although the offering of a permanent on-demand archive is contingent upon the clearing of rights, Hesse explained.
Performances can be viewed via the Apple TV app, “with the big screen being the medium of choice, accompanied by great sound and picture,” Hesse said. The company plans on delivering mobile apps for iOS and Android in the near future, but in the meantime, performances and interactive features can be accessed on DREAMSTAGE’s website on any device.
While the pandemic was the catalyst for DREAMSTAGE, the real appeal to DREAMSTAGE lies in its longevity. The co-creator of video hosting service Vevo and former Sony Music President of Global Digital Business, Hesse is no stranger to the recorded music industry and music video space. He spearheaded Sony Music’s merger with BMG and was responsible for driving the transformation of recorded music to streaming. It also helps that Hesse is a trained concert pianist, having studied at major concert halls in Austria and Germany.
“DREAMSTAGE, in a way, creates a new format that’s a hybrid between a music video and a live performance,” Hesse said. He calls this the “Live Music Video,” which he hopes will one day compete with Netflix as its own form of appointment TV.
“We’re not really competing with people going to the concert a few times a year, which they will do,” Hesse said. “That’s a big thing; you have to get tickets which are more expensive than an online ticket, you need to get a babysitter, get the car out, drive to the venue, park the car – it’s not something you do on a weekday night.”
If your favorite artist is performing in a different town, it’s easy to just buy the ticket in one click on your mobile and watch it on your TV, he explained. This high-value streaming experience is designed to take the formal aspect out of watching artists perform by granting all viewers a front-row seat. At the same time, the quality and vibrance of the in-person viewing experience is intended to be preserved with DREAMSTAGE’s premium technology, which utilizes high-definition audio/video signal and a clear and friendly user interface.
“Our goal is to make live events in music and entertainment, which can include comedy and other forms of entertainment, as attractive and as interesting as live sports,” Hesse said. “People go to live events and go to watch the Mets and Yankees at the stadium, but lots of them watch them on the television. And the same should be true for music.”
Last summer admist the Black Lives Matter Movement and protests in support of George Floyd, YouTube announced the launch of a multi-year $100 million fund dedicated to amplifying and developing the voices of Black creators and artists and their stories. More specifically, the fund has supported programs such as 2 Chainz’ “Money Maker Fund” series highlighting HBCU entrepreneurs and Masego’s “Studying Abroad” livestreamed concert series.
Today, the platform is using capital for that effort to create a global grant program for Black creators.
“The painful events of this year have reminded us of the importance of human connection and the need to continue to strengthen human rights around the world. In the midst of uncertainty, creators continue to share stories that might not otherwise be heard while also building online communities,” YouTube CEO Susan Wojcicki wrote in a blog post detailing the decision and reflecting on 2020.
The #YouTubeBlack Voices Class of 2021
Per Billboard, the program is kicking off with an inaugural class of 132 individuals spanning musicians and lifestyle vloggers including Kelly Stamps and Jabril Ashe, also known as Jabrils, who share educational videos centered around the emerging gaming, technology, and AI spaces.
The musicians named to the group include Brent Faiyaz, BRS Kash, Fireboy DML, Jean Dawson, Jensen McRae, Jerome Farah, Joy Oladokun, KennyHoopla, Mariah the Scientist, MC Carol, Miiesha, Myke Towers, Péricles, Rael, Rexx Life Raj, Sauti Sol, serpentwithfeet, Sho Madjozi, Tkay Maidza, Urias and Yung Baby Tate.
Each grant recipient will be provided an undisclosed funding amount to be used in support of their channels, and can encompass needs such as editing, lighting or other equipment to amplify and enhance the quality of their content. YouTube will also offer additional resources such as workshops, training and networking opportunities to boost skills and fuel meaning collaborations. “We are not only supporting them in the moment, but this is seed funding that will help them to thrive on the platform long-term,” he added.
Hailing from across the United States, Kenya, Brazil, Australia, South Africa and Nigeria, the cohort was selected in part based on their past participation in #YouTubeBlack, a campaign and event series promoting Black creators launched in 2016.
Paving a future for change
“These creators and artists have been doing this work already and are known by their communities, but we’re really excited to invest in them, and we believe that they can and will become household names with this support, shared Malik Ducard, YouTube Vice President of Partners on the #YouTubeBlack community.
In today’s landscape, influencers are themselves a media channel. The budgets put against them shouldn’t just be production-driven but rather emphasize a broader commitment to diverse and authentic stories driven by co-communication and co-creation. For YouTube, this effort is not only beneficial in ensuring these creators have their voices heard, but in allowing the platform to stay true to its goals and values and its commitment to its community.
“This is not a flash-in-the pan Instagram moment. This is about keeping the drum beat of change alive, and in the DNA of our organization,” added Lyor Cohen, YouTube’s Global Head of Music, reiterating the confidence in the ability of this group to lead and find long-term success through raw passion, creativity, and an entrepreneurial spirit. “Our expectation is that these artists are going to be significant and important voices and make music even more enjoyable.”
The future of brand-artist collaborations
For brands partnering with music artists – the takeaway here is that social listening requires responsiveness, flexibility, and mindfulness when it comes to integrating culture. People want to be heard, not sold to, and efforts should extend offline. This is only achieved through a full understanding of a new age of partnerships – one where brands have a bigger role to play in artist’s lives and artists are crossing the threshold to become true digital marketers monetizing the whole self.
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