Finance

Instead of diving headfirst into the market, label execs still trying to understand how NFTs can become long-term revenue generators, given the challenges of marketing to paranoid cryptocurrency collectors who are generally skeptical of corporate vendors, while considering risk factors that range from environmental damage to unauthorized knockoffs that could diminish the value of label-sold goods. Says one label source: “We don’t want to make $1 million today at the expense of $100 million in a year.”

Source: The Major Label NFT Strategy Will Focus on Long-Term Revenue

BMG boss Hartwig Masuch would like to make it clear that his company’s new industry-shaking pact with investment giant KKR – under which both sides will co-own acquired assets – has much more going for it than its spending power. Even so, after a sustained hiatus from buying music assets, BMG has its check-book out once again… and it’s ready to write down some colossal numbers.

Source: BMG and KKR are ready to spend $1bn on music copyrights – and that’s just for starters…

Between recording new music, maintaining a digital presence, spearheading promotional efforts, and performing live, there are more professional obligations for artists today than at any other point in music history. Consequently, it’s difficult for creators to find time for each career consideration – and easy for them to neglect certain tasks while dedicating attention to other matters.

Source: Why Are Musicians Still Leaving Royalties on the Table?

Although music catalogs are sometimes compared to bonds, the income they generate can be volatile. Royalty payments are high soon after a song is released and then quickly decay. Several years on, a track’s income can be 70% to 90% below peak, according to one investor in the industry. The danger of overpaying for new music is therefore high.

Source: Older Artists Are the Havens of Music Investing

The art world is fueled by investors hunting for alternative stores of value – indeed, art is one of the most effective wealth preservers in the world. While this has historically been restricted to physical art, the introduction of enforceable ownership rights for digital art, as well as other online creations such as in-game items or audio clips, means these can now be purchased by investors.

Source: NFTs: How Licensing Technology Furthers Art’s Revolution | Kraken Blog

About two weeks back, multiple musicians staged protests outside of Spotify offices in the U.S. and abroad, demanding a higher per-stream royalty rate. Now, the campaign’s organizers have revealed that the Stockholm-based streaming platform has refused to pay one penny per play.

Source: Spotify Refuses to Offer Penny-a-Stream Royalty Payments to Artists

New York-based music and entertainment investment firm Influence Media Partners has launched a new fund to invest in what it describes as “award-winning catalogs of some of music’s most influential female music creators”. The new fund carries an initial value of up to $100 million and has been established in partnership with independent professional retirement services company Municipal Employment Retirement System (MERS of Michigan).

Source: Influence Media Partners launches $100m fund to invest in catalogs of female music creators

UnitedMasters says that the investment will fuel its “mission to enable artists to maintain full ownership over their work while expanding their economic opportunity and introducing them to millions of new fans.” The move also marks another step from Apple into the independent artist space, following its acquisition of prominent artist services, A&R and distribution company Platoon in 2018.

Source: Apple leads $50m investment round in Steve Stoute’s UnitedMasters, joined by Alphabet and Andreessen Horowitz

Today, Spotify has announced its entrance into the social audio business in a big way, via the acquisition of Betty Labs, the creators of Locker Room, a sports-focused, live talk app. Spotify says that this acquisition “builds on its work to create the ‘future formats of audio’ and will accelerate Spotify’s entry into the live audio space”.

Source: Spotify acquires talk app Locker Room to take on Clubhouse

VC funding for music startups fell by 67% from over $1 billion in 2019 to $328.9m last year. That’s according to new figures published by researchers at BusinessFinancing.co.uk in a report revealing how start-up funding changed from 2019 to 2020 and the difference in spending by country and industry. The report also shows that the number of startup music companies receiving VC funding fell from 87 in 2019 to 68 last year.

Source: Music startups saw funding levels sink by 67% in 2020 (report)