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  • Writer's pictureEric Doades

Capital for the Creative: Financing Truly Independent Music with RoyFi

Independent artists have long had ways to make and distribute music themselves, but financing projects has always been tough. That’s all changing, as artist advances are increasingly democratized, even for artists without a label deal. Peter Harvey and Lars Murray of RoyFi lay out exactly how this works and what it means for artists.

We explore their path into the music industry and RoyFi's pioneering efforts to provide equitable, affordable access to capital for artists.


Along with artists, we'll examine how RoyFi is actively supporting independent labels, distributors, and other partners, and the noteworthy collaborations that are ensuring a more prosperous future for the music industry.


We'll also discuss emerging trends and the importance of adapting to seize new opportunities, hear about the impacts of streaming fraud on the cost of capital and how companies are battling it, and shine a spotlight on thought leaders and companies that are making waves in the music innovation space. Learn more about the exciting developments shaping the music industry in this week’s episode.


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Episode Transcript

Machine transcribed


0:00:10 - Dmitri

Welcome back to Music Tectonics, where we go beneath the surface of music and tech. I'm your host, Dmitri Vietze, and I'm also the founder and CEO of Rock Paper Scissors, a PR firm that specializes in music innovation, music tech and so forth. You've heard me talk about the tidal wave of music creation coming down the road, and you've heard me talk about the inevitability of transparency in the music industry, but it's been a while since we've talked on the podcast about the convergence of the two, and as more and more artists are writing, recording and releasing music while having access to more information about the industry than ever, it's shifting the ways deals are constructed for artists. It's happening with record labels, but it's also happening in new ways, and today's guests will help me explore new ways in which artist financing is emerging and influencing artists in the industry. Peter Harvey is a co-founder and CEO of RoyFi, where he's working to democratize access to capital for the creative class through non-recourse advances to artists at rates that are significantly lower than what incumbents are charging.


Peter has over a decade of public and private market underwriting and structuring experience across various roles. In his work with large family offices and institutional clients. He invested billions of dollars across the globe on behalf of clients. He began researching the music financing market in 2019 and was surprised by the disconnect between the quality of catalog assets and the high rates that artists are being charged to access capital. Through collaboration with Dawn Griffith and Corey Whiting, RoyFi was born, and here's Peter on the show. Welcome to the show, Peter.


Peter

Hi Dmitri, thanks for having me.


Dmitri

Yeah, great to have you. You know you were in finance and I'm curious why did you dive into music, Peter?


0:01:54 - Peter

Well, I think the starting point is you have to understand that I have absolutely no musical talent but I love music, so there was really no option for me to come in on the creative side, so I had to find my way into the industry through means that were probably a little better suited to my skill set. And here we are with a finance company or financial technology company here in the industry. But we actually go back a little bit further than 2019 to some work that I was doing in the royalty space, but actually in the pharmaceutical industry. I was doing this for some of my pension clients when I was managing money for institutional investors and we really, really liked the structure of intellectual property investing. We got to understand the real risks and the regulations around purchasing royalties. And one thing that happened there was others found the space as well. In particular, a large Canadian pension fund found the pharmaceutical royalty space, put a ton of money into it and effectively soaked up all of the liquidity in the market and there goes that opportunity. But we've done a lot of work to understand what's going on and how to value these assets and how to underwrite the risk, and so I started looking into what other industries looked similar to in-market therapeutics and the royalties that are generated from the sale and you don't have to make that big of a leap to see.


The music industry is quite similar, but actually with significantly more favorable structures to copyright law.


Versus patent law, copyrights are significantly longer and when you take into account the increase in streaming and streaming prevalence in the market, it's actually a lot lower capital need to distribute music catalog and collect those royalties as compared to the distribution networks that approved therapeutics have to go into.


So all of that is to say, I started doing an intellectual property investing back in 2018, 2019 and got introduced to my co-founder, Dawn Griffith, in 2020 to learn a little bit more about the music royalty space and the alternative financing models that were in the market. And if you take the approach of coming at the music industry and music catalog, if you're coming at it from a risk perspective and you understand what the risk is, and then you find out that artists are being charged 40 or 50 percent interest rate equivalents, you say wow, that doesn't make any sense from a risk perspective. So there's an opportunity to come in here and cut the market in half while still having a great business model and that's really why we started RoyFi is, very simply, I love music, I wanted to be able to help give back to the creators that have given me so much just through the creation of their art and consumption, and there's a great business case for doing it better, more transparent and what I would argue is the right risk, appropriate way.


0:05:20 - Dmitri

Wow, it's really nice to hear somebody come in from a different industry to see the possibilities here in a way that's just purely based on the numbers. Obviously you're here because you like music and you're interested in supporting musical creators, but it's nice to hear somebody who's got another background that says no, there's actually, there's potential here that can actually save artists money, make artists more money just based on the numbers alone, because we don't hear that every day about the music industry.


0:05:50 - Peter

Yeah, it's really. It was kind of eye opening to me when I when I found out what was being charged and you know it sometimes takes a different lens to come in and say, well, just because you can doesn't mean you should, and that's, that's, I think, kind of one of the founding ethos of RoyFi.


0:06:09 - Dmitri

Got it. So also joining us today is Lars Murray. He leads business development for RoyFi. A music industry veteran, Lars has been involved with new media record labels since the 1980s. He's worked for Rykodisc, Virgin Records and Columbia Records and has performed and recorded in two bands. He was senior vice president of strategic partnerships at Pandora and he's a partner at PopCult Worldwide, which produces and markets premium podcast for the entertainment industry, including Disney, Disney Music Group, Interscope records and Metallica. Here with your RoyFi hat on. Welcome to the show, Lars.


0:06:44 - Lars

Thanks Dmitri.


0:06:47 - Dmitri

How did you get involved, Lars, with RoyFi?


0:06:50 - Lars

So it's actually kind of a funny story. So if you'll, if you'll stay, if you'll indulge me for a second. So last year, 2022, at Music Biz I was, I was actually meeting up with a podcast partner and ended up at a table over a drink with with a guy who sort of finance looking guy sitting to my left and I asked him what he when, when, the when our host had to go and take a phone call. I asked him what he did and he told me that he was disrupting the payday loan model in independent artist finance. And I said, sure you are.


I didn't really believe him and, long story short, asked this is Peter Harvey, who we're talking to asked him to to demonstrate that that he was actually able to do this right then and there, and that he was going to be able to provide capital to do this, that he had the technology that was working and it didn't. He was able to to convince me within within a week that he was doing it, doing it for the right reasons, and I I set aside my policy of not taking on any more consulting clients at the time and decided, because he was a person doing the right thing for the right reasons that this would be a good company to be involved with, and so now we've been working together about a year and a half, and I don't regret a moment of it.


0:08:27 - Dmitri

Awesome, Great. Well, this will be fun to have you both here talking through some of the issues here. Peter, I'm curious. Going back to you, what is the music finance landscape look like? Can you give us a high-level view?


0:08:41 - Peter

Yeah, I mean the landscape is really dominated and really no surprise here by the high level catalog acquisitions the Springsteen deals, the Dylan deal, the Bieber deal, and those are really great validating events for the industry. However, they don't really touch the smaller artists. It's great that BlackRock wants to come in and put a couple billion dollars. Same thing with KKR. That kind of validates the asset class, if you will. Music rights is an asset class, but where we see a significant gap is in the lower end of the market. The lower end doesn't mean just up and coming artists or up and coming songwriters, it really means anybody who's making less than a million dollars a year, which is a huge swath of the industry. And there it's still a relatively you know Wild West approach.


You know the labels are actually pulling out of that part of the market to an extent because you know they're trying to de-risk their investments. You have a couple of different providers coming in and seeing the opportunity and trying to capitalize on that opportunity. You know, I think until we started RoyFi there's nobody who's interested in, you know, partnering with creatives at the lower end of the market and lower to middle end of the market, kind of the blue collar creatives in the industry, those that do it but don't drive a Rolls-Royce and make a living. So you know, I think that a lot you know. To sum that up, you know there's a ton of liquidity being pumped into the top end of the market, but the bottom end of the market is still pretty dry, and that's what we're trying to change.


0:10:32 - Dmitri

Got it and I'm curious I mean, we're hearing it's interesting artists used to always just talk about getting a label deal, getting a label deal, and now you have a phase where people were just talking about distribution distribution, going direct and now there's more of this conversation about other ways to finance your career. It's almost like it's a real shift, honestly, and I'm curious why it's become easier to issue advances on royalties in recent years, unlocking this possibility, and what kind of technical or technological innovations have played a role in that change?


0:11:06 - Peter

Yeah, I think you know the elephant in the room is obviously streaming. Right, streaming has increased the amount of data that everybody has. You know, sometimes there's too much data, sometimes there's not enough data. But you know, the fact that we have streaming and we have granular data on what's going on at the consumption level means that, you know, groups like RoyFi have more information to make informed decisions and, you know, and therefore we're able to bring capital into the market.


It's not just a hey, I've got a friend of the label. Label says that they're shipping out a ton of albums. You know this is a, this is a sure thing. Well, you know you can't really underwrite that, but what you can underwrite is, you know, 12 to 18 months worth of hard earnings data from a, from a distributor.


So, you know, the first thing is data and its availability, and the second thing is we've got significant improvements in technology that allow us to ingest that data, turn it into usable insights that we can then, you know, get to a point where we're comfortable making an offer of hey, you know RoyFi will give you $10,000 and we're confident that we'll collect the next. You know, 10,000 or $12,000 of earnings that come off of that catalog. And you know, it really is a question of understanding the risk, and without the data you can't understand that risk. We have that data now. The risk is in front of us, it's very prevalent and therefore you know we are able to raise money, we're able to get a financial partner that's willing to put money into the space, and that's, I think, the biggest change and why you. You see more companies wanting to be involved in royalties.


0:12:59 - Dmitri

So that's on. That's kind of on the on the supply side of the money. I'm curious on the demand side. What's changed there? You think that that creates this opportunity for companies like yours?


0:13:14 - Peter

Yeah, everybody wants to own their rights. They see the value of it right. They see the value of having control. It used to be a situation where you could only go through a label to get it. You know, to get your music out and from consumers.


But because you know all of the tools that an artist needs to become successful are really open source and available to them, you know, you have the. You know the rise of the entrepreneur, the entrepreneurial artists, that treats themselves like a small business and approaches this, you know, like a job and they say I think I can do this. And you know, as a result, I don't have to sign this 360 deal. I don't have to sign, you know, with a major. You know because I want to do it myself, and that's not to, that's not to say there's anything wrong with signing with a major, but there are. You know there are different deals that are best for each artist and I think just be the availability of an alternative path has obviously, you know, resulted in a need for capital and you know, previously capital only came from, from the label.


0:14:22 - Dmitri

Lars is someone who's worked in. Yeah, a couple record labels. Yeah, I want to add a couple of things here.


0:14:27 - Lars

I mean one. One is that you know that opportunity is there. There's more transparency. The data drives more transparency. It drives more of a culture of transparency in the industry, which is the opportunity for both the artists and for companies like RoyFi. But the other thing that's really key is that you need to make it dead simple. You know, and just you know, the data drives the ability of RoyFi to create something that's dead simple.


But that's one of the reasons, one of the major reasons you haven't seen this stuff before. There's actually two things. One is the willingness of the people who are paying the royalties to be transparent about the data, not just collecting it, but actually having a whole class of companies that will be transparent. And then the ability on the other side of the artist in the teams and this is sometimes even a bigger challenge to, you know, take advantage of it. And what I loved about RoyFi when I first saw it was that it was something that was very, very easy to understand from the end user standpoint. So it's kind of both of those things.


0:15:32 - Dmitri

It's interesting. It's almost like for all the criticism that streaming services have received for these fractions of pennies and this fragmentation and the distance between fans and artists, there's this flip side of access to data that's pushing towards transparency, that's leading to these types of opportunities. Absolutely, yeah All right, we've got to take a quick break and when we come back let's talk a little bit more about the terms of these deals and also, what are artists doing with these advances. We'll be right back.


0:17:32 - Dmitri

Okay, we're back and, Peter, I wanted to ask you, before we got into a little bit about sort of this transformation, of how artists in the industry are thinking about financing, how do the terms for these kinds of deals get set and how did you approach them at RoyFi?


0:17:47 - Peter

Yeah, the terms of the deals are really based on two factors. What is the risk? The risk really is who is paying your royalties? So a small label that is paying out $100,000 a year in royalties is significantly more risky than a TuneCore or a Sony or a BMI. So it starts with who's paying. Who's going to pay the royalties out?


Because one of the things that we do is we step into the shoes of the artist and we get paid directly from the source that's paying their royalties. We don't say, hey, pay the artist first and then you pay RoyFi artist. And that's important because these aren't loans and we're not taking the artist's credit risk. We don't care whether or not artist A or B has a credit score of 100 or 800, because they're not the one that's paying me back. The second portion of the risk calculation is how far out are we going? Are we going out three months? Are we going out a year? Are we going out two years of future earnings? And, just like you would price a term loan differently, we price our advances based on how long we expect for them to recoup. Now there's an important nuance there, which is what we expect the advance to recoup and the amount of time that we expect the advance to recoup in is really irrelevant to the pricing once the deal has been done, because if we expect the advance to take two years to recoup and it takes five years to recoup, our structure never changes. That's the risk that RoyFi bears.


We don't have recourse on the catalog. It's a very simple transaction. You get $10,000 today, our fee is $2,000. We're going to collect the next $12,000. That's the entirety of the deal. It can never go longer. It can decrease, though if it takes less time. So the time can decrease. Got it and the fee as well. So we don't have a situation where, if we underwrite the advance to two years, you have a hit song that pays off in one year. You're not still stuck paying that $2,000 fee. We actually have options in our agreement that allow you to take out the advance with a lower fee. So kind of baking in all of the positive elements of a revolving line of credit without the pitfalls of compounding interest and foreclosure or actually securitizing the catalog. Those are things that we think are really important, but they're nuances, they're not things that are necessarily understood by the entire industry.


0:20:38 - Dmitri

It's interesting because even just as you were saying those words and I've had to listen closely to keep up with this finance guy here on our podcast but even as you were just saying those words, I was like, shoot, maybe I should start releasing some music. There's access to cash for this. I'm like, wait a minute. No, I can't just do that. But I did have this psychological switch of incentivizing creativity for my own life and doing something commercial. It's kind of funny, which leads me to my next question. I'm curious, how have artists use advances? Because I suspect, as people hear how this is operating because you hear either the success stories or the travesties of advances from labels that never get paid, never get recouped and all that kind of stuff I'm curious if you can share a story of an artist that made the most of their advance in this kind of setup.


0:21:26 - Peter

Yeah, absolutely. We've got a client of ours that's been almost the poster child of exactly how to manage your career as an entrepreneurial artist. It's an artist called Jay Monti. He actually came to us as he was getting out of a major label deal where he didn't feel as though he was necessarily receiving the attention that he thought he should have. So he's coming out of this situation where he has his back catalog, he's got a ton of projects that he wants to release, but he doesn't have the finishing capital to get those projects finalized as well as live his life while those projects are being released.


So we actually had Jay come through and he took an advance in 2021.


I won't say the dollar amount, but I'll say that his earnings at the time he qualified for about eight months worth of future royalties that he could roll forward.


He took that money, pushed up his project, started releasing his project and by the time that he was done with that project after about a month and a half two months, when we started to see those earnings come in he had quadrupled his earnings just because he had the ability to actually sit pat, wait and execute on the vision that he had by just rolling forward a couple months of his future royalties to the point where he went from in 2021 having a total of 1.7 million streams to in 2022, he had 6.7 million streams. He's absolutely a rock star for how he's taken the proceeds and kind of rolled it out into a career that's now completely self-sustaining. I think the last time that I looked at his earnings, he is making on a monthly basis now the same amount that he took for his original advance, and that's just a really, really cool story because you can see how it tangibly results in a significant pickup in your career and when you own all of those rights, the fruits of making that investment into yourself are really really quite impressive.


0:23:59 - Dmitri

And it's super cool. Now he just has to tell other artists they understand how to kind of budget and plan for something like this and take advantage of it and see where they go with it. It's super cool. In some ways, the democratization of royalty advances is the last frontier in the indie-fication of the music business. Lars, I'm curious given your background, how do you see this impacting self-managed artists?


0:24:22 - Lars

Well, I think, first of all, yeah, now they can afford to do the things that they always wanted to do without having to put themselves into endless hawk, and I mean that is the main thing and that's the market that we're going straight after.


But, as I alluded to before, there's still a lot of work to be done, and self-managing is very, very different, very, very difficult, and not everybody is a Jay Monty. Which is one of the things that we've kept in mind very carefully is that we can't only serve the self-managed artists. We can provide them with an option that's not available to anybody elsewhere, with the kind of friendly terms and a little bit of to put a not, so I guess I'd call it hand-holding. It's a little bit of hand-holding because we're not. We're being very careful not to get people in over their heads, and that's why we only take the short terms, and we really want to make sure that we're not doing something that's going to get somebody in a position where, geez, I'm sorry I took that money early because now I can't afford to do anything else.


And now I've given my catalog over. On the other hand, the other thing that we're doing because we realize that people who have teams should also be available or should also have this available to them we also can help out and we want to work with. We're seeking out partnerships with indie labels, indie distributors, anybody who's along the royalty stream, along the chain, that is interested in speeding up their payouts so that they can invest in their career. So that's, I think, there's at the very, very low end of the spectrum. We're something completely new and if you go a little higher up the ladder in terms of resources, we're something that's just maybe a better alternative than what's been out there before. And again, we really want to encourage people to invest wisely in their career, and those are the other kinds of partnerships that we're doing, which is the kind of partnerships that make the money that they take in to invest in their career, make those dollars go further and even, in some cases, go directly to recouping their advances that they've taken from us.


0:26:48 - Peter

Yeah, and you know I'd add on to that as well that you know we're not only looking at the individual rights holders. As you know, a potential client for RoyFi we work with independent publishers, we work with independent labels, independent distributors, and we can, you know, obviously they have cataloged themselves so we can actually help to provide capital to even the business apparatus around the independent artist, to help make sure that the money that's going into these careers is well spent. And that's, I think, a really important thing because, you know, while an artist can come to us and take in advance and do whatever it is that they want to with the proceeds of that advance, our preference is always to keep the money inside of their career so that they can actually, you know, realize a return on investment for those dollars. And you know it's part of what we're doing outside of advances at RoyFi is we're also partnering with good offshoots for the money.


So you know, we have a partnership with Foundry, for example, to provide digital marketing campaigns to artists where, you know, 100% of what would otherwise be a revenue share of RoyFi actually goes back to the artist to recoup their advance, because we want to encourage good behavior with with the capital, and you say, hey, if we can de-risk, you know, investing in banner ads by guaranteeing you that you know up to 10% of every dollar that you spend with Foundry goes back to recoup your advance, you know that's just us saying hey, you know that's good for RoyFi, because what's good for your career is good for RoyFi is good for you. And you know it's all part of just trying to actually align ourselves with the creators in the industry, because we think that you know that's going to be the right course to bet on for the next 20 or 30 years. I think the whole industry is coming to that realization and I think that's a really important component to what we're doing.


0:28:52 - Dmitri

I love that aspect of including an element of investing back into the growth of the catalog in the career as part of the model super cool. Are there any other new developments that you think are going to flow from this type of innovation on?


0:29:04 - Peter

On the financing front, yeah, I think, yeah, I think the biggest thing is it's going to become increasingly more difficult for bad deals to get peddled to artists. Artists are going to have options. Publishers well, not publishers, but songwriters are going to have options with regard to what they want to do with their catalog. And you know, hopefully, this results in, you know, significant catalog ownership and just general rights ownership for creatives in the industry. You know, I think, that a bigger piece of the pie going to the creative classes is only going to help, you know, the product that's being produced for consumers like myself. I think that's going to be one of the, I think, the really big things here.


You know a lot of what's going on in the industry, especially in the third party finance space, is you know a way for people to come in and acquire catalog in an inexpensive way where you know, if I come in and give you an eight year advance and then all of a sudden, you know, two years into that advance you don't have any more money and you're not going to see any more money for two more years or for six more years, you know what are your options. You know. Well, it's really convenient if I say, hey, you can sell your catalog if you need more, more money. But first of all, that would risk my advance, right? Because if you have an outstanding advance and you then go sell your catalog, you've got to take care of the process before the rights can actually transfer. And then, if you're selling it into a captive platform that's going to administer that investment, all of a sudden, you know, you just created a synthetic ownership through administration and I think that's, you know, one of the one of the things that I hope doesn't happen.


I think that's more access to fair and transparent deals and more education to creatives about financing, and you know the various pitfalls and I've head that one off at the pass. The alternative is we don't and that happens and you know, I think, I think you'll. You'll kind of see a trail of tears at that point in time, which is something that we're really hopeful isn't going to happen. I think it's going to happen. We're fighting pretty hard to make sure that it doesn't happen.


0:31:53 - Lars

On a rosier note, I expect to see a lot of innovation and use of funds. For example, it's always been hard to turn streaming revenues into fast investment in things that are very timely, things like investing in touring or travel if you're just a songwriter or a studio musician or merch things that can really bring a high return on that investment that usually require a lot of waiting. So, how the proceeds from a RoyFi advance are used, there's going to be all kinds of different stories and we expect to see a lot of innovation on that front as well, and it's one of the things that we're really really because it's so new, the concept of it. It's something that we really have to drill down on with artists, because it kind of sounds too good to be true sometimes that they can actually access these funds and invest them in themselves.


A lot of people just sort of are resigned to the fact that this stuff is not available, so we think just that the mere availability of it is going to drive a lot of decision making, a lot of things that we can't even predict. But the thing that is really most interesting to me and going back to hey, maybe I should do this, as you said earlier, dmitri. Yeah, I mean if I can cash in some of my Spotify Royalties and do a run of limited edition t-shirts at a very high margin, that's a great use of funds. Or if I need to fly to LA to go work in the room with a producer and I couldn't afford to do that before, maybe now people can afford to do that and that can maybe help turn a one hit viral wonder into an artist's career.


0:33:36 - Dmitri

I love it and I could see in this moment kind of like TikTok, skyrocketing creators of people being able to respond much more quickly and really build a career off something that might have just been done on a lark at first or kind of feeling more like. It's just like I'm a creator rather than an artist and then all of a sudden you're like wait, I'm an artist too and I can actually go with it. It's. It's like a whole new concept around financing for user generated stuff as well, which you know we're right at this cusp, right between sort of like are you an artist, are you a career musician or are you a creator? Is this UGC Like we're? And it's like, now that we're at this place, it's like the timing of this type of financing is right in the right spot, which is super interesting.


0:34:23 - Lars

Yeah, and just to triple underline, it's not just the individual artists who can take advantage of this, it's also, you know, small indie labels, you know small publishers, you know anybody who really needs to invest in their career. You know we're making, you know it's, we're making it look more like a bank than a credit bank. Rates than credit card rates Right, nobody really wants to be in credit card debt and we don't want to send people into debt. Awesome.


0:34:53 - Dmitri

All right, we got to take another quick break and when we come back let's widen out, let's talk about some other trends and who else we're tracking and all that kind of stuff. We'll be right back.


All right, we're back and I'm curious, Lars, when you widen out beyond RoyFi, what other music innovation trends are you keeping an eye on, or, Peter, whoever wants to jump in. I'd love to hear from both of you kind of like trends. You guys are watching. Lars, you want to jump in?


0:36:22 - Lars

Well, I think yeah, I think I touched on it a little bit it's just the increasing compression of timelines and whether it's TikTok, whether it's whatever, the next thing is, whether it's you know, it's, I think that the promise is being able to collect more revenue streams and different revenue streams, whether it's you know, from licensing, whether it's from SYNX or whatever. It's really hard to single anyone out. I think it's more about timelines.


It's more about being able to move quickly and you know, a lot of things kind of roll on in similar fashion. And what we're trying to, where we're trying to get into the story is at a place where people do start to think about what they should have rather than what's been available to them forever. And if you just put an old royalty structure on top of a fast-moving, you know TikTok universe for lack of a better term or Peloton or whatever, then you're just kind of repeating all the same mistakes. And there is a speed that's available now. There is a transparency and again I see more secular trends rather than kind of outlining one specific technology. In fact, I've often found that when I dive too hard into one specific technology or trend, you go down a rabbit hole and then you miss the other three that happened at the same time.


0:38:08 - Dmitri

Oh, I like the macro trend of just timeline. I mean everything in life, in society, in the world right now feels like it's operating at a breakneck pace and innovation itself, but certainly music creation and what does that mean? Like what's? You know how that changes formats of songs and uses of songs, so it makes sense that that would be something to keep an eye on and all the things that go along with it.


0:38:29 - Lars

And I wasn't going to say AI, because that's another whole rabbit hole that we could dive down but I mean that's going to have that will everything that's new will have consequences with regard to everything that RoyFi is doing, and that's the great thing about being a young company, you know that is tech-based but also bringing some capital to the story, that we have some flexibility in what we support. You know we've started with streaming royalties because you know, as Peter outlined, it's a predictable revenue stream that's securitizable and but there are as the timelines get faster. You're keeping up with the timelines on that and taking advantage of stuff and while making hay while the sun shines. It's really important.


0:39:17 - Dmitri

Yeah, Peter. What about you? What are some music innovation trends you're keeping on our own?


0:39:21 - Peter

Well, to keep with the non-rosy trend that I've taken here, you know, I always go back to what impacts the cost of capital to the industry, because that's one of the things that we're trying to fight, right, it's, you know, we're trying to bring the cost down to the rights holder so that they can invest in themselves and they have a reasonable hurdle.


And one of the things that is artificially but rightfully propping up the cost of capital and the risk in the industry is streaming fraud. And you know, the fact that it's so prevalent and you know it's so pervasive across the entire industry is, you know, is something that we watch very, very closely and you know, it's really, at the end of the day, our biggest risk as a company that's providing capital and it's something that I think the whole industry needs to be focusing on, you know, in a really big way, because it's what's gonna keep, you know, music from you know basically being, you know, the same as any other industry in the world that you know is regulated and does fight fraud, you know, pretty aggressively. You know there's plenty of companies out there that are kind of taking up this fight, but until it's, can you be quick? It's across the industry and it's not used as a tool by artists and labels. You know, it's something that ends up hurting the entire industry, you know, and it's something that we're really mindful of.


0:40:58 - Dmitri

Awesome Not awesome that it's happening, but awesome that you guys are sharing your thoughts on these things. And one more thing that we like to do on the podcast is widen out our network a bit for our listeners. And I'm curious, before you go, what are some other thought leaders, companies or writers that you think we should be paying attention to for inspiration, or at least that you're paying attention to who wants to go first?


0:41:21 - Peter

Yeah, I can jump in there.


You know, I think some of on the individuals that really have a really good pulse on the industry and where it's headed, both from a legal and a technological perspective.


You know the two that come to mind are Cliff Fluet and Pete Downton. You know those guys are on the absolute cutting edge, but from a company perspective, you know this is one that you know those that know will know that they are really and truly, you know, practicing what they preach and putting artists first in its TuneCore. You know they're one of the. You know they're one of the giants in independent distribution, but they are one of the companies that we actually see taking a stand for their clients, which is incredible. And then Beatdapp to further hammer home the fight against fraud. You know what Beatdapp is doing is incredible and I think that they're, you know, an absolute leader in the marketplace and you know we really hope to see them become, you know, kind of an industry standard, because you know, when you get an overlay like theirs in the data, it becomes really, really tough to cheat the system, which means that the honest actors get paid what they're due.


0:42:43 - Dmitri

Awesome, well, glad to hear those shout outs cause. Both Beatdapp and TuneCore will be out in full force at the Music Tectonics Conference, along with you guys as well, Lars. Did you have any shout outs before we wrap up here?


0:42:54 - Lars

Oh, I mean you asked about writers. I'm a big fan of Penny Fractions and David Turner comes at it from a very creator friendly perspective, I think. Going back to my timelines, Doug snooze on the majors, they're moving very fast these days and, you know, the true innovations always happen at the indie level. But what is amazing is how fast the response rates of the major labels have gotten, and you'd be surprised at you might be surprised at how much interest there is over there and what we're doing as well.


0:43:34 - Dmitri

So super cool. Love it. Okay, Well, this has been awesome. Before we wrap up, one last thing. Lars, you've been to Music Tectonics. RoyFi is going to be there in full force. I'm curious what are you looking most forward to at the Music Tectonics Conference this year?


0:43:47 - Lars

First of all, I'm looking forward to another year of no fires that will be good, me too, please. No, I mean for me just it's a little bit like old home week and you know, catching up with all of the interesting and exciting people that you know we didn't see enough of each other during the pandemic Still feels like we're still making up for lost time, definitely. So there's that, and of course, you know, Mr. Harvey on a panel is always an entertaining prospect.


0:44:20 - Dmitri

Awesome. Well, Peter and Lars from RoyFi, thanks so much for being on Music Tectonics.


0:44:25 - Peter

Thank you.


0:44:27 - Lars

Thank you.




Music Tectonics at NAMM 2023

Let us know what you think! Tweet @MusicTectonics, find us on LinkedIn, Facebook and Instagram, or connect with podcast host Dmitri Vietze on LinkedIn, Twitter, and Facebook.

The Music Tectonics podcast goes beneath the surface of the music industry to explore how technology is changing the way business gets done. Weekly episodes include interviews with music tech movers & shakers, deep dives into seismic shifts, and more.

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