Apple backs independent musicians with $50 million investment
UnitedMasters, which was launched four years ago with $70 million in Silicon Valley backing, is an alternative to the traditional major label system. That system typically requires artists to give up the rights to their music in exchange for an advance, distribution, marketing and promotion.
Under UnitedMasters’ model, musicians choose to pay a $5 monthly subscription fee or give a 10 percent take to UnitedMasters, and retain ownership of their music.
Google parent Alphabet and Silicon Valley venture capital firm Andreesen Horowitz are already investors in the company, and they joined in a Series B funding round, which values UnitedMasters at $350 million. The company said it will use the funds for international expansion, hiring and technology.
UnitedMasters has released music from more than one million musicians, including NLE Choppa, Lil Tecca, Lil XXEL, and new artists, Tobe Nwigwe and Curtis Roach, whose “Bored in the House” went viral on TikTok under pandemic-related lockdowns.
With the investment, Apple, which operates Apple Music, the world’s second-largest streaming service by subscriptions, is positioning itself as creator-friendly. It also shows that there are different types of deals that artists can make in order to get their work out.
“We want artists to be focused on creating the best music on the planet,” Eddy Cue, Apple’s head of services told The Journal. “That’s their art and skill and it’s hard to have to be the marketing person and the finance person and the salesperson and do all these things when you’re starting out.”
UnitedMasters founder Steve Stoute, a former exec at Sony Music and Interscope Geffen A&M Records, also started ad agency Translation, which is now part of UnitedMasters and helps high-profile clients including the NBA, ESPN and State Farm connect with artists.
“We’re at the beginning of a new way these models around artists are going to work going forward—everyone’s moving from employee to ownership,” said Stoute.
Major labels continue to benefit the most from streaming services, which pay artists out from a pool of subscription and advertising revenue based on market share.
“You don’t want to feel that because you’re independent you’re lesser than,” said Stoute. “Just because you chose to own your own rights and go your own route doesn’t mean you shouldn’t be able to get the same level of opportunity and promotion.”
Source: New York Post