Apple Raises $50 Billion For Musicians
To support a company that helps musicians distribute and market their music while allowing them to keep their copyright, Apple has initiated a US$50 million fundraising round.
For as long as record labels have existed, music artists have suffered injustice where ownership rights to their own catalogue of work is concerned.
UnitedMasters is an alternative to the traditional record label model, an often-brutal system that typically requires artists to give up the rights to their music in exchange for advance payment, distribution, marketing and promotion.
In their fledgling stage, artists are often left with no other choice than to take what’s offered and lose ownership of their work, which comes with harsh ramifications once their work reaches a high level of value and it’s the label that reaps the benefits.
Under the UnitedMasters model, musicians choose to pay a US$5 monthly subscription fee or give a 10 per cent cut to UnitedMasters and retain ownership of their music. It offers artists a different type of deal for getting their work out.
Alphabet – Google’s parent company – and Silicon Valley venture capital firm Andreesen Horowitz are already investors in UnitedMasters, and they joined in a Series B funding round, which values the company at US$350 million. UnitedMasters says it will use the funds for international expansion, hiring and technology.
Apple, which operates Apple Music, the world’s second-largest streaming service by subscriptions, is painting itself as creator-friendly by investing in the artist-first company.
Apple’s head of services Eddy Cue said, “We want artists to be focused on creating the best music on the planet.
“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 was founded four years ago by Steve Stoute, a former executive at Sony Music and Interscope Geffen A&M Records. He also started ad agency Translation – now part of UnitedMasters – which helps high-profile clients 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.
More than a million musicians have released music via UnitedMasters.
Stoute is optimistic that the partnership with Apple will give UnitedMasters artists marketing support, early access to new tools and priority status, despite Apple having agreements with major music labels.