Digital distributor TuneCore last week announced a new service for its US-based clients, which will see the firm partner with a company called Lyric Financial to offer certain DIY artists cash advances, repaid by future royalties.
US-based artists who meet certain eligibility requirements will be able to take an advance to cover things like recording, marketing and touring costs in return for a one-time fee. Advanced monies will then be recouped from download and streaming royalties collected by TuneCore on behalf of the artist.
Cash flow, of course, is a constant challenge for any business, especially small businesses. And every DIY artist is also a small business. The need to spend money to make money is one of the reasons record deals remain attractive for new artists, labels usually providing money for things like recording, marketing and touring, as well as upfront cash to cover the artist’s living costs. Though a traditional label deal usually requires assigning the copyright in any recordings enabled by the investment.
Some labels and distributors will advance money to artists – or at least make marketing budgets available – without copyright assignment via ‘services deals’, though it has generally been easier for more established acts to secure that kind of arrangement. But some companies – like Kobalt and BMG – have started working with newer talent on this basis, especially where they can see an artist gaining traction on the streaming platforms.
For its part, TuneCore wants to make it easier for artists who have such traction to access the cashflow they need. With an ever increasing number of platforms offering digital distribution for DIY acts, add-on services of this kind are increasingly important to achieve some kind of competitive advantage.
Confirming the launch of what is being called TuneCore Direct Advance, TuneCore boss Scott Ackerman said: “This is a one-of-a-kind integrated offering that gives artists a hassle-free, reliable way to access their future earnings quickly and easily, eliminating the difficulty often associated with obtaining advances. We are deeply invested in the careers of our artists and are committed to ensuring they have the tools and resources needed to succeed”.
Meanwhile the boss of Lyric Financial, Eli Ball, added: “For the last two years, we have worked to automate what has historically been a cumbersome manual advance process in the music industry. TuneCore Direct Advance is a simple, easy-to-use application that provides creatives with a clear view of their current and forecasted earnings, allowing them to request advances in less than a minute. These basic tools will be invaluable to any music industry professional in budgeting and managing the ups and downs of their cash flow. The deal we have announced today with TuneCore is a huge validation of the platform we have all worked so hard to create”.
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