Friday, February 28, 2020

Stem offers advances via new ‘Scale’ funding product, allowing artists to keep 100% of their masters | Music Business Worldwide

Los Angeles-based digital music start up Stem, led by CEO Milana Rabkin, has launched a new artist advance service for its Stem Direct users.

Writing in blog post published yesterday (February 27) Stem describes the new tool, called ‘Scale,‘ as “a funding alternative to creators at every stage of their careers”.

‘Stem Direct’, if you recall, is Stem’s ‘concierge member service to support [its] top talent’ – announced last summer when the company revealed that it was getting out of the DIY distribution game.

The company previously offered any artist the chance to directly upload their music to the likes of Spotify, Apple Music and Pandora via its platform – making it a direct rival to the likes of TuneCore, Distrokid, Ditto Music and CD Baby.

The company’s new approach has seen it curate the artists it works with, picking a select number of VIPs from an online membership application system – not dissimilar to methods adopted by companies like AWAL or Create Music Group.

According to Stem, advances granted via Scale come with “transparent fees based on how much money the artist needs and how much the artist wants to pay back each month”.

The big selling point for the advances is that artists get to keep 100% ownership of their masters and only pay Stem’s distribution fee.

Artists can also set up face-to-face meetings with Stem’s team “to build a custom financial model to see the real cost of the deals being evaluated”.

Forbes reports that Scale is backed by New York-based investment firm CoVenture, and that $100 million will be provided in advances each year via the new product.

Stem has previously attracted investment from high-profile industry execs including manager Scooter Braun, lawyer Dina LaPolt, songwriter Savan Kotecha and Red Light Management’s Bruce Flohr.

(These investment rounds have been worth $12.5m in total, with $4.5m raised in 2016 and a further $8m raised in 2017.)

In August, Stem welcomed ex-Venmo COO Mike Vaughan to its Board of Directors.

“We think Scale advances are going to shake things up.”


“At Stem, our core value has always been clarity above everything else.  Today we launch Scale, a funding alternative to creators at every stage of their careers,” writes the company.

“We are excited to roll it out to Stem Direct users. Scale is available to any user with catalog in Stem, even if they are currently signed to another company.

“We think Scale advances are going to shake things up”.Music Business Worldwide


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