By: Danielle W. Carter
All eyes were on CEO of Lyric Financial, Eli Ball as he spoke at the Billboard Film, TV and Music Conference 2013. The panel was titled, “What’s Happening to Investment In Music for Other Media?”
“Five percent of the industry is making 95% of the money.”
Specialty financial companies like Lyric Financial are developing programs to meet the income needs for the 95%.
One of these product solutions includes royalty advances for music professionals and labels. Lyric explains, “[A royalty advance] is a cash advance on a royalty earning pipeline that has not yet been paid. You can draw cash immediately for royalties that have not yet been paid by ASCAP, BMI, SESAC, your publisher, or your label. This type of funding is available to all songwriters, producers, and publishers who will earn at least $5,000 in royalties during the next year.”
With the growth of financial companies, staffed by former music executives who understand the sporadic revenue streams of entertainment professionals, there is an opportunity to leverage music catalogs and other assets, thereby implementing more creative financing options.
Lyric Financial posted an interview with Business Manager Johnathan Schwartz who said, “I think the biggest challenge is that today’s earning potential is not as great as a decade ago…artists today are generating more revenue from touring and other opportunities like sponsorship, endorsements, or taking equity positions in companies. But those opportunities are really only available if you’re an A-list artist.”
Emerging artists, songwriters, and other music professionals continue to trail-blaze in the industry, standing behind music they believe in, which often means heavily investing in their craft and business upfront. Once widely available, the practice of utilizing alternative funding options may become a favorable way going forward to sustain a career in the music industry.
Let us know your comments! Would you consider using a financing program? Do you think artists can continue to rely on crowd funding campaigns?
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Danielle W Carter with Emerging Artists at Billboard Conference 2013