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# Investors Are Poised To Disrupt Music Funding [Antony Bruno]
- URL: https://www.hypebot.com/investors-are-poised-to-disrupt-music-funding/
- Published: 2017-01-23T11:58:00.000Z
- Updated: 2017-01-23T11:58:00.000Z
- Description: As interest begins to grow among private investors, it looks as though music funding will be the next aspect of the music industry to experience disruption, as cash-strapped artists are. Continue reading [https://www.hypebot.com/hypebot/2017/01/investors-are-poised-to-disrupt-music-funding.html]
- Author: Guest Author
- Tags: Music Business, Music Tech, Startups & Funding, music, #wp, #wp-post, #Import 2026-01-21 10:13

[![Download](https://a2.typepad.com/6a016766638dee970b01bb096fece2970d-150wi "Download")](http://a2.typepad.com/6a016766638dee970b01bb096fece2970d-popup?ref=hypebot.com)As interest begins to grow among private investors, it looks as though music funding will be the next aspect of the music industry to experience disruption, as cash-strapped artists are forced to seek an alternative to labels.

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*Guest post by* ***Antony Bruno*** *of* ***Royalty Exchange***Contrary to popular belief, the biggest disruption to the traditional music business over the last 10 years was not solely the introduction of digital distribution. Instead, it’s been the slow, gradual disaggregation of all the artist services that labels once provided, through the introduction of alternative sources.And this year, artist financing is poised to be the next pillar to topple. Distribution was the first area of service to experience competition in the form of digital distributors thanks to the emergence of iTunes. Promotion and marketing went next, after social media and sites like SoundCloud and YouTube quickly provided new channels for exposure. After distribution and promotion, financing historically was one of the main services labels provide to the artists they signed. Artists largely had only label or publisher advances to turn to when they needed money to fund the recording of a new album, a tour, or other project. But that’s already started to change. Today, labels (and for songwriters, publishers) are far tighter with their wallets, placing fewer bets and at smaller amounts. So the creative community has been forced to seek alternative solutions. [![Download](http://hypebot.typepad.com/.a/6a00d83451b36c69e201bb096fecf7970d-320wi "Download")](http://hypebot.typepad.com/.a/6a00d83451b36c69e201bb096fecf7970d-popup?ref=hypebot.com)Crowdfunding platforms like Kickstarter, Indiegogo, Patreon, were the first to fill this void by allowing artists to engage their most loyal fans to fund their project as a sort of pre-purchase move (with other bells and whistles included). This played a critical role in changing how artists think about funding their career. In the last year, we’ve seen greater interest from music services, like Apple Music, paying artists for the right to [exclusively stream](https://www.hypebot.com/streaming-exclusives-are-just-the-beginning-draft/) their new albums. While an interesting alternative, these kinds of deals are reserved for only the most successful of artists commanding a fanbase capable of making a meaningful impact on a service’s subscriber numbers. What makes this year different is the growing interest in music among private investors. As Blackstone Core Equity Partners’ [acquisition of U.S. music rights organization SESAC](https://www.hypebot.com/sesac-sold-to-blackstone-a-private-equity-firm-known-for-leveraged-buyouts-credit-default-swaps/) this month shows, institutional investors are more than interested in acquiring a stake in music royalties. Private investors [are not far behind](https://www.royaltyexchange.com/blog/what-investor-interest-in-royalties-means-for-the-music-business?ref=hypebot.com). A number of factors are driving this investor interest:First is a desire to find investments not affected by or correlated to the volatility of the stock market. Looking at music royalties [as an asset class](https://www.royaltyexchange.com/artist-guides/how-investors-value-royalties?ref=hypebot.com#sthash.wP78Zd1N.dpbs), royalties provide investors with consistent and regular cash flow, often with better returns than other investment options. Second, is a belief that the music industry is rebounding from its decade-long slide. While investors don’t typically seek royalties to “buy low, sell high,” the upward trend in music industry revenues over the last two years certainly present an attractive opportunity. Finally, along with the industry’s rebound, is a greater focus on [more efficient royalty collection practices](https://www.royaltyexchange.com/blog/making-royalty-collections-more-efficient-turning-pennies-into-dollars?ref=hypebot.com#sthash.bJhmOzPk.dpbs). Better internal record keeping and more sophisticated technological solutions, paired with the innovations emerging from the [startup community](https://www.royaltyexchange.com/blog/music-tech-turns-to-improving-music-licensing?ref=hypebot.com#sthash.e6DbNOye.dpbs) focused on solving royalty collection problems, and suddenly there’s more money on the table to share. [![Unnamed](http://hypebot.typepad.com/.a/6a00d83451b36c69e201b8d256f507970c-800wi "Unnamed")](http://hypebot.typepad.com/.a/6a00d83451b36c69e201b8d256f507970c-popup?ref=hypebot.com)Atop all this is the emergence of services designed specifically to connect investors with music royalty opportunities in the standardized, free-market format that they are accustomed to. While [Royalty Exchange](https://www.royaltyexchange.com/sell-royalties?ref=hypebot.com) is one such service, focused on buying and selling historical royalty earnings through online auctions, we’re not alone. Another worth noting is [LIVAMP](https://www.livamp.com/funding/?ref=hypebot.com), where artists can raise money to fund a tour by offering investors a cut of the future profits. There’s sure to be others. With both institutional and private investors becoming more engaged with music opportunities, the financial landscape for artists, songwriters, publishers and more becomes more diverse. Those seeking funding can do so with backers less concerned with creative control… a sort of “silent partner” if you will. Even more interesting is the ally the music industry gains in the form of the financial sector. There are plenty of [legal and legislative efforts](https://www.royaltyexchange.com/blog/the-legal-legislative-landscape-affecting-royalties-in-2017?ref=hypebot.com#sthash.JHztUKZR.dpbs) underway that will affect nearly every entity of the music business. With investors becoming more financially tied to the music industry fortunes, they may also offer more vocal support to these efforts through formal lobbying bodies (not to mention monetary support). Ultimately, this merging of the financial and music worlds will [democratize access to capital](https://www.royaltyexchange.com/artist-guides/a-guide-to-music-financing-for-artists?ref=hypebot.com#sthash.K5zz1Qcc.dpbs) in new ways. Instead of only the most successful musicians and songwriters enjoying fat advances, a far wider range of creative professionals will find new financial opportunities available to fund their careers, with fair rates and flexible terms. And that puts artist financing on the same level of disruption as digital distribution and promotion in the grand scope of the music industry’s ongoing evolution. **​** ***Antony Bruno*** *is the director of communications for music funding platform* [*Royalty Exchange*](http://www.royaltyexchange.com/?ref=hypebot.com)*. As the former digital editor for Billboard magazine, Antony followed the digital music industry's evolution since the launch of iTunes. He since has advised such music services as Beats Music, Beatport, Topspin, Xbox, Mixcloud and others.*​

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