A new type of funding for independent artists is making news, as United Masters has partnered with BeatBread to fund artists that need cash.
Is this a good idea for you? WordPlay T. Jay has broken down how this agreement works and when it should be used.
BeatBread itself s a platform that matches investor funds and independent artists to give the artists advances, or loans, and it uses billions of data points, like plays, listeners and metadata, to determine how much of an advance an artist should get.
Unlike signing with a label, BeatBread allows artists to keep 100 percent of the rights to the music, charging a 2.8 percent fee on top of the advance repayment, with advances ranging from $1,000 to $1 million.
For example, if you got a $1,000 advance, you would eventually have to pay back $1,028, and if you got a $1 million advance, you would have to pay back $1,028,000.
T. Jay said the platform sounds legit, but there are some questions that may help you decide if it’s the right fit for you.
First off, to even qualify, you need to have 10,000 active monthly listeners, have a monthly income of more than $80-$100 coming from your distributor, and have a normal mix of free listeners.
If you qualify, you have to pay $228 up front, plus the 2.8 percent on the advance. That amount is not a gigantic hit, but you have to balance if you truly need the advance.
Terms in the contract with BeatBread allow you to control the length of the term, or how long you have before the advance and 2.8 percent have to be paid back; the scope of the work, like if it will include new releases and you catalog or only your catalog; and the amount of revenue you can keep before repayment.
If you do not pay on time, usually by the time the term ends, BeatBread will continue to collect until the agreement is paid, as revenues are funneled through BeatBread before coming to you.
The advance is normally given about a week after the term is agreed upon, and once agreed, the music distributor will send all royalties to BeatBread, which will then send your chosen revenue share in about a week.
If you do get signed or have a label partner, BeatBread can cut them into the deal, or you can use the buyout clause in the agreement.
You keep your current distributor, and if for any reason that changes, BeatBread has experts that will help set you up equally with another distributor.
BeatBread, through the advance, is buying a share of your future revenue, so the advance does not operate as a loan that affects your credit.
So, is BeatBread a smart choice for you?
The answer may be yes if you are dedicated, disciplined and have a set plan for the advance funds that will help grow your brand and, ultimately, your revenue.
The answer is definitely no if you don’t have a plan or know how you would use any money given to you, or if you would be better off reinvesting your own revenue into yourself.
Advances are most often taken in emergency situations, like if a song goes viral but you don’t have the cash on hand to take advantage of the moment. Then, it is wise to take an advance to promote while you have the attention and build revenue to more easily pay it back, then sustain the fans and your own revenue going forward.
For more about BeatBread and if it’s right for you, check out the video below!