Fair Pay for Every Play, Ep 21: Jörg Auf der Maur - "Super-Charging" Royalty Payments

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Kristian: Welcome to Fair Pay For Every Play by Utopia - a podcast about music technology for music industry professionals. My name is Kristian Luoma and in this episode, I'm joined by the newly appointed VP of Financial Services Business Unit,  Jörg Auf der Maur. Jörg is a seasoned banker with an extensive career in various top management positions at several Swiss and European banks and a big accounting firm. In this episode, I was keen to ask Jörg about Utopia's plan to improve upon the current state of royalty payments in the music industry.

How can we improve royalty collection in the music industry and what needs to be done for us to get there? Welcome to the show, Jörg! Could you give us a short rundown of who you are and what do you do at Utopia?

Jorg: Yeah, my name is Jörg Auf der Maur. I am the VP of the Financial Services Business Unit at Utopia. I started here in October 2021 at Utopia and I am in the process of building up the entire team. We have just acquired a company in the US with about ninety people.

Kristian: You mentioned that the reason you joined Utopia as the VP of a very new business unit we call Financial Services. In your own words, what does Financial Services contribute to the family of Utopia services?

Jorg: Financial Services is one of seven business units of Utopia and we’re all here to heal the music industry, right? That's the vision of Utopia, healing. You can also phrase it like this Fair Pay For Every Play.

Kristian: Neither of us have been working in music for that long, but we've spent a great deal of time in finance and it's been striking at least for me to realize how big of a problem getting faster royalties is in the music industry. So, the concept that we will be offering with Financial Services is indeed faster royalties. It is not an advance product per se, but it is about getting money faster for the creators. How does it actually work typically?

Jorg: As you mentioned, the biggest problem today is really that the artists are getting paid on time and paid accurately. And today, unfortunately, a lot of these creators have to wait sometimes years to get paid. That's a problem because then we have a lot of talents in this world, who can’t make a living out of music because they do not get paid the royalties they create, right?

So as part of Utopia and the Business Unit, Financial Services especially, we are going to make fast royalties happen in a way that we take the royalties of the client, the creator, we look at the last 12 months on it, right, and based on that information, we can decide how fast we can give them the royalties to date - and how much.

Kristian: And even in digital payments, digital revenues, the delays can be sometimes up to six months as well, when the money flows through the pipeline. So definitely it is badly needed and appreciated by the creators. To do this we use consumption analytics, can you speak a bit to how we're collecting the data and how it will be useful for faster royalties?

Jorg: Right. I mean the consumption database and the idea behind it is actually the heart of the Utopia business model, right? The consumption data that we’re recording worldwide, the four or five hundred thousand radio and TV stations, we are recording 24/7, everything which is played where and when, that can be used for various reasons. Financial services will use it for making better forecasts for creators. That means that, if we can make better forecasts, we can also pay royalties faster.

Kristian: Absolutely. This service that you're providing in Financial Services is offered in the beginning for DSP related royalty flows and we are distributors. What will distributors get for partnering with Utopia on this great service?

Jorg: Well, basically to distribute the benefits in various stages. First of all, it's a product which binds that creator much closer to the distributor, right? Then secondly, the distributor does not have to take any risk, right? The risk is taken by Utopia and thirdly, we can all benefit from very competitive share revenue programs, so that means we are sharing the revenues with the distributors if we pay out fast royalties to the creators.

Kristian: So, in effect, everybody wins. The creator gets faster royalties and then the distributor gets compensation for the risk associated and obviously higher satisfaction and retention based on the proven results that we have been collecting.

Jorg: Yes.

Kristian: A lot of this foundation for the Business Unit is based on Lyric Financial and the acquisition that we recently closed here at Utopia. Can you tell us about the history of that company and what is the heritage that they bring?

Jorg: Lyric Financial was a very important acquisition for the business. Lyric Financial has been around for over 10 years, in the business of getting faster royalties to creators. They are already experienced, they have many good products and they have automatic processes. So that's the basis for us now to further enhance the products, to scale up the business in the US, and then also take all these experiences into Europe, into Asia and build up the same business in these continents.

Kristian: Why haven't we seen more financial service innovation in creative industries before today? You've been around financial products and seen a lot of products being developed. Why do you think now is the right time to introduce faster royalties?

Jorg: Well, I think, the world is turning around faster and faster. The technical innovations are coming up almost every day. Right. And I think it's now the right time to really come up with this vision with this business model of Utopia, because maybe others will come up and we do not want to lose this opportunity.

Kristian: I feel like now, with being able to understand the full music consumption, like the Utopia technology enables, that also provides a reduced risk for the financing services in general. We can more accurately forecast and evaluate the upcoming royalty flows.

Jorg: Exactly. Absolutely.

Kristian: Thank you so much for the interview, Jorg! Further than my conversation with Jorg, I also sat down with the COO of Utopia Music, Roberto Neri to discuss the role Utopia’s Financial Services Business Unit will play in achieving our goal of fairer royalty payments in the music industry. Utopia has established the Financial Services Business Unit to help the music industry accelerate royalty payments based on consumption analytics. Can you tell us about the projects this unit will be working on, Roberto?

Roberto: Sure. We're currently already working with Tunecore, where we provide faster royalties directly from within their platform. We're also in discussions with CMOs and various parties to offer something very similar for them. Quite simply where it takes time for royalties to be paid in the music industry, we can offer faster royalty payments.

Kristian: As part of this new unit, Utopia has set up partnerships with several banks to be able to provide a credit line. How will the partnership aid the work that financial business units provide for the music industry?

Roberto: This allows us to have the necessary capital to power the business unit, and indeed the industry needs.

Kristian: Will these advance royalties apply to revenue generated outside of DSP and music download platforms? For example, could an artist receive an advanced music for LD payments from a sync placement?

Roberto: It’s probably not as required for a sync payment because they happen pretty quickly, but we're offering so-called manual advances, which we can currently power publishers, labels, individual songwriters, or artists, so we can give them faster royalties for a period of time - rather than on an individual usage or automated through their distribution platform.

Kristian: A lot of the labels and publishers offer advances to their creators these days. Is Utopia competing with the labels and publishers by providing a service like this?

Roberto: We're not competing with anyone. We are supercharging many labels, many publishers, and we're agnostic to who we actually power with faster royalties. That could be the biggest label or the DIY artists. We're here to actually help everyone in the whole music value chain.

Kristian: As we discussed before, our solution is based on the consumption analytics and is not similar to the label provided advances where they are actually investing in the careers and development of artists, right? It's very different. How much of an improvement is this solution compared to the time artists have to wait for receiving royalties in the current model?

Roberto: I mean, there are many examples, but a broadcast in Japan can take up to three years to reach North America or the UK, for example. So you know, where you're having many plays on radio across the globe, if you think of the different timelines, we can provide the faster royalty payments upfront. So it could be up to three years, sometimes even longer.

Kristian: So, in summary. How do you see the work from this business unit changing the music industry as a whole for the better?

Roberto: We're providing an option to creators and rights holders, one that they value very much, particularly at the moment, having come through the pandemic where some people have sold rights, for example, that they wouldn't have necessarily done otherwise. By providing this for the DIY song-writer all the way up to some of the largest artists on the planet, we can provide a different alternative to what's currently happening.

Kristian: Absolutely amazing. Thank you so much for your time, Roberto. Thank you for listening to this episode of Fair Pay For Every Play by Utopia. Utopia Music is dedicated to giving fair pay for every play. We provide the solutions to make royalty payments transparent, efficient, and fair. The artists and rights holders for the music featured on this podcast have been rightly paid for their contribution as always. Please remember to subscribe on Apple Music, Spotify or wherever you listen to podcasts, or your favorite music. Find out more about what we do and the mission we're on, please go to utopiamusic.com