Resources where businesses and workers can apply for emergency financial assistance on the local and federal level, contribute to data-collection, and establish a foundation for generating recurring revenue online.
(Head here for a list of ways fans can help support artists and industry workers, too.)
Cash advances from music distributors, e-commerce platforms and independent financiers
A quicker option for certain music companies may be to leverage cash-advance offers from a music distributor, e-commerce platform or independent financier, if available.
Music financing firm Sound Royalties launched a dedicated, $20 million fund on Monday to offer qualifying artists no-fee advances on their future recorded-music royalties, without taking copyright ownership. Advances will be issued on a one-year payback term, and can reach up to $25,000 each; applications are open until April 16, 2020 or until the money is depleted, whichever comes first. (Note: The application page says the offer is “only valid for qualified applicants under our standard qualifying/underwriting guidelines,” meaning that only individuals who earn at least $3,000 a year in recording royalties are eligible for the no-fee advances.)
Select independent music distributors like TuneCore (which partners with Lyric Financial), CD Baby, Symphonic Distribution, Stem and Amuse, as well as independent startups like The Music Fund, also have cash-advance offers that give qualifying artists and labels an upfront advance on future revenue for a flat, predetermined fee, based on the size of the advance and how long it’s expected to take for the artist or label to pay it off.
Since they’re structured as advances, none of these distributor-led programs require credit history or collateral, nor do they charge any penalty if artists can’t pay off their advance in the allotted time. Still, make sure to read the fine print: The fees on these advances can be as low as 5% and as high as 25% — many times higher than the interest rates on SBA’s disaster-relief loans and other, more generalist initiatives.
There may also be some workarounds where you don’t have to go directly to your distributor for advances. For instance, if you use DistroKid for music distribution and collect regular royalty payments through PayPal, you may qualify for advances or loans through PayPal’s Working Capital or Small Business Loan programs.
Other examples of services outside the music industry that offer cash advances, for a small fee, include Square Capital, Stripe Capital and Shopify Capital — all of which may be accessible for musicians or labels who have an active e-commerce business.
Free or paid live streaming events
In the wake of ongoing tour and festival cancellations, hundreds of artists, event organizers and brands — from the likes of Charli XCX, Erykah Badu and Code Orange, to Rolling Stone, the Global Citizen Festival and even Chipotle — are bringing live musical performances online.
There are several tools that music companies can draw on to organize and monetize their own virtual events — from platforms like Twitch and Periscope that enable real-time donations from viewers, to newer apps like Moment House and Key that put livestreams behind a ticketed paywall, the same way brick-and-mortar shows traditionally work. (I’ve compiled a free Virtual Music Events Directory that includes a list of several dozen tools that artists and other industry professionals can use to host either free or paid live streamed events online, using either video or audio.)
Raising awareness of virtual events may be a challenge, as the likes of YouTube, Facebook and Twitch haven’t really nailed discoverability around live streamed content yet. The best ways for event organizers to spread the word about their live streams are either by reaching out to their already-existing audiences in newsletter and on social media, or by submitting to open virtual-event calendars such as those maintained by publications like NPR and independent initiatives like Stay At Home Fest.
E-commerce resources (and waived transaction fees)
Now may be a good time for music businesses to set up their own channels for e-commerce or recurring membership on sites like Shopify, Bandcamp and Patreon, if they haven’t already.
Notably, a handful of these platforms are waiving their transaction fees in the wake of COVID-19. For example, Bandcamp is waiving its normal revenue share (15% for digital, 10% for merch) from midnight to midnight PST on Friday, March 20, passing on all revenue to artists and labels on the platform. Similarly, music licensing and rights-management platform Songtradr is waiving its revenue share on all licensing-related transactions until April 18, 2020, passing on all revenue to artists and rights owners.
In addition, many artists, songwriters, producers and other creative professionals may likely be busy working on music at home — making it a good time for these creators to start cultivating profiles on music-focused marketplace sites like BeatStars and SoundBetter, if they’re not already.
SOURCE: CHERIE HU