How Technology Can Help Artists Make Money Through Their Online Audiences

This story was originally reported on ReadWrite.com.

It’s been no secret that the music industry has been struggling over the past couple of decades. After years of spiraling album sales, the industry hit a new low in 2016, with just over 100 million units sold — a nearly 14% decrease from the previous year, reflecting declines in both physical and digital album sales.

That’s not the whole story, of course. The music industry’s sluggish sales gave way to music streaming, which overtook physical music in terms of revenue last year. With streaming music’s revenues skyrocketing to $6.6 billion — representing growth of 41% — the music industry has championed streaming as its new golden goose.

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This is a good change — the music industry lost billions by fighting the shift to streaming. By focusing on CDs and digital downloads, never mind the fact that CDs saw an 84% decline in sales over a decade, the industry found itself “fighting over pennies while waving goodbye to dollars,” as The New York Times pointed out.

Musicians take the hit

This sea change of embracing the technology the music industry once feared hasn’t necessarily paid off for musicians, however. Music manager Troy Carter told TechCrunch that labels are hoarding the royalties earned through streaming, keeping more than 70% of the fees. The contracts musicians sign with labels are intended to drive revenue for the record labels, not the artists themselves. The common refrain is that for every 20 artists signed to a label, only one is successful — with that math, it makes sense that labels hedge their bets to fund all 20.

Carter believes, however, that streaming payouts could approach CDs’ revenue heyday as more users sign up. Platforms like Repost are making the same bet. The platform, designed to help musicians make a living through their online audiences, works with artists and their teams to monetize their music distribution and promote their work.

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Despite the democratization of many platforms and technologies, it’s been incredibly difficult for musicians to monetize their content, and fragmentation is a big part of the problem. “The music industry is way more complicated than it needs to be,” says Repost’s CTO Joey Mason. “Despite all of the advancement in tech, the structures in place on the revenue collection side are incredibly inefficient. To make matters worse, the copyright rules and regulations differ for each territory, so often, it’s not cost-effective to try to collect revenues in certain territories.”

Mason says that for artists, this problem is compounded by the fact that there’s no seamless way to collect all of their earnings. They’d have to work with multiple entities — performing rights organizations, publishers, labels, distributors — to collect every cent they’ve entitled to. This forces artists to spend more time developing business skills than creating new music.

Consolidating an entire industry

When Mason and his co-founder, CEO Jeff Ponchick, built Repost, they aimed to eliminate as many of the distractions for artists as they could. They recognized that most of the artists they spoke to struggled primarily in terms of exposure — they hit a wall as independent musicians and needed help getting to the next step. These independent musicians then faced a laundry list of tasks: optimize music on every platform; earn press write-ups; find promotional outlets; collect checks from SoundCloud, YouTube, etc.

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Seeing how confusing and draining this was for artists, Repost built itself as a one-stop shop for doing everything. By eliminating multiple distribution and payment touchpoints, the platform also removed the burden of dealing with a variety of infrastructures, accounting practices, and more.

“A lot of people don’t know the difference between a music distributor and a record label,” Ponchick says. “For a distributor, we’d be seen as insanely expensive, taking 30 percent of artists’ money while others take 5 percent. But we offer label services and marketing the way a record label does, without taking any ownership of the music itself. It’s a way to make it OK to remain independent, for musicians to avoid signing with a label. They can make $20,000 to $30,000 per month and retain ownership.”

Chance the Rapper is one well-known indie artist who’s avoided the dreaded “sellout” label and made a successful go of it. While his success is considered a “fairytale” within the industry, Repost’s team aims to make independent success attainable. It started its quest with an algorithm. Artists apply to join Repost’s platform with their SoundCloud IDs; the platform’s algorithm combs the artist’s channel, assessing her average play count…