As much as I love Yancey and the rest of the Kickstarter crew, I had to give a shot to TuneRights co-founder Ray Monner to explain how his service differs from other online crowd funding services for the music industry. However, before I get into it, check out their demo, so you have a frame of reference before reading the rest of the interview.
Our initial email Q&A:
-Were you always in music?
Yep, Music has always been central to my life. I studied piano as a kid and started composing, recording and playing in bands when I was a teenager. I’ve been on the creative side of music, until recently.
-What caused you to gravitate towards music?
Freedom to create. There are no limits to music, only one’s imagination. I grew up in rural Canada, and music was my link to the outside world.
-How did you think of the concept for TuneRights?
I sat in the studio one night, after working all day on what I thought was my new “hit song”. I had recorded the song and it was ready for exposure. I was frustrated, because, I felt that my song was a “hit” and was surely valuable…. But there was no immediate way to “cash in” on my efforts. I needed to pay rent the next day. My friend, and co-founder, Anders Lundin, heard the song, he liked it, and also believed that this song would generate a decent amount of revenue. We decided to make a deal, right then and there. Anders bought shares in my song, I paid my rent, and now, we share the revenue. We stayed up all night for the following weeks, asking ourselves, why we couldn’t build a web-service that would facilitate this sort of transaction on a larger scale.
-Give me your elevator pitch on why TuneRights works for the industry.
The music industry has been trading shares in music since the conception of ownership. A neutral and on-line solution is long over-due.
-Are you funded? If not, are you currently looking for funding?
No, we’re not funded – we’ve been buying our own rice and beans these past years. Now that we have developed sufficiently we are looking for the right funding partners.
-Are there any other sites out there like yours? How do you find yours different or superior to theirs?
We are often compared to crowd-funding sites. We would like to capture the spirit of sharing and support that the “crowd-funding” movement evokes. However, there are some key differences. The crowd-funding model is great for funding a future recording. As I mentioned, TuneRights is used for dividing and trading revenue streams of existing intellectual property. TuneRights does not allow users to sell shares of a song-to-be. As a result, there are no lower limits to how much money must be raised. If one person wants to give an artist $5 as a show of support or faith, TuneRights can make that happen. Also, a copyright owner is free to do what they wish with the money that they received from selling shares. Naturally, artists who use the money they receive to promote their songs will, in the long run, earn more revenue, and attract more support.
-What are the top 3 benefits for fans?
1) Put your money where your mouth is and affect an artist’s career.
2) Spot trends, make money.
3) Feeling guilty about stealing music? Support creators directly.
-What are the top 3 benefits for musicians?
1) Manage revenue payments with your co-writers and production team.
2) Sell shares, convert your creativity into cash.
3) Connect with your fans, and create a dedicated street team.
-If you’re comfortable telling me, how do you plan on monetizing these services?
We take small fees for all transactions that occur. We are developing a diverse range of monetization strategies, however none of these shall compromise our neutrality and transparency.
We are working with partners to create a seamless cash flow between sales and licensing channels and the TuneRights revenue distribution service, thus protecting fans, and decreasing the likelihood of “Hollywood Accounting”. Also, we are currently in discussions with a variety of promotion services. It is important that artists who receive cash can re-invest that money in promotion and wider distribution.
When I sat down to chat with via Skype, the first question on my mind was how the hell he got from Canada to Sweden. As expected, it was pretty complicated: “I’m from Ontario. I came to Sweden as an exchange student during High School, I was 15….[but] I’m also an American citizen. My dad is from Illinois”
Ray has built a home for himself in Sweden as well as a been a part of the growing community of music technologists including SoundCloud (who just hit 1M users), CitySounds, and SongBox. More importantly, the Swedish government, due to their higher taxes and Socialist mentality, has given TuneRights a large chunk of start up money, which he refers to as a “forgivable loan”, in that if you can pay it, you pay it, but if your business fails, you don’t owe anything. This has allowed him to not have to worry about a day job and focus on his passion. Isn’t that the dream of every entrepreneur…especially a first time entrepreneur like Ray???
But that’s not to say that money won’t run out. He most certainly has plans to head to the US within the next 6 months to hit the VC circuit. In addition, Ray has been accepted to SeedCamp Copenhagen on May 27th, which he says is an EU version of YCombinator.
After all this talk of how he plans to raise money, I got curious about how the business itself will pay the bills when the VC cash flow runs dry. “Every time a ‘lot’ of shares is transferred, we take a fee,” which I sort of rationalized as being similar to convenience fee on concert tickets. However, instead of a $9 fee on a $20 ticket, Ray is a lot more reasonable taking a fee between 25¢-$1.25 depending on the total investment.
However, the one downfall (for the time being) is that there’s no accountability that the artist will pay the investor. “We provide contracts between ’supporter/investor’ and artist, but these contracts are only as good as the people who make them, and the law that supports them…until… all revenue is going through our system…” So my suggestion to him was to act as a neutral distribution service (think Tunecore with no agenda) for all the music, so he can account for every dollar earned on each song, ensure that the investor is paid, and maybe take another fee. Ray most certainly agreed and responded by saying, “you are really getting all of the key issues.”
If you like music and enjoy playing around on the stock market, it’s worth looking into. It could be fun since you’re helping someone create art like a modern day benefactor, BUT you could get paid as well, which is always pleasant. Go to the site, poke around, and hopefully you’ll sign up. Ray has got a lot of solid ideas that he’s developing, so stay tuned for sure.
