On this episode Nick sits down with Peter Sinclair, a "growth-focused entrepreneur" who is the co-founder and CEO of beatBread, a start-up company helping independent artists secure funding as an alternative to traditional record label deals.

After graduating from Harvard Law School, Peter embarked on a business career journey that ultimately saw him become SVP of e-commerce at
Universal Music Group. He co-founded beatBread in 2020 and steered it through a seed round that raised 34 million USD. His company has partnered with over a dozen of the world's largest distributors and beatBread's unique AI technology for automated advances has paved the way for artists and labels to obtain funding without relinquishing control over their music.

Join us for an hour-long discussion on advances, record label deals, music royalties and much more.

NICK SADLER: Welcome to The Label Machine series, where we discuss with our guests how artists and record labels monetize music. Today's guest is Peter Sinclair.

Peter is the CEO of beatBread, which empowers indie artists by helping them secure funding as an alternative to traditional label deals. With an education from Harvard Law School, Peter's built up a wealth of experience and business development, marketing and financial projects across various companies, from startups to household names, most notably his time as SVP of Consumer and E-commerce at Universal Music Group.

Most recently he is co-founder and CEO of beatBread. He has steered the company through a 34 million USD seed round fund and has partnered up with over 15 distributors from around the globe using the company's chordCashAI technology to offer automated advances.

This man is making moves in the music industry. Peter, how are you?

PETER SINCLAIR: I'm very good. Thank you for having me.

NS: Awesome. So just before we jump in with, you know, sort of about your background, I did want to ask beatBread. Does the bread bit come from slang for “money”?

PS: Yes. Yes. So the the honest origin story of what we're called is, I knew we needed a memorable name because we're we're fighting for attention and we're just a little tiny part of the world. And I like the idea of alliteration. And I looked at every possible slang term, including some British ones. I learned the term Wonga. I think it's a British term.

And we could have just as easily be called, you know, “Dash Dough” or something like that or, you know, or something like that. So beatBread, rolled off the tongue and the URL was really cheap.

NS: That’s always a good one. And you're right, because “making bread,” it is a very British slang term. And we also I'm from New Zealand and we also use that as a slang because I guess we're a commonwealth, so we're sort of quite British, but I didn't know it was used in the US though. But yeah, I thought that might as much so.

PS: That word bread, bread is commonly understood to be money in the US and obviously beat is music, so that is, that is what we are. Money for music.

NS: Money for music. All right. So yeah, Do you want to give us a brief rundown of how you got started? I guess a bit of a bit of background, but then, you know how you transitioned into working more in the music business.

PS: Sure. So let me just really quickly. So we're a funding platform for independent artists, independent musicians, also independent labels and independent distributors. It's our direct-to-artist business is the easiest thing for people to understand, but we also fund independent labels and also help them fund their artists.

So how did I get started? So I am honestly an accidental participant in the music industry. I always loved music. I'm a George Clinton guy. I'm talking to you now from my house. But in my office down in downtown L.A., I've got a gigantic picture of George Clinton on my wall. But I never thought that I would work in entertainment.

I was working in startups across a whole bunch of different verticals, and life threw me a curveball. So my son has autism, and I came to a conclusion. I was working at a startup that was doing well, that I had to leave startup life because, you know, it was a little too chaotic and corporate life is less chaotic and out of the blue.

The same week that I decided I needed to leave startups, I got a call from a headhunter, and Universal Music was looking for someone to grow a division inside of that business. And one of the job requirements is that you had never worked in music before. They actually wanted someone (who was) an outsider. And so I walked into Universal Music in 2015, and global streaming revenues were less than $1,000,000,000. And my business actually had nothing to do with streaming and nothing to do what I'm doing now. But I observed how many artists had their own teams, they had their own digital marketing team, they had their radio team, they had their own merch company, and there's a lot of fighting about who would get to serve the artist, which was very silly and very expensive for the artists.

And it seemed to me not every artist, and I'm not one who thinks that major labels don't add value. But for some artists, if they just needed a check and they can assemble their own team, maybe there's an interesting opportunity there. And so that's actually how the idea started. And obviously in the independent sector, our value proposition of unbundled finance for someone who can put together a team around themselves is resonating pretty well.

So that's the accidental history of how it all got started.

NS: What's interesting is you said I need to leave startups and then you ended up starting up your own startup.

PS: Well, yeah, yeah, No, for sure. Well, I mean, listen, life. Life's not a straight line with an autistic child. I have to, but. But only one who has autism. But, you know, life's a little more calm at home, and I've always wanted to be a startup guy. It's just at that moment in my life, I needed to focus more time on the home front. And that's what led me out. And then back to the start. Yeah.

NS: When they say you get dragged kicking in stream, screaming into your destiny. You can’t help it I think sometimes. So what are you like at beatBread? What are your main like what's the rundown of your kind of main activities, like your daily activities there? Personally?

PS: Yeah. So fundamentally we're doing deals with artists, so we do more than a single advance every single day. We've automated that process so that an artist can type in their name on our website or a website that we run for an independent label and we pull down a bunch of data and all that's done automatically the artists can tune their own deal from one year to eight years.

We never take ownership. We also advance unreleased projects. A lot of people think that because we're data driven, you can't funding music, but we do fund music too. In addition to catalog. So I'll be approving deals, mostly things that have been automated from our system anyway. But we need one last set of human eyes and there's a team that spends about 15 minutes on each deal making sure the machine ran correctly, and then I will look at it for 3 minutes and approve a deal that's first priority every day is to make sure that we're approving deals and then as soon as we're set up that I'm wiring money out to the artists, that we get them their money quickly.

Other than that, it's really working on the business. I'm working with new independent labels and distributors who want to use our service even under their own brand and securing more capital for us to give the artists you mentioned the $34 million. We don't have anything to announce today, but I'm hopeful and I'll give you a call when it's ready that that number will be a lot larger that we can talk about publicly very soon.

Yeah. So it's really just getting deals done, making sure we have money for artists and working with more partners who really serve artists well.

NS: The life of a CEO of a growing company. So I you know, before we met, I went on to the beatBread site and I went through the process and I'm going to say for everyone listening, it was super, super easy and under 4 minutes. So I don't know, I guess your team are live now or maybe you can talk through the process a little bit more but I went on… So I manage an artist called Siren and she is, you know, she hasn't even done a million streams yet for your idea of like kind of size. She's had five tracks out, you know, She's doing well, definitely. But, you know, like, I guess for people that are listening, you know, you don't have to think I'm doing like millions of streams to get these advances.

Very quickly, put the numbers in. I'd said confirm a couple of bits, and then it said, hey, we're ready for an initial funding estimate, which was $20,000, $20,000 and three, how do you say 20, $20,000 and 300? My goodness.

PS: I say about 20,000.

NS: I'm struggling to say a very easy number. So no. Yeah, yeah, 20,300. So which was amazing. And I was like, hey, that's, that's not to be sniffed at, at all. And it was, yeah, it was super easy. No I can see there that you have to upload reports and obviously verify, you have to verify the data because you know, people could be I guess gamifying it or something like that but incredible, like it's really amazing.

So I guess yeah, win-win. I go through this first process when it goes like yeah, when it goes to continue to upload reports, what's that kind of turn around and what are you looking for.

PS: Yeah. So you can just drag and drop the reports and we've mapped all the major distributors. I don't mean owned by majors, we've mapped those too. We've also mapped the, you know, Distrokid’s, CDbaby’s, the Tunecore’s, the AWAL’s. I think there's 30 or 40 different choices. And if it's other, you can select the machinery of those just to confirm that the tracks that you on the prior pages said could be included in the deal, you can adjust, those are in fact controlled by you that the revenue assumptions that we made in the first estimates per track are accurate and that process for you should take 5 to 6 minutes.

We then take about 24 hours. Those reports run through our system again and then you'll get an email from us. And that same experience where you saw that estimate will now bet rather than be an estimate will be a confirmed offer.

And then you can adjust actually, I don't need this money, so I only want this three year deal to be a one year deal. And you guys are asking for ten of my new songs. I don't want to give you any of them. You can dial that down. That will change the number, but it will reduce your payments.

Or if you need more money, you can go all the way up to eight years and you can go up to ten tracks. In a ten track option. You can also choose flow through. If you want us to pay through money to you even before you paid off your advance, that's also an option. So we tried to create, take a record deal, kick out the concept of forever ownership and then abstract it down to its variables and then let the artist adjust them.

“This is the amount of time off. And for these are the tracks, but not these tracks. I want to place. Yeah, this is how much income I want.” And as you move those dials, you can see how it impacts the dollar amounts that we can give you.

NS: So for anyone that's listening. I literally did just do that. So originally for that, 20,000 was a catalog, plus it was five new songs and five options, right? So about ten new songs. So I dropped it down to catalog only. So saying nothing in advance just today, walk away with an advance. It just dropped down to 16 grand. Like I thought it was going to drop a lot more.

So it's still like just today, even if we did nothing else with you and took our music elsewhere from today, that's still like a great amount of money and the link to contracts. Three years. So yeah.

PS: So now I wouldn't say I would say how that changes is unique to each artist. You know, in your case, it sounds like for five tracks it's about $4,000. Is the Delta there? Sometimes an artist, one from a catalog to five new tracks or advance with more than double. Sometimes it will go up less than what you just said.

Everything you do is unique. Most of our company are data scientists. We have 21 employees and 12 of them work in data science and tech. And so we're really invested that. So every everything is unique and what happens when you add or subtract tracks, what happens when you go from one to 2 to 3 years? All of those ratios are very unique and bespoke.

NS: Gotcha, so I got people kind of go, “Oh great, I've got five tracks. That means I'm going to get 20 grand when I sign up.” It's like, it's unique for everybody. Gotcha. Okay. So it's like a disclosure. A note of disclosure is that.

PS: Yeah, just it just, just, just just, you know, every artist is unique and we try and make an estimate that that is unique to what we think the future revenues will be. And the other important thing is you retain ownership of your music and if you recoup early before the term, you're going to get paid bulk of the money.

It depends upon the length of the deal how much of money we would keep if you recoup early, but it would only be for a fixed amount of time and it will always be more than 50% that the artist keeps after recoupment until the end of the term. At which they get 100%. And in some cases it's 80 or 90% that the artists will keep if they recoup early.

NS: Yeah, I think it is 82% of recoup daily. So it's good to recoup. Like I'm just going to get into some nuts and bolts very quickly. So it's got recoupment rates 67%, so that means for every dollar that comes in, $0.67 goes towards the recouping the advance. That's correct. And then the other 23%, 23, 33, 33%.

PS: It goes to us effectively. So basically the $0.67 is paying off the advance to recoup our our capital. And then that is effectively the risk that we're taking. Not every deal pans out for us know, taking a risk for years, it streams don't drop. And also to pay, you know, capital budget.

NS: So it's like a, it's like a 30-70 deal like that. Because that 30% goes towards you guys and that the other is effectively the 70% goes to the artist, it's just but it's going back to pay their advancement and then like you said, if it goes before that three years it drops to 20%.

I mean that is pretty incredible because I know distributors out there who are charging artists doing 20, 30% deals and that's like that's just no advance. It's just like that's what we're taking from you to use our distribution services, you know, and this is for, you know, this is admittedly for smaller, for smaller artists because I guess is a big risk.

It's I think it does come down a bit if you're more established and you've got a catalog, but I mean, that's not a silly rate really to be getting money up front as well. Yeah, I mean, honestly, it's, it's, it's totally amazing what you're doing. Like I don't say that to many people like this is really revolutionary in the music industry and like I love it that you are down you'll sit between as at Spotify and and who's the other, is it Sony?

PS: And Warner.

NS: And Warner. Yeah. I mean, like that just really shows how you are really going to be part of the future of the music industry. So I guess my next thing is, you know, so this is all this is awesome for artists. And if any of us is listening, just, you know, go to beatBread.com and just spend 5 minutes and see what numbers you get. It's like it costs you nothing, right? It's free. And it's worth knowing that that's in your back pocket potentially.

What about for independent labels? So I guess, I guess my question is, you know, what would be what would you say a strategy is for smaller and indie labels looking to use your platform? And could you see, you know, is there a way that labels could actually sign artists by researching those beforehand and saying, “Look, work with us and we'll use this platform in advance stuff and then we'll use that money to, to do this?”

PS: Yeah, there's a couple of different ways. So first of all, you know, our belief is that, you know, service providers are essential, independent labels are essential. And frankly, we're working on some analysis that to show just how often independent labels add value sort of in excess of maybe some of the majors to an artist's career.

The issue is that independent labels don't always have the capital they need. They have the right fit with the artists, the right passion for the artist. So our product can be used currently in two ways and work in a third way by independent labels and people who help artists advance their careers.

The first way is everything that anyone who happens to be listening to this, goes to beatBread and has that experience, that exact experience can be replicated for you under your brand name. The website and have your brand words that will be put on for you. You have the same sliders, the same report upload, your logo, etc. The contract will not be in beatBread's name, but we will run the whole process with due diligence. We will provide the capital or you can provide the capital if you're not short on capital, but you just need someone to do advances efficiently and accurately. And that sort of use case one we call that our white label product. And so if I'm an independent label and I want to add this and offer services and advances, it's a way for me to do that effectively with artists without putting up my money, or putting up my own money but knowing that someone is going to help me make the right decision about what what makes sense.

The second way is, you know, labels may take, you know, independent labels may take a small ownership stake in the artist because they're investing so much time and energy in them. If a label signs an artist and has an ownership position in some of even some of the music, we can give an advance to the label based on the share of the deal that they own.

And they can use that money to advance the artists or to sign new artists, right? And so we can do that on a single artist level. Or we also do multi artist deals for labels. So we've had several independent labels come to us. They have a catalog. It's generating X thousand dollars a month and they want to pull some of that money forward and go sign some other great artists that they believe in, that they know they can serve, but they can't compete with a major for, say, for a checkbook. So we do these label deals all the time to help independent labels compete effectively, right? And so it's the same technology, it's the same data science. The setup is very similar, but that's another way that independent labels can use our product.

NS: So you effectively, I mean, we do, you know, my indie labels, we do 50/50 deals with all the artists. That's a very common thing with indies. What you're saying is like across your 20 artists that you have signed, that you've got a 50/50 deal with, we'll just look at that 50% revenue instead and then we'll do our calculations and offer you something?

PS: Correct.

NS: Gotcha.

PS: Yeah. And then thirdly, we just announced, I think it was last week - in startup life, time sometimes collapses and it's crazy - very recently something called a beatBread investor network. And so everything we do is data driven, but we know that there are some artists who may not have a huge back catalog, right? Even if we're advancing new stuff, you know, it's helpful to have some catalog there.

But if they have a great independent label behind them, a great story, maybe they have a huge star who also believes them and is going to be a collaborator on two of their next ten tracks, we have people in our network who will look at our algorithm, but are willing to go beyond our algorithm so and pay even more for the advance.

So for independent labels who are truly developing artists who may have potential far beyond their current income, we're evolving our product that's not available to everyone who comes to our site, but it's something that we're doing now actively. A couple deals every week where for certain artists, what you see on the site may only be the beginning of the story. There may be more, more out there with a different route for investors.

NS: Gotcha. So that's like I guess they're using you as a way of very like streamlining the investment experience. You're giving them the toolset to say, look, if you want to back these guys and you say, “Yeah, we want, you know, it's higher risk. So our rate of return is less, but we are willing to put like a hundred grand into it.” And here it is, all contracts all automatically down and everyone can see it. And then it's kind of easily done. Is that the idea behind that?

PS: That's right. And it's not a crowdfunding platform, it's not a fan-funding platform, the investor side is not open to the public. But the idea is, investors believe in our data driven approach and we can show them these scenarios, right? Hey, maybe you're going to lose money on this artist 50% of the time, but 20% of the time, this artist is going to blow up.

And by the way, this is the independent label and the manager involved. And this is their plan, right? The qualitative stuff that our algorithm can't capture right now, right? That is something that once again, that our core product offers a utility for a lot of artists to get some working capital and advance their career. And we do, as I said, more than one of those a day, by the way, up to, up to $1,000,000.

We'll do a deal for $1,000. We'll do a deal for actually up to $2 million. But we also know that the potential of an artist cannot always be captured by music. We don't think that we're the one tool that's all that solves every problem. But we do think that what are the tools we have in data science can be applied and we have investors who have an appetite to use them to then bid beyond our algorithm.

NS: Hmm. Interesting. So I was going to ask you a question. What's the number one thing that hold back artist growing their career? But I think we'd both agree that it would be money, because, you know, I know as well, like, you know, it's not the easiest, but, you know, you can get a good team around you and you can do a lot of your stuff, a lot of stuff yourself these days, you don't really need a label, but it's the biggest thing when I speak to my members, you know, they want to grow their audience and they want to monetize their music as quickly as possible. And I always say, “Great, well, you need to invest money. You need to invest in yourself to grow yourself.” And then they're like, “But I don't have the money to do it.”

Hence why I want to try and get out a major record label deal to get some sort of advance so I can do it. And they're sort of stuck in this place. So you know, again, like, you know, this is just such a great solution as well because I think as well, like it really fits in that place where you can say, look, go and start putting your music out on TuneCore or Distrokid, right?

Put it out there. Show that you can build a following. Right? And then we can advance you like just as a major label would do. But, you know, you don't have to go any meetings. You can just literally go to a website and enter stuff like which is, you know, which is great. It's just gives so much more control and an easy path for artists, you know, to make their money from, you know, make five grand a month which, which when I've surveyed most artists, that is that's all they're aiming for to start off with. If they can make five grand a month of their music, they’ll be happy, they can get a mortgage, they can live a life, they can support their family.

And that's not a crazy amount of money as well. You know something where, you know, something we tried to make at The Label Machine, that's what we're aiming all our members to get to. So would you say that streaming and the, you know, the growth of streaming in the last ten years has enabled companies like yourself to offer services, services like these that benefit artists?

PS: Absolutely. I mean, we wouldn't exist if it was still, you know, the physical music industry, right? Streaming has created a world in which, as you said just recently, you know, major labels may add value, but they're not the indispensable partner. Right. And you don't need a major label for distribution. You don't need to manufacture the product, and it's no longer the case that you have to be on the radio to make very material out of money on streaming.

So we actually do this analysis a couple of times a year. The number of artists who make at least $50,000 on their streaming music around the world and the number of artists who made $50,000 a year on the recorded music in the physical format age was pretty constantly about 5,000 artists globally. That number is now bumping up against 40,000. A year ago is 30,000, and soon to be 100,000. So the number is now 40,000.

NS: Is that 40,000? Sorry, on the streaming side or the physical side are you referring to.

PS: I'm saying on the streaming side. But there are 40,000 individuals around the world who look just on the recorded music - primarily streaming - are making about $50,000 a year or more. And so streaming has created a world where it's a lot like television, depending upon where your listeners are sitting here in the United States. It used to be the three major networks and TBS, right when I was growing up. Those were the channels, we didn't have cable TV where I grew up, and cable TV wasn't even actually a thing. I'm not, I'm not a 20 year old startup CEO, so… but then cable happened, and now with those other thousands of channels on my, on my television and what I watch, there's someone who's making a living doing that television show.

And even inside my own household, my wife doesn't know any of the people on that show because she watches a different set of channels. But there's all these little economically thriving niches that are now possible in the streaming world in a way that just wasn't possible even seven or eight years ago. So there's no question that streaming makes our business possible, and there's no way that without it, it would be a couple of giant companies who have the capital, who have the unique access to distribution and who have the unique relationships with radio, and that, that was the way it went.

But now there are no longer a fixed number of slots and there's ways to promote yourself with digital marketing where you don't need to be able to do that.

NS: Yeah, I mean, that's the thing is this is actually a little bit of a nail in the coffin for majors because it's really the only thing why people would go to majors, is because they're going to advance money. And these necessarily can't do that or the individual artist can't. Yeah, they've got big teams. But like, you know, there's enough service companies out there that you can hire team, type team member for everything out there. And if you get an advance, you've got the money to hire everybody. Like, yeah it's, it's, yeah, it's incredible.

PS: I mean I think I think I think that the old what's so current, but the dying major label deal is dying. I'm not sure that the majors themselves die but they, they're going to have to adapt. Right? And they're going to compete on the base, their services with smaller, nimbler, in many cases better management and independent label teams on the quality of their service because capital is no longer their monopoly.

NS: Well, I think as well it's I it's that I can't remember the stat was like ten years ago but it was you know, they only expected one out of 20 artists that they signed to crack and break and make them a million. And the other 19 don't really make it. And, you know, I think that's what fueled, you know, these artists that are trapped in these deals. And I hate majors and all that kind of stuff, which I think is less so these days.

But I think those 19 artists that didn't crack it, you know, are now just working independently and being able to get a piece of that smaller pie. So, yeah, I think I think you're right. Majors are always going to be there. You know, it's just the artists aren’t going to be screwed over as much, which is great for everybody.

"this is actually a little bit of a nail in the coffin for majors because it's really the only thing why people would go to majors, is because they're going to advance money... they're going to have to adapt."

PS: Yeah, I think that's right. I think that's right. And I think it's also, you know, those same dynamics that make what we do possible. It did used to be sort of an all-or-nothing game, right? There are only those 5000 people could make money on the recorded music each year. Now, you know if you're an artist and you want to have a number one hit and that's your dream, then go for it. But you don't have to even touch a chart to make crazy money.

I mean, on our team, our, our interests in music span the spectrum, right? What I like and what my co-founder likes is not what our different data analyst likes or our head of artists marketing likes. And every day we'll see an artist who comes on our platform who's making thousands and thousands of dollars a month, who no one has ever heard of anywhere on our team, right? And so, it's sort of beautiful, right, that there's all these little thriving niches and, you know, you don't need to you don't need to be on billboards to to make a living.

NS: Not at all. We live in a global village. You know, that's the way I look at it now. And so you can have you know, you can you can exist. Yeah, you can have a thriving niche music because you're connected to everybody all around the globe. And yeah, I totally see that as the future and likewise, I agree, you know, I mean, I've worked in independent music my whole life and so many of the artists that, you know, make thousands of dollars a month that I've worked with and growing into their careers and they're going on tours. You know, I'd say them to my friends, you know, and I did a lot of stuff in kind of dance music and even friends that were into dance music, they went into the particular genre style of dance music, just never heard of them. They're like, “Oh, I've never heard of them.” Like, yeah, guys killing it, porterhouse. Like, you know, they're like, “Wow, never heard of them.”

And, you know, I think that's sort of been going on for a while, I guess as well. Would you say, you know, with the streaming stuff and I think this is what to be honest, I think why Spotify has done so well for artists is that they did they put your streaming numbers and followers like social media accounts, right?

Whereas beforehand, you know, you couldn't see what you know, you couldn't see what's going on. But with the behind closed doors and the accountancy, I guess, was, you know, it wasn't transparent. Right? You couldn't, you couldn't have done this…

PS: Accounting with major labels are still not transparent. Yeah, we, we've gotten some people out of major label deals with our funding. And I'll tell you that accounting is still not transparent. But anyway, sorry.

NS: No, no. No, I agree. I agree. Major labels aren't transparent. But, you know, I think with at least with Spotify, it is a little more transparent and it's becoming, it's becoming better as well. Like, I don't know if you have spoken to Andrew at… I just forgot the name. Dapp. Beatdapp… Andrew Batey.

PS: So we've definitely traded notes, I think Matthew on my team who speaks a lot to different folks the industry may have, but I think maybe we traded e-mails. I haven't been talked to them recently.

NS: Yeah, Beatdapp. So yeah, they basically what they're doing is just checking that all the streaming, streams on Spotify are actually legit, which is which is beneficial for everybody. I mean, you know, just makes what you're doing as well. You know, I guess it helps out with all those kind of advances. Yeah. So can you, can you tell us about any artist or labels, you know, that you've been able to sign or a particular label you’re most proud of? You know that you were able to offer a huge advance and it's kind of been a game changer or a life changer for them?

PS: Yeah. So, I mean, I think there's… I tell two stories of artists that are at the opposite end of the spectrum, and I both find them very inspiring in their own way. So I'm going to start with the big one. I'm going to end with a small one. So, Elley Duhé was signed to Sony. She's done some stuff with Warner. She's always wanted to stay independent, but at different times to advance her career she's done some more limited deals with major labels. One of her deals was with Sony and it became a global top ten hit called “Middle of the Night.” Streams, you know, several million streams a day. Still, she has some other songs with them and she just wasn't getting the support she needed from the major label.

And we were able to work out a deal with her and with Sony to basically buy her out of that deal and regain her independence, sort of set her free. And her team is now working on their next project in a way that they would not have been able to do had they stayed sort of stuck in that situation.

So we were able to sort of set someone who had, quote unquote, “made it” free to sort of continue to do what they do. That was a seven-figure deal. We get to run a press release to sort of tell the world that, you know, we'll do big deals. That's good for us. But, you know, just on an artist level, it's sort of inspiring on the other end.

NS: Yeah, I was just going to say, well, congratulations on that. And also that's inspiring to know that yeah, artists can I mean, I guess that majors are happy to if, if there is the opportunity and deal there, to let somebody go out and go “fair enough, like we're not going to clip your wings, go and do your thing.” We can do a deal with these guys and make it happen like that. That's amazing. That's incredible.

PS: Yeah. On the other end, I will email you after. If the artist agrees, we actually ask the artists if they'll let us use their name in marketing. And I'm not. I'm going to be very careful about this. I don't know whether we have or not. I'll email you afterwards if we can. There's an artist who lives in Montana or lived in Montana, 19 years old, very small stream profile, went to our site and didn't qualify for more than $3500 for an advance, but took the advance, took a bet on himself and moved to Nashville.

And this person did not come from family wealth and literally could not have afforded to travel to Nashville, you know, put down a deposit on an apartment and just start their quest to make a career in music in Nashville. And honestly, that I find more inspiring than the Elley story. It doesn't affect our bottom line as much, but that's fundamentally what we're trying to do, is empower artists to make their way in the music industry.

And so and by that, artists’ streaming is performing much better than when they signed with us. We can’t take credit for that. All we did was write a check and get out of the way. But I will, I will send you the name after the fact. But that's that's a story that I particularly love about how our advances were used.

NS: Oh, it's amazing. I mean, I can, you know, Siren, who I managed, she came through the label machine system, right, in the last couple of years.

You know, I mean, I just looked at this and if I speak to her, but if she goes ahead, you know, it's just, it's an amazing story that I can then tell other members and be like, look, if you come in work with us and do this, in two years, you can get an advance of 20 grand, you know, like what could you do with 20 grand? You know, like go do a decent music video and stuff like that. It's incredible.

PS: And by the way, there's plenty of stories in the middle. Like we've had artists who had a major label off urge to turn them down, who took our money on a short-term deal, literally tripled their value and then decided to go sign a major label deal. But by the way, for a lot more money and with an out, right artist named Giovanni and the Hired Guns, Tex-Mex band had plenty of label offers, took a deal from us and then got a much bigger number a year later and from the majors. But also and you know, I can't disclose all the terms but in a way that wasn't lock them up for life. So we find that inspiring.

And then we've had people that plan to do that. But then actually at the end of it say, “Wait, why do I need a major anyway? Why don't I just take another advance from you?” So yeah, there's a lot of stories like that.

NS: So what strategies would you say... I guess what, what would you say would be good for not just smaller labels, but also artists that want to use your platform. Like, have you got some like, tips and tricks I guess, and you know, nothing too shady but to like, I guess, maximize what that advance might be. Or let's say they're like in six months we want to use your service. What, what should I do to maximize?

PS: Fundamentally, and there's lots that goes into our model, but fundamentally what our base advanced product is looking for is what do we think your current streaming behavior is going to look like over the next one, two and three years? Is it going to grow? Is it going to be stable? Is it going to slightly go down or is it going to drop off the face of the earth?

The first any for those first three is a good thing and we can advance against that. It's just that we need to we're making a prediction about whether it will drop down. So, the way you do that is you build a fan base of people who have some connection to your music, right? So we'll advance money to someone who has lots of streams consistently and they're on playlists, but it's mostly playlist driven.

But we're going advanced more money to someone who has a same number of streams, but it's not all from paid playlists. Their fans are passionate. It's better to have a million screens from 100,000 fans than a million streams from 500,000 fans, right?

NS: Yeah, Yeah, right. Even Kelly, 1000. 1000 true fans.

PS: Yeah, exactly. So those fans are stickier. Yeah. Not only is it more likely to lead to stability, it actually is more predictive of growth even on your back catalog, if you have committed fans.

NS: And how you look, how you how are you analyzing that? Are you just looking at if someone's got loads of followers, not necessarily streams or like, how are you looking outside, say, Spotify?

PS: Yeah, so we have connections into more than just Spotify. We have APIs for those who are technical into various charting services, various streaming services, various social aggregators. We also look at social metrics for an artist. So just like it's better to have a million streams for 100,000 people are the 500,000 people. It's better to have a Twitter, Facebook, Instagram, following, YouTube, following that is actively engaging with you, right?

NS: You've got 2000 people on Instagram, but every time you post something, you get 900 comments. Rather than having 100,000 and you get 20,000.

PS: No comments, no comments on YouTube, things like that make a difference. So there's other factors too, but it's sort of just, broadly speaking, a large fan base and an engaged fan base, right? That's that. That's sort of and that's, that's how you build a career, whether or not you get to take an advance from us or not.

And then we're also looking at your trajectory. And then if we're going to advance against new music that you haven't released yet, we're looking at what we think that's going to be and that's going to be a lot of the artist metrics, similar but used in a different way. We also scrape the web for press mentions from certain publications and sort of use natural language to read some of those.

There's lots of other things. But at its core, a fan base that is dedicated to you and is engaged with you is sort of ultimately how you build value that we can advance against. And even if you look at our number and say, “Screw that, I think I'm worth more,” which is okay, you're going to have real value behind your career and your fan base.

NS: Yeah, amazing. Now, I, I know you talked about on one of your articles as well about artists having successfully grown their fan base with lots of hard work there and marketing efforts and teams. They now signed a deal with a distributor, a shell label who takes a large share 30 or 50% of the assets and locks them into that a distribution or marketing agreement. So what can you describe what you mean by like a shell label?

PS: I mean…

NS: More context around that?

PS: Yeah, I mean, it's sort of like you know it when you see it. I'm not one who doesn't think that a manager or a label who adds value and does work doesn't deserve to be paid, right? They do. And in some cases they even own a share. They deserve a share of ownership of their artists music over time.

So I'm not saying artists should always own 100%, you need a team around you, all those things. But there are people out there and distributors out there who will take 20, 30, 50% of the revenue. They'll lock the artist into a deal for numerous years and then they don't provide any value. Right? And, you know, if you're, if you're an artist and you're signing a distribution deal and the fee is 20 or 30%, you really have to believe that they're going to actually playlist you and actually promote you and all those things.

And I would suggest, and I'm not an artist manager, so take this with a grain of salt. If you're not already having a lot of momentum, a lot of those promises are often false, right? So you might want to sign a deal as an artist. Maybe you can give over the 20 or 30%, but get yourself an out in three or six months.

What's tragic to me is when I see someone sign over 30 to 50% of their income, the person they signed it out to isn't doing any work, and then they just gut it out as they’re stuck and they're giving away almost half their money to someone who's just freeriding, who just was

And, you know, music more than any industry. I've worked a lot of industries, has a lot of charismatic people who are all sizzle and no steak. And, you know, it's just, it's the one sad thing I see a couple of times every week. Right? I think you see a lot of inspiring stories of independent artists developing. But then it's tragic when you see that.

NS: Would you remember any particular genres that you see that more of, and countries?

PS: I don't know. I'm not I'm not trying to dodge a question. I don't know whether it's more common in some genres than other. To be totally honest.

NS: I feel you get more that and EDM and hip hop. I don't know why, I just get a kind of feeling and especially those that are based in the US. Just for my, I don't see that. I think I don't know what it is about being British or UK or something. It seems to be less kind of people are just a bit more straight up, like they see something good. Let's work together, if not like let's do better things at that time. But I do get that feeling in America as well. There's people like that make all these promises and you know, I've started a production-label-management-merch company thing, “Sign with me, I'm going to make you a millionaire,” you know, and yeah, and then it's, I think that's what you mean by like that kind of shell deal or middle man.

PS: Yeah.

NS: Yeah. So I, you know, what's another question I want to ask you now. I know you're, I know you've only been in the music industry for a while, but I think it's long enough to ask this question. What are some rookie mistakes or common problems that you see over and over again for early career artists being, you know, first of all.

Exactly the one that we just talked about? Is there anything else that you're you sort of see that people should be aware of and try and avoid?

PS: Yeah, I mean, I think I think that's one of them. I think chasing streams rather than where other than, you know, developing bands, you know, there's lots of companies out there that will promise you a certain number of streams. And you know, often there's some bots behind the scenes or maybe there's not bots behind the scenes, but, you know, getting a big play count because you're on a playlist, but your fans aren't actually saving that through their own library and actually aren’t developing a relationship with that song and with you is sort of like junk food, right?

So I would say, you know, focus on fans and the streams will follow and the money will follow. You focus on streams and a quick hit. It can go away just as fast as it grew.

NS: Yeah, I mean, I agree. I completely struggle with this, with the artists I deal with. I'm like, you're better off focusing on getting the email address and trying to get them like buy some low-cost merch. So they're like, hooked into your, you know, into your world and not worry about these Spotify streams. And they're like, “No, I just I want to invest my money in getting more Spotify streams!” and it's really strong. It's a real struggle. And again, maybe it's because it's like that same thing where because you can see the numbers, it's like that vanity thing that people want to have really large numbers on Instagram.

PS: Yeah, and to be clear, like promoting yourself on the streaming platforms, if those people a significant subset of the people who you're promoting to end up then developing a durable relationship with the song or with you or ideally both, then that's a good thing. But if you're getting a big stream count, but those people aren't converting into fans of you in the song, you know, it's water through a sieve.

NS: So have you have you have you seen any like cool strategies of where artists or their or their team are? How they're transitioning, people that are like discovering them on Spotify? Maybe they've gotten to a great, you know, like a discovery Spotify playlist or something, and how are they taking them, you know, I guess through the funnel from Spotify to being a real fan, you know, like, let's say a real fan, meaning they've got an email address and they've handed over some hard cash directly to the artist.

PS: Yeah. I mean, I so I did a lot of this outside of the music industry before I went to music. And then in my time at Universal, a lot of thinking about sort of how you build a direct relationship with a fan. I would there are a lot of great companies who can help you develop that fanbase and develop those, you know, communication tactics and fan engagement tactics.

To be totally honest, I've been so heads down on this thing. We've been public for two years and I've worked on it sort of a year before then nights and weekends. I don't know who the best players out there are, but I know there are a lot of great ones. But definitely I think investing in those tactics as a developing artist or frankly, even if you're already a superstar, is money well spent. Yeah.

NS: So when you I mean, you're like you said, you probably can't name companies because you can't remember. But like what you know, for anyone who's listening is going, “Oh, that sounds amazing. Like, what am I Googling to kind of what am I looking for? To find those types of companies?”

PS: Yeah, I mean, I think it's there's artist services companies out there. I think we actually run a white label for a company called Soundplate that I think matches artists with different service providers. I think there's some great ones, not that they provide those services themselves, but they can help people find them.

I think text is, you know, not only collecting email addresses but collecting text relationships is really important. And I think there are a number of companies that will help you cultivate that fan base.

NS: You mean getting phone numbers? Yes, I am big- We're about to launch a marketing app that does exactly that. Yeah, I think it's where things are moving further than email.

PS: Every time, I mean, when you say it and you just think about your own behavior, it totally makes sense. But you know, sometimes. So I obviously missed them. Whenever we, we tested text in Universal or when I worked, before I was in the music industry, the response rates not just open rates, but people actually doing something from text is just an order of magnitude more than email.

And by the way, email is in order is one or two orders of magnitude like 100 acts more impactful than social. Right. And so the more you can develop those relationships, the better. Text is tricky because you have to be careful because there's the spam risk of email. You can just ignore an email. You can't just ignore a text. So you've got to be careful about how you use that relationship with a fan. But if done right, it can work extremely well.

"Focus on fans and the streams will follow and the money will follow. You focus on streams and a quick hit, It can go away just as fast as it grew."

NS: I get what you mean. Like if someone replies and goes, Yeah, sounds awesome. I'd love to hear your song and then they don't reply. You're like, So you mean you've got to have the infrastructure there to kind of back it up?

PS: In your own life, you think about someone texts you, if you better, they better want that text, right? If they don't, then you're going to be blocked or whatever. In a way that with email, you know, I can just ignore, I can ignore an email, right? You can be a little more aggressive in how you use it.

NS: I get what you mean. So if I'm going to give you my number. You got to be very explicit like, Hey, thanks very much, you know, not abuse it. But in saying that, every Monday. Well, not every Monday but every so every now and then I get Domino's Pizza text me and I'm like, What's Domino's Pizza? Texting me? And of course I open it up. If they emailed me, it would be on the spam folder. Most likely. You know, it's like, “oh, we've got a special it's only blah, blah, blah.” And I'm like, “Oh yeah, we haven't done the shopping and, you know, like one out of, like one out of ten times, it hits me and I'm like, okay, we’re getting Domino's tonight.”

So, you know, and I guess the thing is, you know, that's a, you know, a click-through for them. But not only that, I'm just reading it at least, you know. So I have to have to agree.

PS: I think I’m going to have pizza for lunch.

NS: Did you?

PS: No, no, I'm going to- You got into my brain now.

NS: I mean, I'm just trying to think of what else- I did want to ask you. That's right. Are you going to be looking at putting any of this on the blockchain or do you see any of the technology offered by blockchain, any blockchain technology helping out with what you're doing? What's your kind of thoughts on that?

PS: Yeah. So I believe in blockchain inside and outside the music industry. I believe that there's a lot of great applications for it. I think eventually a version of what we do will either be on the blockchain or compatible on blockchain by, by meaning we will work to do that. We're watching, we're making sure that what we do would be compatible for the future, but we're not actively building for the blockchain.

I mean, my take is there are companies that are trying to do royalty-based finance on the blockchain. I, I think that is a little problematic right now for a couple of reasons. One, it's illegal, you know, the large companies backed by major Silicon Valley firms that do this. I'm not going to state their names. I think people know by major artists that sense of security that they're selling and they see it as a utility. But the reality is, is it's actually cybersecurity’s laws. And there's good reason for those. I mean, not to get political on this, but, you know, unregulated financial products often lead to a disaster for investors. I just leave it at that, that story repeated itself in history again and again. The other reason has nothing to do with blockchain per say is all of those companies are fan base finance.

And I actually think it's a minority of artists that that make sense for, so as opposed to institutional investors or institutional funds because one: there's a lot of artists, if you're just putting your hand out for fans to finance you, not to sell them a product or an experience, but to finance you, it's just sort of an icky bad luck, right?

For some, for some genres and some artists, it's fine, right? But I'm going to use a deliberately dated reference because I don't want to talk about anyone right now. But if Pink Floyd, I know they're selling their catalog now and all those things, their fans went out when they were hot and said, Please give us some money, it would just it would totally ruin their relationship with the art. Right?

The other thing is a lot of artists who are well deserving of finance may not have a fan base that's either big enough or rich enough to give them the money they need. So I think that blockchain in the long run is going to make the accounting much more clear and transparent. I think that NFT’s, despite the ups and downs we've had in the bubble, giving superfans curated exclusive experiences as a product, you know, box-set 2.0 makes a ton of sense.

Blockchain-based finance, I think is a bridge too far for a bit. If that makes sense.

NS: No, I think that's a really good analysis of it. And I have to agree on on all your points, you know, because especially on the crowdfunding thing, it is just crowdfunding at the end of the day, it's like Kickstarter or something. Sure, it's on the blockchain, it's transparent, you have NFT’s, but it's not largely that different.

And, you know, I've forgotten the name of the, there was a British startup company that was, you know, like Kickstarter, but for musicians that folded, you know, it ended up gone bankrupt and it didn't work because I think you're exactly right. It's just not cool to go, “hey, crowdfund it,” like, you know, I mean, artists struggle to just try and be themselves and open the curtain behind the scene to have connection with their fans and those that can do it.

It does work well, but a lot of artists still don't do that because it's just… It ruins the mystique of like, you know, and the coolness around the music.

PS: And I mean, a lot goes into those offerings, right? And so if you have if you're successful enough and you think you're successful enough to engage enough fans to finance your tour or finance your next thing, if you did that, all that effort and you gave them awesome products like a) they would probably like you more and they and they wouldn't think, Oh, this is weird, but you wouldn't have to pledge any future royalties either.

Right? So, so I think engaging fans and superfan experiences makes sense fundraising for yourself. I think once again, for sure. Nas. That doesn't ruin his brand when he does that, right? I can think of artists where it doesn't, but I think in the vast majority of cases either you don't have the fan base or if you even if you do, you know, I'm not a Billie Eilish fan.

I think I'm current enough to know that would be sort of a weird luck for her to go in or hand out to her fans and saying, “Please, please give me money and I'll give you 6% of my next album.” It just, it's inauthentic and strange. I think.

NS: Well, I mean, you know, you know, to wrap up and go back to, you know, like speaking to in your company, you know, ideally, it's, you know, it's the smaller independent. So like, we need some money. So, you know, we need ten grand so we can record our next album and have a small fan base.

I mean even now today if SIREN, you know who I plugged into your system, who's like, you know, potentially could get 20k advance. She doesn't think and I don't think her fan base is big enough where if we did a Kickstarter campaign to go “I want to fund my next album” I don't think we would get that amount of money, it would largely be funded by friends and family. We might be able to get five grand and she would have to be like, “and you're getting a share of stuff.”

I mean, you know, and she's got to go out there and be that person putting her hands out saying, “Hey, can you please help me?” Which I know she definitely doesn't want to do like so, I mean, something like what you're doing just negates that. What's the point? Just, you know, put out some good music for a couple of years, build a fanbase.

PS: Go engage those fans. Just don't make it a fundraising exercise. Make it a, you know, here's a exclusive record of my mix with some great video or, you know, here's some great art that I created to go along with the song. If bands are that dedicated that they want to finance your career, they're going to want to do those other things. And they're gonna like the more.

NS: Yeah, yeah, I agree. Peter, it was amazing chatting to you.

PS: Thank you, that was a fast hour. Well done.

NS: I know. Is bang on. We got oh, we got one minute left. So and you know, in that time I just want to ask where is just. Yeah. Let us know the website address and where do you hang out online if people want to kind of follow your kind of trajectory and what you're doing.

PS: Yeah. So it's beatbread.com, so money for music, beatBread. We're on LinkedIn; if you want to reach me, messaging me on LinkedIn is is a great way to do that. We're on Instagram, is where our most active following is. I think we're also on Facebook as well, but I think Instagram is where the bulk of our people follow the company are.

Yeah, and then signing up is easy and you just type, go to our site and type in the name of the artist and the email address and then we'll let you know, you know, are you sort of in the ballpark of an advance or not? And then the process is pretty self-serve. You can get human help if you need it after you signup. It's just put in the artist name and email address and the rest goes from there.

NS: Awesome. Thank you again for your time, Peter. It's been an absolute honor.

PS: Thank you. Bye guys.

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