When watching dance in videos, chances are good that those videos are from media company DanceOn, owned and operated by music platform izo. The story of how payments flow among dancers, musicians and other players shines a spotlight on the inner workings of moving money in a digital, international, cutting-edge environment — offering lessons for all kinds of companies involved in payments and commerce.
In a recent PYMNTS webinar entitled “How Global Music Platform izo Does Payments,” Karen Webster discussed that complex payments flow with Dan Steinberg, chief financial officer of izo. Steinberg, who has hedge fund and venture capital experience, now has his finger not only on the pulse of youth culture, but the frontier of digital payments.
From Click To Payment
The main rule of that world? Every click eventually translates into a payment. Take YouTube, which Steinberg used as an example during the hour-long discussion and slide presentation.
Every click from a performer who is part of the izo network — backed by Madonna, it has over 200 million monthly views and millions of subscribers globally — generates data in Google’s content management system (CMS). That data makes its way back to izo, basically telling the company, “Hey, this is the [payment] owed for those clicks. You owe payments for these three dancers as a result of those clicks coming through,” he told Webster.
The job of those analysis clicks to determine payments, then send those payments each month to their proper recipients (to say nothing of associated tax and other documents), was labor-intensive. “We would receive raw data from YouTube directly and do Excel on our own” to make those calculations, Steinberg explained. “It could take two or three weeks to figure out payments” for a single performer, he said, adding that some payments are pretty small, but still need to go out month after month.
That’s just for YouTube, a single channel. As Facebook and other online platforms figure out how to better monetize content, “the complexity will only increase,” he said.
However, izo started using accounts payable (AP) software company Tipalti to automate that work. Introducing automation of those payments reduced those weeks to days. “It helps simplify our workforce,” Steinberg said. “It allowed me to go and flex my staff, to take them off the day-to-day check entry” and other accounts payable toil.
That flexibility and automation brings another benefit: scaling the business does not require izo to incrementally hire “excel jockeys” and other workers. “You can scale more quickly without having to find the headcount to support the operation,” he said.
Fraud, too, went down with a better payments system. Steinberg told how there’s been no repeat of an incident that involved checks being stolen from the company mailroom, then altered and cashed.
Katy Perry Promo
All this matters because izo is growing and expanding, and having payments as an anchor could drag down progress.
For instance, the platform recently helped promote the new Katy Perry album after being contacted by her music label, which wanted access to, and marketing enthusiasm from, the izo network. “We contacted influencers and dancers across our network to help promote it,” he said — a task that also required having an efficient flow of payment to get income to those who earned it. In fact, digital technology has changed the music business in such a way that platforms like izo are becoming more important to marketing and distribution, Steinberg noted.
“We have a direct link to their target audience,” he said.
Platforms such as izo are also moving further into product promotion, via deals with brands to feature them in videos and dance content, Steinberg said. “We are approached by large consumer groups” who want izo to place their merchandise in videos.
The network izo can call upon — along with its consumer base — is international, with talent coming not only from North America, but such places as Russia and South America, too. Artists typically receive payments via ACH and wire transfer, he said.
Checks, too, remain a popular payment method for the artists who receive payments from izo. “For some people, checks just work for them,” Steinberg said when responding to Webster’s disdain for that particular payment method. “It tends to be very powerful with our international” artists.
So what’s next? For one, finding and developing new artists not yet signed to labels using the power of the izo network and platform, he said. No matter what, the experiences of izo, discussed in depth during the recent PYMNTS webinar, offers a case study in how to do payments digitally at the cutting edge of global pop culture.