The business of music is the business of payment flow, with all that money-moving among consumers, artists, labels and other participants involved providing songs, dance, video and related content to fans. It seems like a criminal understatement to say that that business has changed (and keeps changing) as a result of digital technology — in hindsight, “reinvention” might end up being more accurate. Even so, those developments are having a significant impact on the financial foundations of the industry.
Get ready to learn about one of the latest music business and payments models in an upcoming PYMNTS webinar, scheduled for Tuesday, Aug. 21, entitled “How Global Music Platform izo Does Payments.”
izo Roots: Madonna
With over 200 million monthly views and millions of subscribers globally, izo, the parent of media company DanceOn, is a digital network devoted to original dance-centric video and music content for millennials and Gen Z audiences. With A-list roots (such as having Madonna as a co-founder), izo has launched the careers of several up-and-coming artists.
Dan Steinberg, chief financial officer of izo, who has hedge fund and venture capital experience, recently sat for a discussion with Karen Webster to preview the webinar and explain what izo brings to the table.
“As we discover new, unsigned artists, we develop them into brands,” Steinberg told Webster, describing izo’s work as akin to an “incubator.”
The first thing to understand — and a point that will be further explored in the webinar — is the inherent complications on the business side of music and performance, such as dance. Finding talent is only the first step. In fact, in some cases, that might be one of the easiest parts of the process of going from nobody to star. Promotion, marketing and exposure are also key, which are all both easier and more difficult (depending on the circumstances) than in the golden oldie days of vinyl and limited, monolithic media.
Since no one really enjoys working for free, payments are always an issue. A dancer on YouTube needs to keep track and receive payments for views earned via that medium, for instance, and the Facebook pages owned by the talent can also bring in revenue. But that is to say nothing of royalties or the other types of payments that are part of the business.
“There are hundreds of partners we work [with] in any given month,” Steinberg said.
As will be explored further in the webinar, izo acts as an administrator for the artists, their online channels and their payments — taking the place, perhaps, of a full-time accounts payable (AP) clerk who could do the same for a dancer, singer or musician. The calculation of payments involves page views and other metrics that are kept track of by izo. The company essentially functions as the merchant of record for its artists in terms of onboarding and payments, Steinberg explained.
“All the numbers will flow through us, and we parse that out, and determine what the monetary value is,” he said. “Our CMS is like a scoreboard for how much to pay out for each person.”
Those payments flowing through izo typically range from $100 to $150 per month for an individual artist, he said, and “they are pretty regular.” The izo payment process is automated via the platform’s work with AP software company Tipalti, and artists receive payments via ACH and wire transfer, he said. The company recently “decommissioned PayPal because not enough folks” were using it.
In addition, izo deals with challenges common to main platforms and service providers. Those challenges include international payments, given that izo has artists in such places as Russia and Africa.
The experiences the platform has already undergone, and its plans for the future, will provide another deep look during the webinar at how entrepreneurs are not only reinventing the music business, but changing payments as they do so.
To register for this live PYMNTS discussion taking place on Wednesday, Aug. 21, 2018 at 1:00pm (EDT), please complete the registration form below: