The Music Investment Problem
Investing your money in a way that supports something that you believe in, which produces a return on your investment should be everyone's goal. This is the primary driver behind the idea of music investing. To support artists while profiting in the process. Why hasn't any company been able to execute this successfully enough to the point where the investor and artist both benefit for the long term? Here are a couple of main reasons why companies failed and our solutions for them.
Music holds emotional value
Music holds a different kind of value in the eyes of the market economy. Music holds emotional value rather than monetary value. Without a doubt there are songs that generate revenue and have been producing profits for decades now. But by and large if you were to take a chance on your neighbor up the street on the fact that she will become a hit sensation (even though her music may be awesome!) from an investment standpoint it is not a good one. There are soo many factors that play into the success of songs. Even investing into a song that has stood the test of time decreases in value year after year because there are 14-20 million new songs being uploaded on Spotify alone with an ever increasing market of artists.
Case 1: PierDiem
We spoke to a great group of individuals who tried to solve this problem. The companies name was PierDiem and had this exact direction where fans of artists would invest money into the artists songs so that however well the songs performed the fan would receive a portion of it. In theory this sounds like a great idea and a win win for all involved. When a fan invests money into the success of a song for a mid to low tier artist the return on investment is basically zero. There isn't enough views on the song to collect royalties in proportion to a return on investment (being Spotify pays out $.003 per stream). Thus going back to our friend up the street in our dilemma.
PierDiem was kind enough to keep their website up as a learning tool for others to see where they made their mistakes so that someone else could pick up the ball and continue to try and solve this important problem!
Link to the website: https://investperdiem.com/
We propose a more traditional approach financially while maintaining the importance of supporting a cause we love. Our success and expertise has come from investing money into the stock market. Fans invest money into a portfolio of investments that we manage and the profits from this investment are split between the fan and the artist. The fan and artist both receive a return. This money is for the artists life during their career and after. Which supports themselves and their families.
More details on performance and where this money will be invested.
Lack of trust
Like many industries, the music industry seems to have some bad apples that spoil the trust and reputation for others. Companies with music investing have made false promises to their users who entrusted them to deliver. We have seen this in many cases in relation to bitcoin, cryptocurrency, and NFTs. The companies realize that their idea will not produce value in the long run so they try and cover it up with all sorts of exterior appearances to give the allure of success and prosperity. The majority of people in the music industry and companies genuinely helping artists financially are amazing people. Lack of trust is a major reason why a lot of companies trying to solve this problem have failed.
Case 2: VEZT
The problems for the users of this application started from the word go. Lack of payment, technical malfunctions, and misleading their users was their forte. They approached this solution by providing "proprietary blockchain technology" which in this case has proven to hold no weight in the forms of monetary growth. The users of this application have the intentions that make this great idea run, but without a trusted vehicle, all we have is the engine!
Link to App: https://apps.apple.com/us/app/vezt/id1355223813
Transparency for users on:
A. Where the money is going
B. Who receives what
C. How the company makes money
D. How much it costs
E. Updates on performance
We believe that if users are trusting you with their money that they have a right to transparency on where they stand with you and your platform. People are open and understanding when you are open and understanding. It is a two way street for the platform and users to help one another.
Music investing when executed properly for the investors and artists involved will reinvent the way we invest our money. Supporting causes that we love while making profits in the process will be the future of how individuals invest their money. The users and customers of the world are supporting more and more companies that have great messages behind them that benefit more than just the organization. A combination of execution and trust will pave the way to solving this problem for millions of people around the world!