In the latest news, artists’ financial rights organization HIFI is acquiring royalty payments FinTech The Music Fund (TMF) in a deal aimed at addressing the notion of a starving artist. Specifically, HIFI wants to leverage TMF’s artificial intelligence (AI) that powers a “smart-pricing algorithm” that gives artists and musicians a rapid upfront cash advance on a portion of their royalty income. The quick-turn fundings are typically done in under 24 hours and give content creators the liquidity they need without putting a lean on their work.
In short, the program allows “music creators to retain 100% of their copyrights and all earnings from future releases” a company statement said Thursday (Sept. 30).
HIFI, which began accepting applications in 2020, said it is “currently tracking hundreds of millions of dollars in royalties on behalf of its creative clients and their teams” and added that this acquisition “will power new artist funding options,” complementing existing solutions.
Sound Check Meets Paycheck
HIFI CEO Damian Manning told PYMNTS that “One of the great advantages of an AI-based forecasting system is its ability to learn from data points beyond historical earnings. This powerful capability unlocks access to financial products for a broader class of emerging artists, not just creators with extensive track records.”
TMF co-founders, CEO John Funge and CTO Thomas Jerde are joining HIFI as Chief Technology Officer and Vice President of Data Science, respectively. Both have deep roots in financial automation and AI. The announcement noted that “after becoming an independent company in late 2018, The Music Fund developed its industry-first, fully automated process for artist funding. Artists can get up to $50,000 within just 24 hours.”
Next-Gen Financial Tools
Efforts to monetize music, video and art are having a good year, as several initiatives announced in recent months illustrate how platforms from YouTube to Spotify and more are bringing digital payments technology to bear on the complexities of royalties management.
On Sept. 22, PYMNTS reported on the $100 million fundraise of creator monetization platform StreamElements led by SoftBank Vision Fund with participation from PayPal and others. In early July, creator financial services platform Karat Financial announced a $26 million funding round, stating that “the [creator] industry is one of the fastest-growing business sectors” with an estimated annual value of $100 billion and more than 3.2 million creators “earning over six figures a year” but with limited access to capital until recently.
As for HIFI, Manning said in the announcement that TMF’s automated valuation model speeds up “a new generation of financial products for HIFI members and partners. The addition of John and his team will be hugely beneficial to our creator community as we continue to build a technology infrastructure that financially empowers artists across all stages of their careers.”
The Payments Pipeline
Funge said the company’s prediction AI capabilities enables underwriting for “a variety of short-term financing solutions to artists at absolutely no risk to them,” adding that “we’re looking forward to leveraging our automated valuation model to deliver an entirely new class of innovative financial products to the music creator community.”
HIFI’s Manning told PYMNTS that “Much of the intelligence in the AI solution is peering into the pipeline of income that artists have earned but is still making its way to their pockets. The music industry is notoriously slow to pay. When you’re able to quantify and securitize that pipeline, you can make informed, low-risk underwriting decisions. And that risk decreases further as you increase the number of data points you analyze.”
He said ACH is the primary method used to disburse royalties to creators at present, “but HIFI is developing more immediate ways to pay its members,” adding that the organization “plans to offer its members access to more immediate working capital and credit products. For example, based on the daily listener engagement of their music across the market.”