Now HIFI founder and CEO Damian Manning is expanding access to its service called “Cash Flow” that allows artists to get paid a salary twice a month based on their expected royalty income for the year. He’s also trying to shop HIFI Enterprise, a version of the royalty dashboard designed for artists signed to major record labels, though getting the major labels to allow HIFI to access their data presents a serious challenge.
“We initially built the solution to service indie artists, and indie artists’ managers and their teams,” Manning said in an interview over Zoom. “What we’ve discovered is the artists in the major label system, the managers in the major label system, major publishing system, had the same set of challenges they’re looking for solutions for.”
The three major record companies declined to comment for this story.
Currently, HIFI’s “Cash Flow” service works by rerouting an artist’s royalty revenue from labels, publishers, and distributors through the company’s coffers, allowing HIFI to analyze how much an artist is expected to make throughout the year, and adjust compensation accordingly.
“[Cash Flow] looks at the pipeline and historical earnings of given artists, and forecasts what they’re going to be earning over the next rolling 12 months,” Manning says. “Then we guarantee a payment to them that arrives every two weeks, no matter what. If they earn more than we guarantee, we pass through the rest as a bonus, and they can cancel at any time.”
HIFI charges a 2% administration fee for use of Cash Flow but does not charge a fee for access to its standard royalty dashboard. (Enterprise partners will be charged a fee, which HIFI has not disclosed.) Business managers around the industry say Cash Flow and products like it will provide artists with more leverage and flexibility as they move throughout their careers, and HIFI says there is strong demand — even from major artists.
“The idea that someone who’s big doesn’t ‘need the money’ — I don’t think it’s a question of needing the money, it’s not wanting someone else to be holding your money,” says Andrew McInnes, Diplo’s manager and CEO of TMWRK Management, who notes the business managers he works with have embraced HIFI. “Anything that makes a business on the scale of Diplo more efficient is good for me, it’s good for Diplo, and it’s good for his business manager.”
“Getting a big check for publishing every two years is not conducive to setting up a good financial flow for anyone,” Mike Merriman, the founder and president of PARR3, a consulting firm that specializes in business management for entertainers, including clients Kehlani, Dillon Francis and 6LACK. Merriman believes that services like Cash Flow will allow artists to reduce the need to take big advances from labels and maintain more leverage in contract negotiations. “Instead of doing a deal where the label takes 82% and you take 18% of sales, you can leverage that to something much more in your favor,” Merriman says.
HIFI, which is currently only available to U.S. residents, also has plans to expand its offerings internationally.
Some managers are hoping that the company, and other services like it, will pressure the majors into providing more information to its artists in a more accessible fashion. “[HIFI] can become much more interesting and more exciting and more of a game-changer if the payors move to more real-time information,” says Mark Kaplan, a music business manager and partner at Citrin Cooperman, whose clients include The Black Eyed Peas, Snow Patrol and Interpol.
“Sometimes these label statements are set up to be overly complicated and light on data,” another business manager, who wished to remain anonymous, tells Billboard. “It’s a 300-page pdf, but it’s not even really telling you what you want to know. We need more transparency and more accountability.”
Source: News | Billboard