Music Financing Startup Duetti Is Trying to Make It Easier for Indie Artists to Sell Their Catalogs

Over the past few years, wave after wave of A-list artists have made headlines selling their catalogs for astronomical sums: from the likes of veteran superstars like Bruce Springsteen and Bob Dylan to modern-day headliners like Justin Bieber and Future. Even today, despite anxieties over the economic outlook and interest rate hikes, one of the biggest topics in the business involves the fate of two massive catalogs: those of Pink Floyd and Queen.

Largely left out of the deluge have been independent artists with less-lucrative or less-iconic catalogs, and not just because their names don’t make for clicky headlines. As streaming data has demystified the potential for songs and catalogs as financial assets for those outside the traditional music industry, a focus on big names — and the lean-back profits that their evergreen songs can reap — has followed, with their potential for future success more or less certain. That has naturally left out many independent artists, who may have dedicated fan bases but also smaller, less obvious or longer-term routes to the type of payoff for which those types of investors are looking.

A new startup is looking to fill that gap for independent acts who are looking for ways to monetize their back catalogs in exchange for up-front liquidity. Duetti, the company co-founded by former Tidal COO Lior Tibon and former Apple Music business development executive Christopher Nolte, came out of stealth mode last month and raised $32 million from the likes of Roc Nation, Viola Ventures, Presight Capital and others to purchase tracks or entire catalogs from indie artists in perpetuity — with the idea of juicing them up through digital marketing efforts to make a profit for investors.

“Our thesis at Duetti is that the marketing muscle that’s required to market a catalog of older songs is very different vs. breaking new artists and new music,” Tibon told Billboard in an interview. “The catalog piece is where the more nuts and bolts of the streaming services, the data-driven marketing, come into play, and frankly I feel like that’s a neglected area of overall marketing strategies of those in the industry. We’re not only a platform that’s pricing and buying music, but it’s also about the management piece once we buy it. We’re not some financial firm that sits back and is waiting for the income to come in, we’re very active in management.”

By taking this approach, Duetti is addressing, in one way, what it sees as a larger industry issue: independent artists need more access to capital in order to advance their careers outside of the traditional record label model. There are several companies that are taking different approaches to try to address this gap, including Sound Royalties, which sold to GoDigital in September 2021. These companies help artists sell royalty streams, allow fans to invest in the value of a song and receive percentages of proceeds — or advance sums against future royalties, as a traditional label might do. Duetti’s plan, as Tibon says, is to take the catalog sale idea and invest in song management to try to maximize returns, even when those returns may be much smaller than a major catalog or may be spread out over a much longer period of time.

It’s notable, then, that both Tibon and Nolte are veterans of the streaming world. Their combined years on the inside of major streaming services, they say, have given them insight into how to properly value and assess a fair price for an older song and predict its future revenues. The company has already invested in over 100 songs by some 60 artists and aims, through its new funding round, to broaden that to a pool of some 70,000 artists — limiting their interest to tracks that have been on streaming platforms for at least two years and racked up at least 500,000 streams within the past 12 months, giving the Duetti team the track record to assess performance. Artists can sell 100% of their interest in a song or choose to retain up to 50% in an ongoing partnership.

“I think we all know that streaming is the power and the engine of the music industry today, especially for artists in our segment, independent artists,” Tibon says. “Our entire prediction method is based on the dynamics of streaming platforms.”

Why did you want to start Duetti?

I started my career in finance as an investment banker at Deutsche Bank, actually working on music at the time from a financial point of view, and then spent the last seven-plus years up until last year [as COO of] Tidal. So combining the different insights I’ve learned throughout my career, it became very obvious to me that there is a clear opportunity to provide another financing option for independent artists. Because as we’ve all been seeing, there’s been all this movement in the past few years of big catalog acquisitions, and it’s really been down to streaming and the ability to predict everything that’s happening in the music industry. And so I was very excited about the opportunity to use all of the insights and tools and things that I’ve gained over the past few years and deploy a similar model, just more broadly, and make it accessible to many more artists.

What is the gap in the marketplace that you guys are hoping to address?

For me, the independent artist sector is the most vibrant and exciting sector in the music economy. And independent artists, like everyone else, need financing to finance their business and their life. So that’s the gap. Previously, financing needs were only met by record labels, and that came with a lot of strings attached, particularly in terms of how the future looks like — your creative control, your marketing control, and so on and so forth. So what gets me excited is the ability to leverage our team’s expertise in financial markets and the streaming economy and the data and predictions in order to enable a different type of solution for artists that are looking for funding in a different way.

Can you walk me through an example of how this might work for an artist?

We did a deal with an artist a few months ago called ZieZie. ZieZie is based out of London in the U.K., he’s an Afrobeats artist, very successful, he’s 24, so still fairly early on in his career and has already achieved great things. He started independently for his first few tracks, then he worked with a label for a few years but then left and decided to stay independent. We started to talk to him and his team and it became very clear it was a win-win situation. For him, he was able to take one of his earlier tracks from 2017 — so, a five or six-year-old track — that’s been performing really well on streaming services for a long time, there’s a ton of data, which then enables our team to come and evaluate that for the long-term and basically price it, and offer a fair and appropriate price. And for him, that basically allows him to monetize, and instead of waiting many years to get that income over time, he’s getting a lump sum immediately that he can then do whatever he wants with. And in his case, given how excited he is about his career, he’s really using those funds to push his music career forward.

Once you have ownership of the track, what do you guys do with it?

We have multiple people on our team that are data scientists, data engineers, and what they do is monitor every track that we partner with an artist on to make sure that track, first of all, is properly presented on all platforms, identifying if there are any obvious gaps, comparing it to similar tracks based on its attributes — whether it’s channels, whether it’s geographical profile — and seeing, can we identify obvious gaps, can we employ various tactics like playlisting or other promotion to make sure the track is appropriately presented and being pushed to the right audiences? We’re making sure the songs are properly tracked on social media platforms, whether it’s Facebook and Instagram or TikTok and all the different platforms to make sure that creators, if they so choose, can have a very easy route to use that music. So that’s just a sense, but taking a step back, there are a lot of nuts and bolts, data-driven marketing tactics that you can do to make sure that the track is appropriately taken care of, featured and presented and pushed on the digital platforms.

Are you talking mostly about digital marketing, or also more like traditional synchs, advertisements, TV shows, things like that?

Right now we’re mostly focused on the former. With that being said, we are very interested in synch and we have been exploring various options, and as we grow the catalog — we have over 60 artists and more than 100 tracks — and every track that we partner on is a very significant track, with millions of streams over a number of years. So we are very interested and we think there’s a potential of looking at that further.

What’s your assessment of this area of the business, funding for independent artists in general?

There are different solutions, but it still feels fairly disjointed, and for me, it’s all about providing another alternative. That’s what we’re doing with Duetti. I’m not aware of anyone else who is doing what we’re doing at scale in terms of raising tens of millions of dollars in order to deploy them in partnership with artists from an acquisition perspective. I think there are other companies that maybe do short-term loans and various licensing arrangements. But for me, what gets me excited, is there is a reason why all those A-list artists are selling catalogs. That’s because the financial community is now able to fully evaluate the value of music because it’s become so predictable with all the data underlying it. So if that option is available for the A-listers, then our job is to make it available for many more folks.

This option of selling older tracks, whether it’s a 100% sale or a partial sale, is very attractive for many reasons. First and foremost because it provides the artist with liquidity. Frankly, if you compare selling a few older tracks to us vs. doing a new licensing deal, probably in many cases if you go with us it would be very lucrative. No. 2, because we’re a longtime holder, we can invest in all that marketing infrastructure I mentioned before. And that also has a lot of spillover effects on your artist profile overall.

You worked at Tidal for the past seven years, you were involved in the executive leadership team. What did you learn at Tidal that informs what you do now?

Really everything. Maybe the most important is that artists of all sizes have core fan groups that keep repeating and listening to their music in a way that is very predictable. It makes sense to buy up old catalogs of Justin Bieber or Dr. Dre or Bruce Springsteen, or any of the names that have sold over the last few years, the big catalogs. It’s less obvious for folks that are not inside the industry to understand the ins and outs that artists of all sizes, even if they’re not on everyone’s radar, have very dedicated fan bases that really listen to their music for many many years. That was very obvious to me. And because that’s happening, that in turn allows someone to predict the result of the song long term, and as a result of that have a financial prediction.