Empowerment IP CEO Stephen Duval on the artist rights revolution

Amid the boom in catalogue deals and Taylor Swift’s move to regain control of her music by re-recording her Big Machine albums, it’s clear that major artists are looking for new options to take control of their rights and secure capital solutions. Launched in 2020, Empowerment IP has offices in London, New York, LA, Toronto and Sydney providing IP creators and owners with a broad range of bespoke capital solutions. The company was co-founded by manager and entertainment mogul Guy Oseary, whose roster includes Madonna and U2. In a viewpoint written exclusively for Music Week, Empowerment IP CEO Stephen Duval looks at alternative investment solutions for artists… Artists have been battling over the ownership of their work for decades; from Michael Jackson purchasing the rights to the Beatles in the ’80s, to Prince’s feud with Warner Bros in the ’90s. The control of an artist’s intellectual property (IP) has, throughout history, been the central dispute between the creative and the commercial side of the music industry. The question being, what does this relationship look like in 2021 and is there a way for the artist to remain centre stage? Despite the temporary challenges to the live sector, the music market is forecast to grow at a 7% compounded annual rate up to 2030. This is largely due to digitalisation transforming the distribution and consumption of music. The proliferation of smartphones, broadband and new digital platforms allow us unbridled access to almost every song ever recorded. These positive industry trends along with high-quality, long term and uncorrelated cashflows are attracting a raft of financial players to the arena. There should be more options for artists to monetise their work without losing it forever Stephen Duval Even today, with unprecedented levels of deals taking place across the music industry, there remain limited choices for artists who are seeking liquidity. Their options are selling their rights, taking an advance from a label/administrator, or bank debt. Traditional capital solutions typically mean that artists forego their future income streams and upside from their rights, or tie themselves up in creative obligations or restrictive covenants, often with personal recourse. With so many high-profile catalogue acquisitions, many artists are becoming increasingly vocal about their roles as the creator and how their rights are owned and controlled, and rightly so. In a catalogue sale, artists typically receive a significant upfront payment but will then lose the ownership of their rights forever. This includes all future income streams and value in a growing market. Although it is ultimately the artist’s decision, I really feel that there should be more options for artists to monetise their work without losing it forever. It’s clear that artists have historically been underserved and I believe that they should be empowered with a broader range of financing solutions in the same way that we have seen in other comparable asset classes. This is wholly the reason why Empowerment IP was founded. We can create a range of bespoke capital solutions which provide various benefits such as significant liquidity without selling IP, or capital gains benefits whilst retaining creative control and ultimately retain 100% of all future upside value. This is done by working with a select number of highly engaged capital partners that share our ambitions to innovate in the sports, music, media and entertainment sectors. With our track record and relationships, we are able to offer investment opportunities that provide higher yields than some established equity funds with, what we see, as a lower risk relative to full catalogue acquisitions (with LTV ratios typically between 50-60%). We see a huge opportunity in the market to structure equitable deals, which are both new and compelling to artists while still providing attractive yields to investors. For me, the creator is the lifeblood of the industry. These creators need to be prioritised above all and be made aware that selling their IP is not the only way they can monetise their life’s work.

Roadies to nowhere? Artist manager Ross Patel on finding an urgent solution to the EU touring row

During a virtual session last night (February 8), MPs debated a petition with 238,000 signatories calling for freedom of movement for UK artists, musicians and crew across the EU. There’s a growing sense of urgency surrounding the campaign to support the ability of artists and their crew to tour in the EU without costly bureaucracy. Ross Patel, co-founder and co-managing director of Whole Entertainment, has had to deal with the impact of the EU trade agreement on his artists, including Elder Island and Billy Lockett. Read on for his viewpoint on the Brexit deal – and a possible solution… As politicians blame and bicker over who failed who during Brexit touring musician discussions, the industry’s pleas for support and screams of injustice risk being drowned out. So much hangs in the balance, with yesterday’s Parliament session being the latest in what feels like a dark, twisted Netflix series entitled On A Roadies To Nowhere. How does this affect us? I’ll do my best to explain using a real time case study. Picture this… Elder Island spend all of 2020 crafting their second album Swimming Static, delivering it in all its beauty. We should be celebrating. Instead, I’m buried in news articles, calls with visa lawyers, booking agents, tour managers and promoters, trying to work out what the hell is going on.With a new May 2021 release date for the album (knocked back from March due to the Brexit-Covid combo disrupting live date announcements, vinyl product manufacturing and shipping adding hefty unforeseen campaign costs), we scramble for dates and venue holds, and push back all tours, waiting for clarity. We wave goodbye to essential revenue and audience interaction as we boot an entire EU run of 9,000-plus tickets from 2021 to 2022, immediately postponing that vital £50,000 revenue needed to operate the business. As each country slowly comes back online post Covid-19, we must be mindful of routing a tour through one country that may not be open for business. Margins for Elder Island’s international touring are thin enough, despite regularly selling out shows, and since Elder Island is fully independent (no label), having to front the cash flow ourselves makes losing even one show untenable. We hope our collective voices are heard to bring these crucial issues back to the table for a resolution before it’s too late Ross Patel Assuming that Covid-19 is soon behind us, and we can schedule a tour that actually works, we then face the ‘Brexit Boss’ – the final level in this horrific game. The 1,000-plus page deal is remarkably thin regarding UK musicians touring in Europe, particularly on carnets, free movement of large vehicles and visa implications.Fingers crossed that our promoters and venues survive the barren dry spell and we can find affordably priced tour buses, then we can hit the road! Unfortunately, we currently have no idea of the total tour costs. We can’t factor in visa costs or the carnets for equipment and merchandise, because we don’t know what they are. We don’t know whether that tour bus we hired for an eye-watering sum from our desperately tight budget can even take us, due to large vehicle and cabotage restrictions in the Brexit deal.Could the Schengen Visa be at least one solution? It's a well-established system that, as of February 7, 2021, updated the Schengen Visa Code to include a price increase from €60 to €80 per application of individuals from third countries, which as of January 2, 2021 now includes the United Kingdom. With a touring party of seven, this immediately adds a previously non-existent line to the budget totaling €560. However, it's still incredibly unclear whether this visa would allow you to perform. Even if it does, this won’t solve the merch question or cabotage restrictions. Laughably, the section on the Schengen Visa website that explains who needs a visa hasn't been updated since April 2019, and the UK is not listed. Meanwhile, we do our best to plan and stay in constant communication with our UK and International teams.We take up arms and stand shoulder to shoulder with the rest of the industry. We sign petitions, back campaigners, support the unions and hope our collective voices are heard, from UK to EU parliaments, to bring these crucial issues back to the table for a resolution before it’s too late. PHOTO CREDIT: Ross Silcocks (Entirety)