Blog

Scale by Stem

February 27, 2020 | Written by: Stem

We founded Stem in 2015 with the goal of providing independent artists the tools to manage their businesses and eliminate the friction of collaboration. We built a platform that revolutionized payment distribution amongst collaborators, allowed artists to retain ownership of their masters, and gave everyone involved access to a shared data dashboard.  Five years later, our goal remains singular — to pioneer a new path in the music industry and set a standard that leads with clarity. 

Watching Stem artists emerge as some of the world’s most respected creatives further fuels our fire to build a platform that provides a clear financial picture of their craft, ultimately dispelling the notion of the “starving artist.” We believe in a world where being an artist is considered as stable as being a doctor, a lawyer, or an engineer. 

Along the way, we’ve learned a lot about ourselves.  We have explored ways to make the music industry work for all creators.  To us, the creator is not just the artist — it is the songwriter, producer, manager and director — everyone involved in the dynamic business of producing and promoting a record.

Through it all however, we have repeatedly witnessed our artists reach a point where they need funding for their next step.  We’ve seen tremendous change in how artists collaborate, produce, distribute, market, and monetize their art.  In-house teams have been replaced by freelance creatives, online platforms like TikTok create more traction than radio stations, and a new generation of creators have risen to the surface.  But throughout this evolution, we’ve seen no change that responds to these industry shifts as it relates to how artists fund their business.  

As we observe the opportunities available today for artists to fund their projects, we struggle to find options that are fair, clear, or honest.  We believe artists deserve deals that clearly outline how much money they are taking up front, how much they would have to earn to break even, and how long it will take to do so.  It’s time for artists to take control of their terms and the ability to choose their advance amount, payback fee, and timeline. 

In the summer of 2019, our Head of Strategy (a hip-hop artist himself who spent four years working at SpaceX) partnered with our CEO and brainstormed a better future for artists and a new way to access fair capital. He envisioned an alternative for independent musicians like himself to remain autonomous yet still receive the resources to grow.  What resulted wasn’t simply born out of a desire to put cash in artists’ pockets, but out of a glaring need to solve the largest roadblock those artists face in today’s music business. This is about equity, ownership and freedom. 

Abhi Kanakadandila (Head of Strategy)
& Milana Lewis (CEO)

At Stem, our core value has always been clarity above everything else.  Today we launch Scale, a funding alternative to creators at every stage of their careers.  We are excited to roll it out to Stem Direct users. Scale is available to any user with catalog in Stem, even if they are currently signed to another company.

We think Scale advances are going to shake things up, and this is why they’re different: 

Advances With Transparent, Low, and Flat Fees

Most distribution/label deals leave artists in the dark about what they’re giving up.  Scale advances come with transparent fees based on how much money the artist needs and how much the artist wants to pay back each month — the artist then knows exactly how much he or she is paying over time. Also, as part of our program, the artist can schedule an in-person meeting with our team to build a custom financial model to see the real cost of the deals being evaluated. If you’re interested in utilizing that service for your team, learn more about Stem Check here

Users Can Continue To Take Funds As They Grow Their Careers  

As users pay back advances and grow their careers, they can continue to tap more funds at lower rates. We created a system that allows creators to genuinely build independent careers, and our product doesn’t force creators to choose cash over ownership. 

Preferable Tax Structure

Most advances from labels or distribution companies are subject to taxes up front, thus the actual cash in the artist’s pocket may be significantly less than the headline amount of the deal. Scale advances are taxed later as income is actually earned. 

Stem Does Not Take A Revenue Share On Master

Almost all distribution/label deals require that the artist give up a percentage of recording revenue, even after they recoup the full advance. With a Scale advance, artists maintain 100% ownership of their masters and only pay Stem’s low distribution fee.

Artists Keep 100% Creative Control 

Stem will never tell an artist how many tracks, albums or videos to drop.  The money is the artist’s to invest as he or she wants. Create what you want to create when you want to create.

Here’s the link to our advance calculator where anyone can review different advance sizes, payback periods and monthly payback commitments.

We’re excited to Scale with you. 

Best,

Team Stem