The record industry has been ripe for disruption for years and who better to do it than music veteran Steve Stoute. His new venture, UnitedMasters, will help up-and-coming artists get their music on streaming platforms such as Spotify and Pandora and use online tools to market the musicians and help them reach fans, according to The Wall Street Journal, and investors came through for this one.
Superstar investment firms backed the company including Google parent Alphabet Inc., Andreessen Horowitz, and 21st Century Fox, totaling $70 million.
“The new firm helps answer the question of how do you convert cultural capital into financial capital,” said Ben Horowitz in a statement.
The San Francisco-based company already houses a 40-person team and because of Stoute’s background as a leading music industry exec for labels including Interscope and Sony Music Entertainment, he knows very specifically what the music industry needs in order to reinvent its business model.
Similar to CD Baby, a platform that rose to popularity in the early 2000s, artists who work with UnitedMasters will pay to have the company distribute their work. UnitedMasters has teamed up with music streaming services as distribution partners aiming to keep low price points for their users. There is also a variation in payout. Whereas some services only offer payments per stream, UnitedMasters is allowing the artists to diversify the payment structure to include ticket sales and merchandise.
The most important point to note here is UnitedMasters will help brands connect with highly targeted audiences through data analytics. The difference between the music industry and Stoute’s platform is the label never knows who specifically is purchasing the artist’s music. However, with this service being driven by data, UnitedMasters can provide the brands with insights that the companies can A/B test against, therefore better-targeting the consumer.
“Brands are spending hundreds of millions of dollars trying to get to young people by using music as the vehicle,” Stoute said in a statement to The Wall Street Journal. “Being able to use music data and making it actionable so they can target and speak to these fans, that’s super important.”
UnitedMasters will live under Translation Enterprises, which also houses Stoute’s ad agency, Translation.