Music tech startup Stem has closed a Series A round of $8 million to expand its suite of products designed to help artists get paid more seamlessly across digital platforms. The round was led by Aspect Ventures and Evolution Media a partnership between CAA, private-equity firm TPG and Participant Media.
The total invested in Stem to date is $12.5 million.
Frank Ocean, Childish Gambino, DJ Jazzy Jeff, Anna Wise, Chromatics and Poolside are among the acts already using the platform to distribute and monetize music and videos.
The founders of Stem are building a platform that they say will streamline tracking and payments to artists across digital services.
That’s something that traditional digital distributors from Tunecore and CD Baby to The Orchard already do pretty well. But Stem believes they can do it better. Payments in 3o days is one promise, along with better told for tracking activity for marketing purposes, as well as, income.
Then there’s the even trickier problem of dividing income when a track involves multiple collaborators. Stem says, just tell them who owns how much of a song and each person or company will get paid their fair share. Stem also has a tool to create and manage contracts with collaborators to ensure everyone is compensated in a clear and timely manner.
How Stem Works
Upload Music – Upload original music and videos to monetize on platforms including YouTube, Spotify, Apple Music, Amazon, Pandora, Tidal, Deezer, and SoundCloud. (Note that it appears that Stem does not yet handle payments for song “covers.”)
Invite Collaborators – Tell Stem who worked on it and how much they own.
Manage Contracts – Create and manage contracts with collaborators to ensure everyone is compensated in a clear and timely manner.
Track Revenue and Performance Data – Stem provides a unified dashboard for artists and their teams, involving everyone in the success of a release.
Share Earnings – “Stem makes it easy to share earnings generated across platforms with everyone involved.”
Get Paid Monthly – “No more chasing money you are owed or manually dividing income every recurring payment.”
Sten is a strong and now well financed concept that is seemingly well executed. Royalty splits are a major problem for creators.
But switching distributors is not all that easy or desirable. Perhaps more importantly, will Stem also add the marketing and other services that most distributors offer and indie artists rely on?
I know I’m getting ahead of myself, but if I were a digital distributor like The Orchard looking to offer better services as well as a major point of differentiation, Stem would be an attractive, albeit expensive, acquisition. – Bruce Houghton