Distributor Stem is the latest non-label company to start offering advances to its clients – although in this case, those clients include independent labels as well as individual artists. Its new feature is called ‘Scale’, and it will involve Stem drawing on a $100m pot (supplied via a capital partnership with investment firm CoVenture) to offer a revolving credit line to artists and labels.
“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,” explained a blog post announcing the launch. “As users pay back advances and grow their careers, they can continue to tap more funds at lower rates.”
Stem is stressing that Scale will not see it taking a percentage of people’s master recordings revenues. “With Scale, we intend to raise the bar by providing favourable, clear financing that enables artist-driven businesses to thrive at every stage of their growth,” said CEO Milana Rabkin Lewis.
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