Paperchain founder and CEO Daniel Dewar has spoken to Music Week about how the payment platform has provided financial support to self-releasing artists during the pandemic.
Paperchain’s mission to support creators was recognised at the Music Week Tech Summit, where it was one of the five winners of the Start-Up Initiative.
The payment platform provides faster access to streaming revenues for music creators. Here, Daniel Dewar reveals why he believes that it’s becoming a key part of the streaming economy…
How did the Music Week Tech Summit help you develop the company’s profile?
“TheMusic Week Tech Summit was great – we were able to connect with people we've never met before and in some cases reconnect with people I haven't seen for a long time. It definitely generated a lot of top-of-funnel interest for us. It not only expanded our pipeline but our network of supporters as well. One thing I have found is that people really get behind our mission and even if we can't work together now, there's a willingness to help open up doors for us.”
How does Paperchain enable creatives to access royalties more quickly?
“We connect to streaming feeds of Spotify, Apple, YouTube, etc, we price the streaming data everyday so creators can see the dollar value of the streams, not just the stream count, and we make deposit it into the creator wallets. So as a creator, you can now see the money you make and get access to it.
“We initially spent a lot of time on a deep learning model that would allow us to look at historical streaming data and payments data to accurately predict what a payout rate would be in a given earnings cycle. We then use that to value daily streams and make the payment to the creator every day. That model for pricing the data is the hardest part and why this type of product hasn't been available before. We're pricing the value of streams before even the DSPs do.”
How has the pandemic accelerated the growth of the service as creators sought faster payment solutions? What plans do you have for expansion?
“At the beginning of the pandemic lockdowns, the industry was in a bit of wait-and-see as tours were delayed and then cancelled. In June, we started getting a lot of people coming to us as they realised they needed to get their digital income in order. We launched the service proper in June 2020 and paid out $2,000 in the first month. In April 2021, we passed $800,000 paid out. We've definitely been in the right place at the time.
“We've been focused on the music vertical and will continue to do so for the near future. We do have an integration with YouTube, so it is logical for us to look at video and other content creators on YouTube, and start to add integrations with Twitch and TikTok and expand the types of monetisation models we can support.”
We've definitely been in the right place at the time
How are you partnering with labels and distributors? What deals have you recently struck?
“We're currently in private beta with a several indie distributors and will be announcing those partnerships at the end of the beta period. We allow distributors to offer their creators a better payment experience, while also simplifying the liability for the distributor. Instead of thousands of individual payments, now it's a single payment to Paperchain. So you get to better service your creators, you can use that for retention and acquisition, and you get an admin relief and bottom line opportunity as well.”
We've seen other companies such as Ditto launch new financing options - is this an area ripe for innovation?
“Definitely. The music industry is data-rich and underserved by existing financial products and services. As distribution has become commoditised, most distributors are looking to two sectors for bottom line opportunities – advertising and finance.
“At Paperchain, we talk about what we're doing as ‘streaming finance for streaming media’. We talk about the connection of streaming media and the connection between the word streaming and immediacy. That's what we're doing with payments.”
Paperchain features in the latest edition of Music Week.