And The Writer Is...with Ross Golan - Ep. 174: Alex Heiche (Sound Royalties)

Episode Date: August 10, 2023

We’re excited to announce a special bonus interview with Alex Heiche, the CEO & Founder of our incredible supporters, Sound Royalties. Ross recently sat down with Alex to discuss the artist-friendly royalty funding services they provide. Read below to find out more about Sound Royalties and listen to this conversation on any platform you find your podcasts! Alex founded Sound Royalties in 2014 with the vision of providing funding to music creatives without ever taking ownership of the underlying copyrights. Its unique business model, tailored to creatives’ individual needs, lets creators keep 100% ownership of their copyrights while providing ongoing cash flow during the term of the advance. The company works with all types of royalty streams to maximize a creative’s options, going far beyond solely music streaming platform revenues. To serve its thousands of customers in 16 countries, it works with more than 130 PROs, publishers, labels, and distributors across three continents and maintains an international network of representatives who know their region’s music professionals. Hosted on Acast. See acast.com/privacy for more information.

Welcome to And The Writer Is with Ross Golan. There are millions of singers, thousands of artists, and only 40 songs per genre at a time. These are the stories of the hottest creatives, the most venerable legends, artists, songwriters, executives, and more. Follow our socials and share your music with the And The Writer is community. See you all there and now. Here's this week's episode. Hey, this is Ross Golan from And The Writer is. I have a special friend here today to talk about something that many songwriters need,

which is a little financial stability in this crazy unstable industry. So I'd like to introduce, ladies and gentlemen, Alex Heikey from Sound Royalties. Welcome to, and the writer is my friend. Oh, great intro. Thanks, Ross. I appreciate that. I'm happy to be here. So I would like you to.

explain what sound royalties is because a many songwriters have heard of it or it sounds familiar, but they don't really understand what it is. So tell me a little bit about what it is and how sound royalties got started. Sure, sure. I'll start with how it got started and then how it evolved to what we've created today. So, you know, I came from a software and a high-tech background, and in 2013 decided to make the leap into the music industry. You know, it's something I wanted to be part of. As a kid, I just wanted to ride my bike and play music. I played half a dozen instruments, and that was my motivation.

So going to software and finance was great, but it was missing something. It was missing my passion for music. So I decided to come to the music industry. And the concept behind sound royalties was to bring a, financial services company funding to creatives around the premise that operated similarly to a bank in the sense that we didn't want to own, right? We provide funding. We don't buy copyrights. We finance against them and provide funding against them. You know, so we started to create credit and risk models around how do you forecast income streams and provide funding against them. And we established

ourselves as the artist-friendly solution. And so as we've evolved from the start, it was always, didn't know what you did, heard of you, but don't know what you do. Then, oh, it's probably too good to be true. And then slowly, one by one, people have learned that it isn't too good to be true. It's funding without the risk of losing the copyright,

without the personal guarantees. You know, it's a fixed dollar amount for a fixed period of time where we're taking the risk if the royalty streams don't pan out. So let's say I have a song that has 5 million streams right now, and, you know, I'm struggling to make a car payment or something like that. If I contacted Sound Royalties, how would that, you know, what's the process of going from,

okay, I'm somebody with a song that's getting some movement, but, you know, I need to, some money now. How does it work? Sure, sure. So first to clarify, you could be a songwriter, you can be an artist or producer. We'll work with the sound recording or the composition, the writer share, the publisher share, the distribution income. So whatever income you're earning, if it's as small as $5,000 a year for that stream of income, and that can, so you're talking $400 and something dollars a month, we can often provide funding and financing. And then we work all the way up on the global superstar, but you present. present us with your different income streams because there's so many different income streams

in this industry. And we look at them and say, okay, I'm trying to raise this amount of money to accomplish this for personal or professional reasons. We'll analyze it and then we'll give you three options. And for example, we'll say, look, do you want to pay us this back, this amount that you're looking for in one year or five years? Because if you stretch it out, the less it's going to impact your income stream because we're not doing 100% recoupment. We're looking for a specific dollar amount during each period and anything above that can flow through to you. And so a lot of times people will choose an option that stretches out a little further, allows them to keep income but get income now.

So the process is show us your income stream. We'll analyze them, forecast your income, give you several options to choose from that. From once you choose it, then we'll move on to the funding process. You've actually worked with a few of our former guests, and I don't want to necessarily drop their names, but I know that other people have used this who are not just up-and-coming writers or producers. How would someone who's more established come to sound royalties? Really the same way, but typically their business manager or their entertainment attorney will bring them to us, or they'll have a relationship with us directly, and they'll share with us their income streams, what they're trying to accomplish. The process is simple, whether you're looking for, you know, $5,000, $10,000 or a couple million bucks, right? You know, $5, $10 million.

It's the same process. We're not asking for tax returns. We're not asking for audited financials. We're not doing a credit check to see what your credit score is. Right? We're looking at the music, looking at the income streams of what they've generated and what they will continue to generate. And from there, presenting very clear, simple options to fund against those without the risk. of again losing the copyright or any other assets or needing to provide a personal guarantee.

A lot of people in the business are nervous about, you know, a lot of creatives in the business are nervous about what the other side of the business does, you know? Like there's always this fear. So I want you to tell me a little bit about, you know, the sound royalties team, you know, the people that you work with and, you know, what keeps them motivated and how they work? You know, we've got an awesome team. And, you know, the first, I want to go back to the fear that creatives have about what's happening on the other side of the business.

And I think it's a valid fear because there's a lot of, there's two ways to generate funding, right? There's financiers and there's investors. Investors want to own a piece. And so if you agree to pay them back $10, but you make $10 million, you'll probably end up paying hundreds of thousands or more back to them, right? Financierge, hey, give me $10, pay me back 12. That's it, right?

And so it's one, know who you're working with. And when you want to know who sound royalties is and the type of people and what motivates them, you know, our team was founded on the principle of doing things the right way for the right reasons. And transparency is one of the key things. And so if you're doing something for the good, the people are. that are part of it really enjoy what they're doing. And our team is doing something that's really great and they know it and they feel it and it inspires us. And that's how they're one of the

reasons that they're motivated. You know, we're all passionate about music. We're all in awe of what creative's ability to do because it's not just performing it. It's creating it, you know, telling a story through words and music or creating a feeling or a vibe. And you can see, you know, it's one thing to say your team is motivated, but you can see that our team is because we have a very low turnover rate. You know, we've got plenty of opportunities and grow from within. We just had seven promotions. I think there was a press release or an announcement last month about that.

We've got a very diverse and inclusive team with our headquarters in South Florida, but a global footprint servicing 14 countries and four continents. You know, our culture is built around a supportive environment that works hard to ensure that we're always aligning interest between the company and our team. And then there's the fun stuff. Since day one, we've had a fun committee. Different people from different department

that are, whether it's a Mother's Day brunch, you know, Mother's Days of Mimosas or pancake lunch or, you know, something during the holidays, there's always something the fund committee is putting together to keep things fun and interesting. So, you know,

From your perspective, what's some advice you would give, you know, independent or newer artists in the music industry with regard to developing their careers? Someone new coming for advice or anybody coming for advice is I start off by saying, look, the overnight success story you usually hear about is 10 years in the making, right? So it's going to take perseverance, diligence, and to keep going. But understand, one of the great things about this industry, it's mostly a network of professionals trying to help each other. Right.

And so you can turn to others for advice and understanding. You know, perfect your craft. Do what you love. But then don't forget it's the music business. So you've got to focus on the business side of things. So understand, educate, educate, educate. Because so many people don't understand that, for example, there's 50 different income streams they can collect, you know.

And so are they going? We actually put it up on our blog. 50 income streams every creator should know about. and where to find them. Go out and understand the different ways that you can monetize and perfect your craft, but grow your craft and your audience. Yeah, I always say I stopped signing songwriters

and started signing entrepreneurs, and that really helps. You know what I mean? The music industry is much more vast than we give it credit for. And, you know, we think of the two or three major buckets of income streams, and we generally forget.

about like you said the other 47 so I definitely go check out that blog because that's valuable information um you know in in the spirit of of you know you guys aren't the newest company you're still generally new but not that new um and but it seems like people are starting to talk about you more and more they need your services more and more where do you see the company going in the next year five years 10 years are you going to be are you going to evolve into something that is more on the creative side? Is it going to always stay on the finance side? What is the future of sound royalties?

You know, you asked me to go out up five years, ten years. Looking back, we've actually been around and evolving for almost 10 years, founded in 2014. You know, and first we started with two payors. We grew to add more. Now we work with over 130 different publishers, PROs, labels, distributors. You know, we started on the writing. share and grew to the publisher share and grew to the sound recording and digital performance royalties and the neighboring rights and tour income, you know, whatever the next income

streams are, we'll continue to find ways to support the creative community and servicing them. You know, we've also added adjacent businesses like tour finance and bridge funding. You know, over the next 10 years, I think we're going to continue to do what we did over the past 10 years and that's see the importance in our ability to continue to play a critical role in the growth of a creative's ability to grow their own careers and reach their individual goals. So whether it's offering new products and services, funding new income streams, or even integrating the latest technologies to do it, we're going to continue to evolve as the industry evolves to meet the needs of the music community, whether we're servicing a distributor or label or

independent publisher or an individual creative. Well, thanks Alex for doing this. You know, it's always exciting to meet people who enter the music industry from a place of helping the community and being about the community and not necessarily coming in to pillage and to try to take advantage of people. And this is a service that I know many songwriters need. So, again, thank you so much for

being on end the writer is and I appreciate your support. Thanks for us. Great to be here. Thanks for having us.