Legal Name: Vezt Inc
Location: Los Angeles, CA
Founder(s): Steve Stewart, Robert Menendez
Social Media Following: 15697 Likes on Facebook, 4819 Followers on Twitter, 25700 Followers on Instagram
INDUSTRY – Music
Size: $9.8Bn (2018); (Source: RIAA)
Vezt, a Los Angeles based startup, allows artists, songwriters and other Intellectual Property (IP) holders to monetize their IP via an Initial Song Offering® (ISO™) on their digital marketplace. On the marketplace, IP holders can sell a part of the royalty rights to a song for a specific period of time to fans and investors. Vezt leverages Blockchain to track transactions on the platform and ensure transparency.
Current Industry Pain Point
While the performing artist (singer) gets most of the of the coverage and revenue, other artists who participated in the creation of the song such as songwriters, producers, and musicians also get a part of the royalty payments from various sources. This amount is typically a fraction of what the singer makes. The songwriter of a song that had 34 million YouTube views and 38 million Pandora streams made a little over $200 from each source. These artists are left with contracts that are valuable but there is no way to leverage on these contracts and monetize them while the bigger players have access to financial instruments.
For the artist, the process begins with registering and uploading their music onto the platform. This is then verified by Vezt’s rights management team. After being verified, IP holders can begin the ISO™ process. Artists and songwriters decide the percentage of the royalty income they are putting up for sale, the type of IP, the duration for which it is being sold off (reversion period) and the amount they are selling the share for (raise amount). Fans and investors can then subscribe to it by purchasing the desired portion of the share up for sale. Vezt uses the existing royalty payment infrastructure to track and collect royalty payments. The revenues that accrue via the royalty for that period are then distributed to the fans and investors by Vezt on a pro-rata basis based on their holding. At the end of the reversion period, the royalty rights are then transferred back to the original rights holder. For their service, Vezt takes a 5% fee on the royalties paid out.
Based on feedback from users requesting more information about the songs available, Vezt plans to add features such as Song Performance Analytics to help fans and investors make more informed decisions on their investments.
Origin and Founding Team
Vezt was launched in 2016 by Steve Stewart and Robert Menendez. Steve has a background in music and managed bands such as Stone Temple Pilots. The two co-founders met in 2015 at Robert’s startup called SURKUS when Robert was looking for concert venues. The duo saw a big gap in the music industry where artists could produce and distribute songs relatively easily at minimal cost but couldn’t monetize their work easily to raise resources to create new work. With Robert’s Wall Street finance and Steve’s expertise in the music industry, the duo started thinking about creating a platform that leverages on social media and technology that enables artists to monetize their IP by selling a fraction of the share. Their vision was to allow fans to buy into their favorite songs and partner with the artists at a visceral level.
The co-founders brought on super producer Andreas Carlsson as Chief Strategy Officer. Andreas has sold over 150 million records for artists such as Katy Perry, The Backstreet Boys, Britney Spears, and Celine Dion. Aamek Richards, a veteran in the music industry, is on board as the Chief Creative Officer. Vezt’s advisory board includes music industry heavyweights such as Marc Geiger, Polo Molina, and others.
Performance and Trends
After launching its platform in October last year, Vezt issued its first payment to songwriter/producer Chuck Inglish who raised $8,272 on the platform. While many budding performers have taken to the platform, artists that hold rights to songs by universally recognizable stars such as Kanye West, John Legend, Lil Uzi Vert and Rihanna have also come forward to participate.
The Vezt platform can be accessed via an app as well as the browser. While the Vezt App has only over 1000+ downloads from the play store, the platform has had ISOs that have sold out in 20 minutes. Vezt has a rating of 4.3 on the App store with positive reviews.
Vezt has also expanded to South Korea and is growing rapidly. Steve expects to have “upwards of 100,000 new song titles” on the platform soon. In 2017, Vezt raised $1.4M via an ICO. Having initially been valued at $1.2M, an investor believes Vezt has “estimated value of nearly 30x that”. However, its token is trading at 4% of its ICO level.
While the $9.8Bn US music industry music industry is growing and its revenue streams are evolving to be more reliant on subscriptions and streaming, revenues are yet to enter the $11-14B highs that the industry witnessed from the mid-90s to the mid-2000s.
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