AIP Frequently Asked Questions
How do you collect royalties from copyright owners and how do you ensure that these numbers are correct?
In today’s music industry, streaming services and digital distribution are generating a growing amount of revenue, and there are many established organizations and companies involved in collecting and distributing royalties for content owners. Our mission includes streamlining the royalty process. We are working on improving the digital connections between content owners, royalty collection entities, streaming platforms, artist-focused publishers, and other music stakeholders while utilizing industry-best systems and partners. In the near future, we will be able to collect and distribute royalties more automatically, transparently, and securely through blockchain technology.
In the initial phase of AIP, we will work directly with carefully vetted artists and publishers under formal agreements that clearly specify the required commitments, policies, and procedures involved in the collection and redistribution of royalty payments. Together we share the vision of growing capital opportunities for the music industry and music lovers. This new form of song investing is built upon a closer connection between the creator and their audience. We will work together to improve this mutually-beneficial system, and will be keep you informed along the way.
How do you specify which part of the royalties you are offering?
For many artists, the royalty system is complex and slow. Therefore there are many third parties who have built their businesses around royalty collection and distribution. Think of the role of publishers, rights management agencies, and PROs (performance right organizations) for instance. An artist or label may employ a variety for any given song. We understand the importance of defining the royalty percentage that any AIP song is offering to investors and the public. To make it as clear as possible, we use an overview like the example below:
I already made it as an artist. What can AIP offer me in addition to an immediate cash flow?
The NSO (New Share Offering) of your song will not only give a direct and immediate cash flow towards you as a rights owner, it will also help to build a strong network of investors and music fans. This kind of ambassador community can amplify your promotional power.
In addition to providing you with capital that can go towards boosting your reach, AIP investors are also incentivized to share the song with friends, family, etc. Your network on AIP is the next level in social following. You’re in this together. You both benefit from the success of your song.
I am an independent artist and really need the cash flow to invest in my career, my visibility, and new recordings. How will AIP generate attention for my NSO?
We are just getting started, but we’re growing quickly with the goal of listing a wide variety of amazing music from creators of all walks of life from all over the globe as soon as possible. We envision a vibrant platform where independent and signed artists can push their career forward and connect with music fans and investors in the music industry. AIP goes beyond crowdfunding, as the crowd can earn profits on the song’s performance. The crowd is motivated to promote that song they’ve invested in, and we’ll be promoting the platform as well. We’re also implementing an automated affiliate tracking system that reward people for bringing you investments. Remember—you don’t have to give up any of the actual copyrights you own, you are just selling shares that represent portions of royalty collection.
As with many things, you may start with a small community. But if people want to engage with your content and believe in its potential, it can earn, and AIP can help you grow. Re-investing the funds you receive from your NSOs into your own marketing and promotional efforts can help ensure the song earns profits for you and your AIP shareholders. Happy shareholders may invest in your next song and bring others along!
When investors find unknown artists whose appeal grows rapidly after they invested in their song, their profits can possibly top what any other song may have produced for them, whether or not it was from an established artist. Similar picking a winning company in the stock market, discovering and identifying valuable songs early can yield lucrative returns.
How does the affiliate system work?
The affiliate system is a referral tool built into the platform that encourages investors to invite like-minded contacts to join them at AIP. An investor (referrer) invites their contacts (referred) via a shared link generated by the AIP affiliate system, and if the referred successfully buys a share (or shares) introduced by the referrer, the referrer will get 2 AIP credits and the referred gets 3 AIP credits.
How do you ensure any quality control of NSOs?
For 2018, NSO applications for content owners will be by invitation only. That is subject to change, and we’ll provide updates regarding any changes.
We are working together with a variety of artists, songwriters, labels, publishers, and streaming services to optimize the quality of the content and experience—as well as the royalty earnings.
How do you predict the offering price of a new song?
Nobody can guarantee future revenue predictions. We can make an estimation based on historical data, but why should we decide what the market value is instead of allowing the market to decide? At AIP, we utilize a consensus pricing model to determine the NSO share value. That is a huge difference with other IPOs and ICOs. When launching an IPO or ICO, it is usually a centralized and private process that decides what the first offered price is.
AIP embraces the power of community. That means members of the public who are interested in acquiring royalty shares of a song decide what the shares cost during the NSO’s subscription period. If fans and investors believe in the new song's potential, they will invest in it. The more subscription money that's invested, the higher the price per share will be when trading launches. The total amount raised will determine how many shares the subscribing investors obtain before trading begins. This results in an active group of investors who share profits with the creator. Learn more about the consensus model here.
It seems in hardly anyone owns 100% of any form of song rights alone. How are you gonna solve this issue?
NSOs can be based on any ownership and shared profits. For example, if you own 20% of the master rights, you can NSO a portion of that. Also, multiple content owners of a single track can unite for an NSO. At this time, we encourage content owners to NSO soon-to-be-released tracks as well as new creations of master copyrights.