The music industry now operates in a global marketplace and artists, managers and content owners are becoming increasingly sophisticated at servicing international fanbases. Technology has provided us the tools to allow an ever more engaged relationship with music fans and it has never been easier to create viable commercial relationships with them.
The continued growth of the live music market, the ever-quickening pace of the streaming revolution, burgeoning merchandising opportunities and the demand for music from other creative industries such as film, advertising and TV means that there are more and more revenue streams coming online. For established artists both core and ancillary incomes have taken a sharp upward tick in recent times.
And with that growth comes the need to resource effectively – more income streams mean more work and more pressure on managers and anyone else involved in the representation of artists or the administration of that income. It is not unreasonable therefore for those people to become somewhat overwhelmed by that workload and to prioritise some activities at the expense of others.
The foreign exchange or FX market has seen a similar transformation of its business with the growth of technology in recent years. The financial technology (FinTech) industry has allowed the blossoming of many new businesses focused on creating alternative solutions to the traditional banking sector and this in turn has thrown up a number of interesting possibilities for the music industry.
Established artists, managers and content owners have, as mentioned earlier, become extremely good at running international businesses that generate huge amounts of income, income that is often paid in different currencies. And, as also mentioned earlier, those same people are often overworked and under resourced. It’s not a surprise then that something like an FX strategy might get pushed to the bottom of the ‘to do’ pile in favour of more pressing issues.
Why wouldn’t it be? In fact, what is it? A lot of people in the industry are simply uninformed about the importance of FX so why would they bother giving it any attention at all?
Put simply though this lack of understanding means that they are leaving many millions on the table.
Whenever income is generated abroad and converted into another currency (says dollars into sterling) its not unusual for traditional banks to make a hefty charge. Not only do they convert the currency at an often-unfavourable rate, they add expensive fees on top. Using traditional credit and debits cards are also expensive, generating even more fees when used abroad.
Often, for the sake of an easy life, this isn’t questioned but it can end up being a very expensive way of doing business. In plain terms, taking the path of least resistance is costing the music industry an awful lot of money.
Financial institutions have been overcharging the music industry for years – it’s outrageous. They rely on artists and their representatives being unaware of the opportunities available to them. Our company believe it is wrong and we have created an alternative better way that allows artists, managers and content owners to take control, purchase foreign currency at significantly better rates with transparent, fixed and fair fees, utilising easy-to-use technology and our experience of the FX market.
We also have our own Centtrip prepaid Mastercard that allows the pre-loading of currencies for a fraction of what the major banks charge, which is very useful for tour managers who have to pay out in numerous different currencies while on the road.
FinTech allows the movement of money quickly, transparently and cheaply. It can be done through an online dashboard or an App and every transaction can be seen in real time. There is no longer any excuse for hiding behind opaque systems and out of date practices. No excuse at all.
We already work with some of the biggest artists in the world and the feedback from them so far is that a better understanding of how to move money around internationally more efficiently has really opened their eyes to what they have been missing out on and to what is possible moving forward. With the international audiences getting bigger all the time as both established territories and emerging markets become more connected, the ability to manage currency effectively will become ever more important.
It’s time to de-mystify this extremely important part of the financial process. It’s time for the music industry to wake up to the possibilities that the FX market offers them. For too long they have settled for a poor service that offers no transparency and is designed to siphon off any much money from transactions as possible.
It doesn’t have to be this way.
Tony North – Co-Founder & CEO, Centtrip Music
First Published in Music Business Worldwide