The complex world of rights and rights management is a huge pain point for artists. With the increase in the number of record labels and streaming platforms around, it could be difficult for artists to track where their work is being used and how they are earning from different platforms. Despot wants to make it easier for artists to track their income and even know about missed revenue opportunities.
The company
The company has raised $1.9 million in seed funding from Wonder Ventures, United Talent Agency and Amplify.LA and former SoundCloud CEO Kerry Trainor’s Creator Partners. Mogul was founded in 2023 by former SoundCloud Chief Creative Officer Jeff Ponchick and former SoundCloud VP of Engineering Joey Mason.
Ponchick — who created SoundCloud’s direct-to-creator subscription program, now known as Next Professional — told TechCrunch via email that after the duo left the label in 2022, they started mulling the idea of tracking lost royalty revenue for musicians.
“We were very interested because musicians always needed more money but had problems taking steps to get paid what they were owed. This felt counterintuitive. We dug deep and reached out to musicians with different career paths and a lot of similarities started to emerge in the problems they were facing,” he said.
Image Credits: Despot
The company is in private beta with 250 artists, where it saw a previously undisclosed $3.5 million in revenue.
What is he doing?
Mogul provides an overview of an artist’s sources of income – both publishing and recording – such as mechanical rights (music streaming and playback), public performance rights and neighboring rights (use of a track in places like broadcasting).
Image Credits: Despot
The company allows artists to connect with different sources for music distribution such as Audiomack, District, FUGA and DistroKid. Once they connect different sources, they can track rights coming from different platforms.
Artists can see their income from different streaming platforms along with track-specific income. All companies that work with artists must provide raw data about their rights. Ponchick noted that these files often go unused unless an artist chooses to audit. Mogul tries to pull data from these files and tracks – performing an automated “office check” – if an artist has any income that is missing from the royalties they own.
The company estimates that artists are losing out on royalty income that is almost 10% of their potential revenue. The founder emphasized that lost rights are often the result of issues that arise when registering for intellectual property rights.
“Honestly a lot of it boils down to enrollment-based issues. With so many platforms for an artist to manage and take care of, a lot slips through due to the sheer complexity and opacity of the music industry. Our job is to clean it up,” he noted.
Marcus Cobb, co-founder of creator payment unbundling solution Mozaic, said music is intellectual property by law, which involves a lot of complexity about how artists can make money.
“The music you hear in the background of a restaurant has different rules and regulations than the music you stream from Spotify or even the music you hear on TV, movies and video games. These rules are very strict. They require detailed records of who your collaborators are and how everyone shares copyright ownership,” he said.
Cobb noted that even small mistakes when registering copyrights can result in unpaid royalties for years.
Earning money
Mogul is exploring different ways to start earning revenue. For starters, it introduces a SaaS model that provides different levels of control to startups along with features such as permission rights anomaly detection for enterprise customers.
Image Credits: Despot
The company has also piloted a model where it takes a percentage cut from artists of the royalty recovery amount. He said he would finalize a model based on artist feedback.
The issue of rights
With the launch of short video platforms, there are now more places where artists’ work is being used. There is also a growing debate about artists getting a fair share of royalties and regulators are also taking a hard look at the issue.
In the US, lawmakers like Rashida Tlaib are trying to find legislative ways to make musicians get paid more. Last year, France proposed tax on music streaming services to fund a body that supports musicians. Earlier this year, the EU said the bloc was exploring new rules to better share streaming revenue among artists.
With this complex and evolving system, investors in Mogul feel there is an opportunity for the startup to help artists.
“The way revenue is tracked and remitted is complex and constantly evolving. This pain is felt by all creators, whether you’re a musician, a digital creator or a podcaster,” said Caroline Jacobs, partner at UTA.VC.
“Artists must connect to multiple platforms that may not integrate with each other to track revenue performance – and sometimes there is ‘lost’ revenue where an artist may not receive royalties due to misspellings, incorrect account information, among many other reasons.”
Sam Wick, head of UTA.VC said the challenge for Mogul will be to make the platform easy for musicians to understand.
“Making the platform and reporting easy to use and understand will be key to success. Mogul will interface with multiple platforms, rights information and territories. It’s an incredibly complex problem,” he said.
Moazic’s Cobb, who sees promise in tools like Mogul, said musicians often don’t have money when they’re starting out. And a plethora of tools and services promise to help them raise money with fees of up to 20%, so they need to build trust with artists.
