Stem CEO Milana Lewis Wants To Get Artists Paid

Joining us on Trapital for the second time is Milana Lewis, co-founder and CEO of Stem. She last joined me at the end of 2019 and Stem has been in hyper-growth mode since then. Stem helps artist get paid in a clear and timely manner — not only through online-based financial tools, but music distribution too. As a former talent agent for UTA, Milana noticed it wasn’t exactly cut and dry how artists were paid out. That issue is exacerbated inside the music industry due to murky record deals and no-so-transparent streaming numbers. And these problems are affecting artists of all sizes, from the Meek Mill’s of the world, to independent ones.Enter Stem, which just raised a $20 million. With the the fresh injection of capital, Stem wants to extend its digital tools across the industry even further. It’s a completely new level of transparency inside a industry that’s notorious for being the opposite. Here’s everything Milana and I covered in our interview: [0:49] Stem Raised $20 Million In Latest Funding Round[7:03] The Differences Between Label And Independent Artists Are Becoming Smaller[11:07] Music Labels ARE Becoming More Artist Friendly[13:05] Companies That Stem Models Itself After[16:19] Payments Are An Issue Across Entertainment, Not Just Music[19:29] Technical Workers Pivoting Into The Creative Side[23:03] Stem’s Unique Positioning In Music Distribution [33:47] Asking Artists “Why?”Listen: Apple Podcasts | Spotify | SoundCloud | Stitcher | Overcast | Amazon | Google Podcasts | Pocket Casts | RSSHost: Dan Runcie, @RuncieDan, trapital.coGuests: Milana Lewis, @milana Enjoy this podcast? Rate and review the podcast here! ratethispodcast.com/trapital Trapital is home for the business of hip-hop. Gain the latest insights from hip-hop’s biggest players by reading Trapital’s free weekly memo. TRANSCRIPTIONTRAPITAL 129[00:00:00] Milana Lewis: I think a lot of people assume that, oh, you can get your music out there. And that's the only role of the distributor, but that's really a delivery company, right? There needs to be that distinction that people need to realize that, like, there's delivery services. And then there's like distributors and distribution services. And distribution services is not just getting your music into the store.[00:00:16] Milana Lewis: It's about positioning it. It's about being an advocate, thinking strategically about how you structure marketing plans. And there are a ton of services that even our clients expect from their distributor and that cannot be commoditized.[00:00:34] Dan Runcie: Hey, welcome to the Trapital podcast. I'm your host and the founder of Trapital, Dan Runcie. This podcast is your place to gain insights from executives in music, media entertainment, and more who are taking hip hop culture to the next level. Today's episode is with Milana Lewis, the founder and CEO of Stem, a company that's on a mission to provide clarity and accountability to the music industry through modern financial tools for artists, labels, and the people they collaborate with. Milana is a return guest to the Trapital podcast. We did our first episode back in 2019, this was actually at Stem's office and this was down in LA. This one we did remote though. It was great to catch up because Stem just raised $20 million to further its mission. So in this episode, we talked all about the plans for that money, where things are going with Stem, where things are going in the music industry, and why this is so important.[00:01:31] Dan Runcie: And one of the reasons it's important is because of a op-ed that Milana recently wrote in Billboard which highlights the difference between artists independence and artists autonomy. And Milana's case is that artists really want to have autonomy with their careers. And they may still be willing to partner with others.[00:01:52] Dan Runcie: So we talked about the distinction there, what that means truly. And there are a few artists, examples that she use that we brought up here and also what that means for Stem in the future that it's building towards. So, we talked about that, and we talked about where Stem sits relative to other distribution services, what customer acquisition looks like for them, and some of the other ways that the business is structured, what's in place for the future. We also talked about a few recent trends happening in the industry, which is great to talk to the actual operators in this space building it. So I really enjoyed this conversation and I hope you do, too. Here's my chat with Milana Lewis.[00:02:31] Dan Runcie: All right. Today we have a return guest, Milana Lewis, who is the founder and CEO of Stem, which just raised $20 million. So Milana welcome back to the podcast and give us an update. How are things going? And what's the latest, especially with the new round you all have? [00:02:47] Milana Lewis: Thank you, Dan, for having me back. I love sort of seeing the growth of the show, too, and the audience, and just more and more people appreciating the work that you're doing. So it's fun to come back. 20 million, we raised it, gives us more runway fuel to continue building what we want to build. And we've been pretty heads down, just scaling up the team to execute. [00:03:08] Dan Runcie: Yeah. So tell me a little bit about that in terms of scaling. I mean, I know that last time we had talked, it was shortly after a raise and a pivot that you all had as well. And I feel like post pandemic though. Now the market's a little bit of a different place, but there are more and more independent artists that want to create, that want to use things and want to build.[00:03:29] Dan Runcie: So how has that influence been, especially with you all and the plans you have and where you want to take things?[00:03:35] Milana Lewis: Yeah, for sure. It's funny, you sort of used the word pivot again, and we never really pivoted. So the vision for Stem has always been about how do we ensure a music future where people can expect to get paid in a clear and timely manner, right? And that's not one that exists today, quite frankly. And I think if anything, music has the worst reputation doing that out of if any other industry. And so when we think about how do we bring that mission to life, what we realized the best way to enter the market for us was to start a music distribution company.[00:04:05] Milana Lewis: If you think about it for an artist as a business owner, it all starts with the song. The song is the first product that they create. Without that song, there's not much of a business otherwise. And the innovation we brought to the market really was around how they split the earnings from that song. And for many different reasons, that was something that became really attractive to all types of artists, right?[00:04:26] Milana Lewis: Artists that are independent but larger and leaving a major label system, as well as artists that are just starting off their careers. And what we realized is that the problem that we wanted to solve was really one for the artists who were operating more like a business, so there was a team of different people around them who needed to get paid a percentage of their earnings.[00:04:44] Milana Lewis: There were various collaborators coming in and out of projects, and the complexity there is very different than the complexity of an artist who's more of a DIY artist. And when you and I last talked, we had to make the really hard decision to part ways with the clients that, you know, fit the profile of more of the early stage artists, where their complexity of the payments was a lot more simplified, where we felt like they already had enough tools they were using to do that.[00:05:08] Milana Lewis: And we wanted to serve the more business-type of artists. The artist has a business, we call them the entrepreneurial-like ones, where they're a little bit above sort of just figuring out where they're going and have an existing management team and lots of collaborators. So it wasn't necessarily a pivot as more of a refinement and focus on our core customer.[00:05:27] Milana Lewis: And the reason we started the music distribution business is because we needed to create our first client of that software. So we built a music distribution services company that was the first client of the software we were building 'cause back then in 2015, people didn't really understand what we were trying to do, right? They sort of thought about the world of royalty counting, the world of business management, and the world of distribution as being one that's completely different from each other. And what we were trying to do is sort of integrate all of these workflows and processes into one platform and build a tool that all of these people could use, with the end goal of an experience where, whether you're an artist, a songwriter, or producer, you can open up your app or log into your dashboard and you can see exactly how much money you're making off of the products that you helped create, which is your music, right? I hate calling music a product, but it's an incredibly valuable piece of content that has both cultural value, but also has enterprise value.[00:06:23] Milana Lewis: And we're obviously seeing that happening as it's being traded across so many different types of transactions, whether it's catalog buyers buying music rights or fans buying portions of earnings through NFTs of their favorite artist, like, related to their songs so that we know that there's a lot of value in the song.[00:06:41] Milana Lewis: And so how do we bring that to life? Well, one, trying to go and pitch that as an offering to the existing music labels and distributors was really hard. They were like, why do we need this? It's their problem, not ours. And creating the messaging around the experience for an artist is really compelling to the artists, but it didn't give enough of a business reason for anyone else to invest in these types of tools or developing them at the time.[00:07:03] Milana Lewis: So we thought, let's go build our own distributor. Let's set the precedent of what an incredible experience. It can be for an artist producer, songwriter, manager to know what they're getting paid when they're getting paid. So we did that, and that's what we've been focused on for the last, call it, five or six years of the business is really changing people's expectations around what it means to be artists-centric, clear, not transparent, but clear, and timely.[00:07:28] Milana Lewis: And I think that we've done a pretty tremendous job at that. We've witnessed other people emulating our features, right, which is now a thing that many distributors offer. We've seen major labels increase the cadence in which they're paying their artists, right? We've seen sort of more transparency happening across the board.[00:07:45] Milana Lewis: And yet it doesn't feel like it's enough. And so the reason we raised this round is really to take the tools that we've built for ourselves and our distribution class. And make them work for other labels and other distributors who want to be as clear with their artists, with their creators being producers, songwriters, et cetera, and not have to make the investment in building and maintaining those tools themselves.[00:08:08] Dan Runcie: And thinking about the importance of that, there are so many artists that are signed to major labels, we see them tweeting or share their thoughts often about how they don't necessarily know what's coming in, when is it coming in and how all of those things line up. So I do feel like for you all, there's a huge target audience there that, even though many people may assume that it's the independent artists that need to see this and major label artists would be fine, no, in many cases, it's likely the opposite. So there is that black box and the fact that a lot of the artists, especially the A-list ones, want it. That means that there's a need for it.[00:08:44] Milana Lewis: Yeah. Well, the thing that I'd love to sort of dive in on with you on what you just said is you're kind of creating a distinction between a major label artist and an independent artist as being two different types of artists. And I think when you look at the landscape today, it's not so black and white. Most artists are autonomous.[00:09:02] Milana Lewis: They choose which projects are with a major label and which projects are independent. And they want that autonomy. And if that's true, then this need becomes even moreso because now they're getting to a place where they're having to have that information come into them from so many different sources, distributors, platforms that just having one place to centralize it all is going to be really important for them to make good business decisions or just be in the know.[00:09:27] Dan Runcie: Right. So do you think that when artists are like, okay, I want to be independent, they're really saying they just want to have more control in general and that they just want to still be able to have the support of others, because I do think that that's kind of what it's getting at, right? It's not that the artists don't want to partner with others.[00:09:45] Dan Runcie: It's not that they're not willing to split things or that they want to wear every single hat themselves. They just want to be able to push things forward or be able to have a little bit more direction. And you had written a piece, it was a guest column in Billboard, that highlighted this, and you used Meek Mill as an example of this exact story.[00:10:05] Dan Runcie: Are there any other examples that come to mind that distinction? Especially because I do think that you hear so much about independence, but what it really is is people wanting to have a bit more push, even if there is someone else that they are dependent on. [00:10:21] Milana Lewis: Yeah. I think it means something different for every artist. And I think it just depends on their previous experiences, right? When we sit with our clients and we ask them like, why do you want to be independent? Why is that important for you? We hear one of these following reasons, right? Control is one thing you talked about. We've also witnessed people say they actually don't care about control.[00:10:39] Milana Lewis: They just want more money and have more of the economic participation in that projects, right? That's another one that we hear a lot. The third one is not necessarily control, but more like creative autonomy and flexibility there where they don't really want some, they don't need to be A&R, right? Like, they just want someone else to help execute the activities that they are putting together as part of the release plan, or they know exactly they're going to collaborate with, like, they don't need a lot of the A&R services they're getting elsewhere. So why, why give up the freedom and being able to move agile and quickly just by partnering up with someone else, right?[00:11:16] Milana Lewis: So I think it's a combination of those. They either want to keep more of the economic upside. They want the creative liberation and freedom, and control is a big piece of that as well. And then the last piece that I actually think is pretty important is visibility, right? There's a lot of artists who are independent because they don't trust the existing system.[00:11:34] Milana Lewis: They're okay with giving up control. They're okay with giving up more of the economic upside to someone else, but they just don't feel like they can trust the way that the industry will work. And so they want to be maybe in control or they want to be just having that visibility.[00:11:49] Dan Runcie: Right. That creative piece is a big piece because especially now we're hearing the wave of major label artists that don't want to be forced to put out TikToks to promote their music.[00:12:01] Milana Lewis: Halsey, last week. [00:12:02] Dan Runcie: Yup, and Florence from Florence + The Machine, too. [00:12:05] Milana Lewis: Totally. Yeah. I mean, those are absurd, but that's the reality is like the minute that you work with a major entity like that, there's other people who are going to have a say in various parts of the rollout, which was in sometimes that's a good thing. And sometimes it's not, it just, once you hand over the project, it's theirs, it's not yours anymore.[00:12:24] Milana Lewis: And I don't believe that that's always the case. Like, I think in my op-ed I tried to make it really clear. Like, I don't think labels are bad. I actually believe that if anything we've seen happened in the last six or seven years that we've existed, is there, how do I say this? Their desire to become more aligned with their artists that they're working with, they want to be more artist-friendly. Like I just had a call today with someone who's pretty senior up in the c-suite at Sony. And, like, they're going through so many big initiatives internally to be more artist-friendly, to pay their people faster, to be more transparent. I mean, they made an announcement today where they're forgiving a lot of unrecouped debts.[00:12:59] Milana Lewis: Like, we're seeing the behavior and the nature and the sentiment of these entities changing and evolving, which is an amazing thing. It's just, how does that trickle through the whole entire ecosystem? And while they might have the resources to build it, there's so many other smaller entities and labels that provide incredible artist development services that are not capable of investing in their own infrastructure to keep up.[00:13:23] Milana Lewis: And I think that's really the opportunity for us is creating a turnkey solution for these companies that are so invested in being great partners for their artists, but just don't have the capacity to build their own technology. [00:13:35] Dan Runcie: And that makes sense. And in your piece, too, you talked about how other industries have done a better job of this.[00:13:42] Dan Runcie: And I agree with you. I think music has come a long way, even someone like Olivia Rodrigo being able to get a more favorable deal. Like, she got early on as a sign of how far things have come along. But in terms of other industries, can you talk more about that and what are some of the other things that you've seen about how others have done it better?[00:14:00] Milana Lewis: Yeah. I mean, you know, Square's a company and you look up to, and it's one that I referenced quite a bit, but what's been amazing about what they've been able to do is not only provide the tools, but also provide the education for a small business owner to become more financially literate about their business, right? [00:14:17] Milana Lewis: It's amazing how much quicker and better decision-making you can make when you're looking at the numbers consistently, and they're being surfaced to you where you don't have to like haul, haul through spreadsheets to figure out what's going on. And I still think that we're very much in the universe, in the music industry, where people are hauling through spreadsheets at every level to figure out what's going on. And that takes a lot of time. And I think what Square did so brilliantly is it took really complicated business decisions and surface data so that the person who's running the business can look at it and make more actionable decisions. Right. But it started with speeding up the ability for those people to accept payments in a digital form.[00:14:54] Milana Lewis: So when I first discovered Square is because I loved food trucks, and food trucks started off as a cash business. And then quickly it started seeing everyone being able to accept credit cards because they had that little Square attachment. And so now you're transacting all that data's being put into a system in real time.[00:15:09] Milana Lewis: So when you go to close your books or you look to see about your income at the end of the day, it's all in your Square app, you can see that happening there. You know, on a more sort of like enterprise level, it's incredible what Square and Brain or that Square, sorry, Stripe and Braintree have been able to allow startups to do, right? A lot of the whole on-demand economy, everything from Uber, and Lyft, and Airbnb could exist because of Stripe and Braintree, right? It took the headache away from a business that's trying to scale quickly and create an offering from having to figure out how you can accept credit cards, how you can transfer money between the customer and the person providing services and the platform.[00:15:47] Milana Lewis: And it did that in a way that super seamlessly. It didn't have to become something that every company had to figure out. It became something that companies could partner with them on and build everything else around it. And that enabled a lot of innovative things to exist. And music industry just hasn't had the benefit of that kind of infrastructure to enable a lot of the innovation that's happening right now.[00:16:07] Milana Lewis: Like, you know, we're spending quite a bit of time with a lot of the companies in the NFT space that are promising to share their royalties with their fans, but like they're struggling to actually make that happen because, in reality, those artists are making money from so many different sources in the real world.[00:16:21] Milana Lewis: How do you translate that income in a way that's accessible to transfer to someone else? And not just one other person, but thousands of other people? [00:16:28] Dan Runcie: Yeah, for sure. I mean, I do think that music has a long way to go on that front. And I'm curious what you think about other areas of the entertainment industry, and if you think it's any better there, I know that you were in UA before this, so you definitely, you know, saw a lot there. What are your thoughts? [00:16:45] Milana Lewis: No, like TV is the worst place. I think more than anything, especially because a lot of the streaming services and television don't pay a backend deal and they don't, they don't pay backend because they don't want to. Just for them, like that's a headache.[00:16:55] Milana Lewis: They don't want to have to figure out. . Film as well. Like, payments is a huge problem in our team and across the board. Music to me is just the easiest place to solve for it primarily because it shouldn't be as complicated as it is. It's a much more dynamic industry. Believe it or not.[00:17:10] Dan Runcie: Yeah. [00:17:11] Milana Lewis: And the partners, the platforms provide a tremendous amount of data to supplement the income that they're paying out. Whereas like, if you're trying to figure out how much your show is being streamed on Netflix, when they pay you whatever they owe you, like they're not giving you that reporting data.[00:17:25] Dan Runcie: Right. I was listening to a podcast. They were talking with Steven Soderbergh and he was talking about how, the only way that he knows that he's doing a good job, or if he's making something else, they literally are like, Hey. The movie did well, do you want to make another one? And, okay, if you're Steven Soderbergh that may work, but if you're most of the other people trying to do stuff, there's no security. There's no way to feel like you have any sense of autonomy at all with that. [00:17:51] Milana Lewis: Yeah, and honestly, like, the visibility problem isn't one that's just like limited to the artists' experience, right?[00:17:57] Milana Lewis: Like, the artist is at the center of it. It impacts the songwriters and producers and the publishers. It impacts the manager and their ability to support the artists that they're helping manage the careers of. And more importantly, it impacts the label. I mean, one of the things that I wrote about in the article that I did for billboard was just like, in reality, like I really laughed at myself thinking about being that marketing person or like that finance person at Meek Mill's label, having to figure out like, what do we owe him and how much have we spent on him?[00:18:25] Milana Lewis: Like, do they know, right? Like, how were they tracking the expenses? ' Cause every label we've talked to and done customer interviews with, they're using Google sheets. Maybe they're using QuickBooks. If they're super organized, they might have some sort of internal system for budgeting that they felt, but not everyone's touching that system, right? So there's just so much inefficiency and it, and to me, that's the part that I'm really excited about solving. Don't get me wrong. Like, I love the artist development side. We have a whole artist relations team that works on the distribution side of the business that cares a lot about the creative element of the work we're doing as well. But to me, all of that still needs really good infrastructure in order for those decisions to be more streamlined. And I think it's because everyone who comes to work into music wants to be as close to the artists or their creative process as possible 'cause that's super attractive.[00:19:15] Milana Lewis: It takes away from people who actually want to solve the, you know, the infrastructure problem that exists. One of the things we've noticed and is kind of like a funny, but also painful thing we deal with is like, we hire tons of people on the technical side, whether they're engineers or product people.[00:19:31] Milana Lewis: And I can't tell you how many of them have taken the job at Stem because they love music and want to be building solutions for artists only then to find out a couple months in that they actually don't want to be engineers. They want to be in the artist relation side. [00:19:45] Dan Runcie: Wow. [00:19:45] Milana Lewis: It happens all the time. And I thought that we were crazy. And then I talked to someone who was at Myspace back in the day, running engineering over there, and they had a similar problem. So people want to work in music because they want to be closer to the creative process of it, which is incredible. And it's so powerful to do that 'cause you're legitimately servicing people who create and shape culture, right? [00:20:06] Milana Lewis: But not enough people want to actually build the picks-and-shovels of the business. [00:20:10] Dan Runcie: Definitely. [00:20:10] Milana Lewis: And we're sure looking for people who want to.[00:20:12] Dan Runcie: Yeah. And that point too reminds me of some of the thoughts I've heard for people that have looked at a lot of these newer solutions that have come up trying to solve particular problems, or helping people support artists, or just connecting fans to artists more directly.[00:20:28] Dan Runcie: And some of the critiques I've heard from people in the music industry is that these people, they may understand their business, or they may understand tech or investing, but they don't actually understand music beyond, you know, actually wanting to be in the culture and not like, as you said it, actually, you know, picking up the shovels and doing the work.[00:20:47] Dan Runcie: And I feel like that has grown even more. I mean, even more since the last time you and I did a podcast where you're just seeing more and more of that, and it's great to see the investive activity. It's great to see everything, but there's still a disconnect between the actual solutions that need to be solved.[00:21:04] Dan Runcie: That it's not always, you know, the person that finds the artist as the investment opportunity, being able to snap photos with them and post them on Instagram or whatever. [00:21:14] Milana Lewis: Yeah, I mean, that's why we have the distribution business, right? Like, we created an internal customer that we can continue to build and evolve for who feels a lot of the same pain points, encounters, the same challenges that other labels and other distributors have.[00:21:28] Milana Lewis: And so we have them right next to us as we're building and developing. The other thing too, is when we hire people on our product team, you know, we've had a couple of people that come from. The finance world and FinTech, but the majority of our product managers and product leaders and designers come from the music business, right?[00:21:44] Milana Lewis: Like, one of our senior product managers, this woman, Sarah is incredible. She spent years working at Virgin Capital as a product manager there, but not product manager on the technical side, more on the creative, like, marketing side. So she's done that job working really closely with artists and she understands those painpoints and was a manager herself.[00:22:03] Milana Lewis: And then actually made a career pivot and decided to get into like technical product development, worked at other tech companies and is now at Stem. So, like, I think one of the things that puts us in a unique competitive advantage really is the fact that we're able to find these like unicorn humans who have the skillsets that like grew up in music, understand the music business intimately well, but have also developed pretty deep technical skills and understand how you built in scale technology offerings. [00:22:29] Dan Runcie: Yeah. That's the combo right there. I feel like everyone's after that, but when people have those people, they keep them close. They don't want to let them go. Understandably so, right?[00:22:37] Dan Runcie: Yeah. Shifting gears a bit because you did talk about distribution and that, of course, being one of the big parts of your service, I want to talk about growth and just what that process is like for customer acquisition, because I do know that music distribution has become a even more crowded space.[00:22:54] Dan Runcie: There's a lot of competitors, a lot of people try to say, Hey, this is the place you can, you know, distribute through or rehab what you need to help you. How has it been navigating that? And what are some of the things that have been most effective for you from a acquisition perspective? [00:23:09] Milana Lewis: Yeah. So a couple of things, we built the distribution business for an entirely different purpose than many other people do.[00:23:14] Milana Lewis: So the things that many of the distributors care about, we don't. We don't care about market share. So you will never see us on the peeling of an artist. You will never see us taking claim over their releases. And the way that we think about our distribution service and offering is really intentional about how can we super serve clients.[00:23:30] Milana Lewis: So again, we don't take anyone. We've been incredibly intentional about the types of clients we want to serve. And it's because we really have a point of view for them. And we think that we can help position them in a way that other people can't. So growing and scaling the distribution business isn't our biggest priority.[00:23:46] Milana Lewis: Our biggest priority is going and scaling the tools that enable the distribution business to be successful. That doesn't mean that we're not going to continue to expand that team. I mean, a lot of the use of proceeds of this fundraising round is going towards hiring more people to service our clients on that.[00:24:01] Milana Lewis: And that's a direct response to the demand that we've seen in this space and just the fact that we legitimately have not had enough people to be able to take on the clients that come to us. So we've had to be a lot more intentional and turned down a lot more business than we can take on. So we want to be able to meet the market and, you know, but do it in a way where we're so conscious of our capacity, because the reason we started the distribution business is because we saw this, like, gap in the market where so many other distributors are going after market share and growth, that a lot of artists were just lost in the shuffle.[00:24:30] Milana Lewis: They were lost in the volume and our distribution offering is a direct response to that. And we're going to keep it boutique in that way, because we think that there needs to be a place for artists to get the attention they deserve at a price that's the right value exchange for the services they're getting.[00:24:46] Dan Runcie: Yeah. I hear that. I mean, and I think for you all specifically, having the distribution service be either not necessarily a testing ground, but just having a place to be like, Hey, this is serving the other tools and services that we have. I guess there's a few other models like that that we see.[00:25:03] Dan Runcie: Like, of course I think that UnitedMasters has, you know, their version to some extent where it does serve what they do on the ad side. And I think some of the others do, but I think that the tough thing is, if you're not either building the business in some type of way, you have some other type of thing that is one of the main value adds that you offer.[00:25:22] Dan Runcie: It's a commodity and just being able to differentiate yourselves in that perspective. And I feel like that's what, at least it's been not necessarily missing, because I do think it's a very real challenge, but it's a long tail. It's a long tail for a reason. But I do think that the companies, like yours, I mean, you obviously made the switch a few years ago to focus more on the select artists that were fitting that profile.[00:25:45] Dan Runcie: That ultimately I think is where the most successful companies can be. Otherwise you're trying to just jab anyone you can. And I mean, as you know, that could be a very costly game. [00:25:55] Milana Lewis: Yeah. And quite frankly, the commodification of distribution really pisses me off because it's not a business that's easily that, like, it shouldn't be a race to the bottom on fees.[00:26:05] Milana Lewis: I think a lot of people assume that, oh, you can get your music out there. And that's the only role of the distributor, but that's really a delivery company, right? There needs to be that distinction. And people need to realize that, like, there's delivery services and then there's like distributors and distribution services. And distribution services is not just getting your music into the store.[00:26:21] Milana Lewis: It's about positioning it. It's about being an advocate, thinking strategically about how you structure marketing plans. And there are a ton of services that even our clients expect from their distributor and that cannot be commoditized, but that also makes it challenging because a lot of it is relationship driven.[00:26:36] Milana Lewis: It's hard to scale because you have to be able to be attentive and give the right focus to the clients that have a point of view. So I think there's a lot of, there's a lot of confusion from sort of the market around, like, the difference between a distributor and a delivery mechanism. And I just want those to be clarified because yes, delivery is commoditized. Distribution should not be.[00:26:57] Dan Runcie: That's a fair distinction. That's a fair distinction. So when new artists are either considering you or they're considering others, or you do want to bring them on board, what's your pitch? What is the big thing that you and the artist relations team say to bring them on and make them feel like this is a place where their career can level up?[00:27:16] Milana Lewis: Yeah, I wish I had Kristin on here with me 'cause she does the pitch so much better than I do. And she's the president of that side of the business. So she spends the most time thinking about it and kind of consistently refining the offering there. But the unique thing is is that we don't actually start pitching unless we understand what that client is looking for.[00:27:32] Milana Lewis: Because again, like we have the ability to shape our value proposition to our clients, depending on what their needs are. So some clients come to us and they say, we just want someone that's going to pick up the phone. We need them. We want you out of our way, and we want money, and we want that money as cheap as possible, and that's it. And it's like, great. We're going to give you the tools so you can handle it yourself. You'll have a dedicated account manager that will get on the phone with you whenever you need them to, you can text them. You don't have, like, a support line you call, you have that human being's phone number. And they're very responsive because they're not servicing hundreds of artists at a time.[00:28:04] Milana Lewis: And we're going to show you the options that we can give you as an advance, but you're going to control the terms. So if you want the cheaper fee, take less money up front and take in tranches. You can take the same exact of my money, but instead of withdrawing, call it a million dollars at once, take it out in tranches of a hundred thousand, you need to spend a million dollars next week, right?[00:28:21] Milana Lewis: Like if you're not, don't do that. And we're going to pay you every single month and we're going to pay all the people you want us to pay on your behalf so that you can stay focused on the things you want to focus on, right? That sort of like the tried and true, like keep things, easy pitch. Those are the most exciting clients to work with, but there's enough labels that feel that way.[00:28:39] Milana Lewis: And every so often they maybe want to get advice and strategy from us and that's great. But for most clients, they come to us because they want a real thought partner, right? I think one of the reasons why a lot more artists are not independent, quite frankly, is because them and their management team don't want to take on all the work on their own, right? I think people have, like, the criticism of, like, they always want someone else to blame. Like, they want to be able to blame the label. That is a direct statement and quote that our mutual friend says a lot. But you know, what they really want is someone that's going to understand the narrative of the artist and the positioning and advocate on their behalf to the DSPs.[00:29:15] Milana Lewis: And our pitch for them is that we're not delivering, again, hundreds of songs a week or a month or pitches for that reason. When we deliver something, the DSPs pay attention to it because we're so intentional and curated. So your pitch is going to stand out. It's going to be delivered. People are going to hear it. We can't guarantee you're going to get placement, but we're going to go out of our way to make sure that the positioning is there for your client.[00:29:35] Milana Lewis: So we've done a lot of unique things, too, with our clients to build those relationships with the editors. Everything from sending curated boxes to renting suites, suites at big sports games and inviting people out to build that relationship personally with the artists. Like, we try to be a lot more hands-on and experiential than I think many other distributors are with their clients.[00:29:57] Milana Lewis: So we take that, like, indie label approach to supporting the artist, but we don't overpromise and say, Hey, we have a big radio team. Hey, we have a whole in-house digital marketing team. Like, all of that stuff, we're very clear that we're going to outsource that, but you're going to be in control of how that money is being spent and you're going to be in control of picking the right partners.[00:30:15] Milana Lewis: So we're really more dot connectors and strategists, and we're just upfront about what we do, what we don't do. And I think a lot of people find that refreshing and that builds trust and people like that. [00:30:25] Dan Runcie: That makes sense. And I know a lot of this has been focused more on the streaming side because that is where so many of these playlists pitching and that type of conversation happens.[00:30:34] Dan Runcie: But do you get a lot of interests from artists who are focused on what support you may be able to provide if you all do on vinyl or some of the other non-streaming music revenues? Just because of how much... [00:30:47] Milana Lewis: No, we have vendors that we can partner with for vinyl distribution and physical. It's not a core competency of ours, and it's not one that we want to handle either.[00:30:55] Milana Lewis: So we're honest, we're just like, we don't do that, but here's why people who do, and we've worked with them, we've had great experiences and we'll help you pick the right one because, if you're only looking to print this number of units, they're probably not the best partner this person is. If you're in this, like, there's so many considerations. We have a whole strategy team that we've built out where this is their full-time job is getting to know the landscape of all of these service providers and vendors, vetting them out, understanding what they're good at, so that when clients come to us, we can make the right recommendations. [00:31:21] Dan Runcie: That makes sense. And does the same thing exist as well for artists that may be reaching out to you, whether they want NFTs or they want to do something Web 3.0 related?[00:31:29] Milana Lewis: Everything. Yeah. So we have a whole digital strategy team as well, where their job is getting to know all of the digital platforms and tools and new companies emerging that if anyone wants to partner with Snapchat in an interesting way or Peloton or Royal or Mint Songs, like whoever that could be, whether it's even like Discord and other platforms, like they're an expert and they can talk, they can be a good conduit but also just educate our clients on that as well.[00:31:55] Dan Runcie: Right. And I feel like a lot of their jobs who is likely just sifting through the noise and what actually is worthwhile and what isn't. How do you feel about that?[00:32:03] Milana Lewis: That was my job. I mean, that was my job at UTA, right? My job was getting to know every single technology company that could possibly partner with any of the agency's clients. Started with me as a person that I grew into a team of like, I don't know, like 30 or 40 people today that do that. There's a lot of land to cover there. [00:32:20] Dan Runcie: Yeah. It's, every new day there's something else. And I do think that in general, it makes, at least from my perspective, as you know, more from the strategy perspective, like, having the focus is there. And I know everyone is trying to incorporate something into their web, something in Web 3.0, especially if they're trying to, like, raise money and stuff.[00:32:37] Dan Runcie: But I feel like after a while, like that stuff gets old, not old in a way that obviously that is the future, but old into like, okay, you can't just put lipstick on a pig, you actually needed to have something. So yeah. [00:32:49] Milana Lewis: Yeah. I mean, for us, the number one question we ask is why. Why, like, why do you want to do this? Because that'll determine, it's like, if you don't know why and you want to do something because you want to jump on it, you want to understand it. Then we realize that you're still in discovery mode, right? You're still trying to figure out why you want to do it so we can change the way that we approach it with you and take you more on an educational journey versus taking that as directive.[00:33:10] Milana Lewis: And I think it just like being really, again, like, intentional with your client. And you can't do that across thousands and thousands of them, you have to be selective because that's the level of servicing that those people require. [00:33:23] Dan Runcie: How often do you feel like you get a good answer when you ask why? [00:33:26] Milana Lewis: You know, it's a really great question, is that I'm not present in a lot of those conversations. So I'd love to have someone else answer that for you. [00:33:33] Dan Runcie: Yeah, no, that makes sense. And I got to imagine that at the level of artists you're talking to anyway, there likely is some of that built in to begin with. But every artist is in discovery mode to some extent, right? So I get that. Yeah. But yeah, this was good.[00:33:47] Dan Runcie: It was great to recap and just hear how things are going and get a pretty good idea of where things are heading in the future. But what are some upcoming milestones or announcements? What are some things that you can share that we should keep our eyes out for? [00:34:01] Milana Lewis: Oh, that's a good question. When is this podcast gonna be posted, we think?[00:34:05] Dan Runcie: End of June.[00:34:06] Milana Lewis: Cool. Okay. So you'll be hearing about some of the first few labels we're partnering with to power their dashboards and payouts because we're actively developing that right now, quietly with a couple of big players. So we're excited to announce that. Some are independent. Some are part of the major label ecosystem.[00:34:23] Milana Lewis: So pretty excited to get people's reactions on that. The advance is business. The scale product is growing pretty tremendously. So we're going to make some exciting announcements about how we're positioning that moving forward. And then just continuing to keep our heads down and building an expanded team.[00:34:40] Milana Lewis: There's a lot of new, exciting people that have joined us that we haven't talked about yet, but we will soon. [00:34:44] Dan Runcie: Nice, good stuff. Good stuff. Well, Milana, thanks for coming on. This was great. [00:34:49] Milana Lewis: Thanks for having me. [00:34:50] Dan Runcie: Yeah, definitely. And for the people following. They'll know to find you and keep up with everything, but keep up the great work. It's great having you on. [00:34:57] Milana Lewis: Thanks for having me again. And thanks all for listening who made it this far. [00:35:01] Dan Runcie: If you enjoyed this podcast, go ahead and share with a friend. Copy the link, text it to a friend posted in your group. Chat, posted in your slack groups, wherever you and your people talk. Spread the word.[00:35:14] Dan Runcie: continues to grow and continues to reach the right people. And while you're at it, if you use apple podcasts, go ahead, rate the podcast, give it a high rating. And we've reviewed tell people why you like the podcast that helps more people discover the show. Thank you. In advance. Talk to you next week.