Photo Credit to linkedin.com Article by Diontay Santiago
With the emergence of the era of social media, artists have begun to utilize their own platforms for marketing and promotional purposes. This has encouraged the trend in artists remaining independent of record labels and collecting their own royalties. With the conversation surrounding royalties and ownership being introduced to the general population thanks to social media, more people have raised questions about what they are and how they can invest in royalties themselves. Vezt is an app that introduces new investors to the concept of royalties, how to invest in them, and makes these investments accessible to the common person from all income levels. Does the app do this effectively though?
First, let’s discuss what royalties are in relation to the music industry. Simply put, music royalties are payments to the individuals who own a song. Everyone who owns a piece of the music gets compensated for its licensed usage. Vezt relies on the contributions of multiple micro investments that come together to purchase a piece of the rights to a certain song. They call this an ISO, Initial Song Offering. Once enough money is raised to obtain a percentage of the royalties a song collects, these royalties would then be split among the multiple investors. Analytical tools within the app also allow investors to track how well the investment is performing. The number of streams a certain song gets are monitored by the app and are beneficial in determining whether or not you will get a satisfactory return on investment. This is all done through block-chain technology, which many cite as probably being the future of currency and finances.
Photo Credit to medium.com
Aside from financial incentives, this app allows a more intimate connection between artists and their fans. Fans can provide funds and support for their favorite artists while receiving royalties for the work that they support. This transforms the average fan from mere consumer of the art to an owner. The catalog of ISOs ranges from contemporary hip-hop songs by popular artists like Swae Lee or classic R&B by legendary singers like Mariah Carey.
Although it sounds amazing in theory, does it work in practice? How long does it take to see returns on an investment you would hypothetically make using Vezt?
According to Vezt, Royalty payments can be expected “anywhere from 3 to 18 months after they are received by PROs, publishers and labels” and “All Vezt ISO purchasers are paid within 30 days of Vezt receiving these royalties from the PROs, labels and publishers.” However, these times can also vary depending on the type of royalty it is. Songwriter royalties tend to be distributed quarterly, publisher royalties tend to be distributed semi-annually, and master rights tend to be distributed either quarterly or semi-annually.
Although this is how the company claims royalty payments are distributed to those who invest through their platform, a bit of research shows that many people have not received payments in timely manners and have had little support in finding where their money is. A simple gander through reddit can reveal that many people believe they have gotten scammed! A Reddit post from as recently as a month ago highlights the concerns one person has after not receiving royalty payments since their initial investment in 2018.
Photo Credit to reddit.com
In addition to concerns over collecting royalty payments, Reddit users have complained about the security of the app in relation to the accounts of the people who use the platform. Apparently, a bug that allows you to sign into any account is present and could pose a serious financial risk for anyone who uses Vezt. There’s even a bug that prevents users from changing their passwords, as well.
This app could have been amazing, in theory. The concept of providing fans with the opportunity to engage in the financial side of music while supporting their favorite artists and getting paid for it seemed great. The execution of the concept failed unfortunately. Investors were not properly compensated, supported, or secured through the Vezt platform. Although it seems as though the app is failing, hopefully the company can rectify the issues they have. I think it is important to find creative ways to give people access to participation in financial markets, and Vezt can potentially be a leader in that field if things go well.
Check out the app for yourself here.