Today we’re meeting Linda Portnoff, CEO of Tangy Market – their app unlocks music royalty investments on a global scale – enabling everything from fractionalised ownership to trading of royalties. I was fascinated to read all about what Linda and her team are doing in the industry — but also from the point of view of the underlying FinTech aspect.
Over to you Linda:
Who are you and what’s your background?
I’m a researcher at heart and curious about the concept of value. Music entails both emotional, cultural, and economic values so no wonder I ended up a Ph.D. in accounting and financing with a background as a musician and drummer in the indie pop band Stella Rocket. During my years as an instructor at Stockholm School of Economics I started envisioning a marketplace for music royalties.
The question that spurred this vision was the simple question “what is the value of music”? Who decides on the value of music today? And who should ultimately put a price on music? While the idea of a stock exchange for music royalties may seem capitalistic, it is at the same democratic. We believe in making the capitalistic mechanisms work for the arts while letting anyone invest in music, thereby expressing their idea of value.
In 2022, Tangy Market got a patent for the valuation of music and other cultural assets using machine learning. For the first time ever, we made it possible to value the priceless. By allowing anyone to buy, sell and trade music royalties on our open platform, we advance the research seeking to find a fair, transparent, verifiable, objective price for music.
When a mass market of retail investors on platforms like Tangy Market pay a certain price, at a certain time, for a certain music catalog’s or song’s music royalties, together we solve the valuation quest for music. All while advancing funds to songwriters and artists, music investors on Tangy Market have earned a yearly average ROI of 15%.
What is your job title and what are your general responsibilities?
I am the founder and CEO and manage Tangy Market’s operations.
Can you give us an overview of your business?
A little over a decade ago we started seeing several platforms allowing consumers to back artists directly, but the ancient idea that artists need to be supported and are dependent on someone else’s generosity still lives on in solutions like Patreon or Kickstarter.
Tangy Market solves this by making music investments accessible to the public. Artists become less dependent on a few capital-intensive players and fans and other investors are given the opportunity to actively participate in a market that they themselves support and can benefit from.
Tangy Market is dedicated to unlocking the multibillion music royalty investment market, providing liquidity for creators. We can predict future music royalties and this is extremely valuable to both artists and investors.
Tell us how you are funded?
We have a 74% ownership retained in the founding team, and currently 26 shareholders in the company.
What’s the origin story? Why did you start the company? To solve what problems?
Despite the potential lifetime value of a song, for music creators, challenges arise due to the unpredictable nature of success and the slow cash conversion cycle. Like a bridge over troubled water, Tangy Market allows artists to advance themselves from our marketplace of music investors from over 50 countries.
We transform music royalties into tradable assets and unlock music investments globally by valuing, packaging, and listing royalties on Tangy Market.
While historically only record labels and specialized finance firms have been able to invest in music rights, Tangy Market makes this asset class available to a broader community. We license, value, fractionalize and package music royalties and list them on our market where they can be traded – just like on the stock exchange.
Who are your target customers? What’s your revenue model?
The music copyright market generates $37 billion in annual royalty revenue. The total addressable market for tradable music copyrights is estimated to be at least ten times higher than the present value. Music rights’ low correlation with macroeconomic performance and high income potential have attracted the world’s largest investment firms seeking diversification.
As a two-sided marketplace, on the one hand we serve music copyright owners to faster funding, on the other hand we target retail investors who are seeking uncorrelated returns from music as a new asset class.
We make a commission out of trading.
If you had a magic wand, what one thing would you change in the banking and/or FinTech sector?
We strive for the financial markets to be more inclusive and sustainable. We have already made the financial markets sing and dance by allowing them to tap into the uncorrelated, steadily growing passive income from music rights that is soaring in the streaming economy.
Let’s not exclude the retail investors and developing markets like Africa for example from earning a return from the one asset they have cultivated since the beginning of time – music.
What is your message for the larger players in the Financial Services marketplace?
David Bowie once said:
The future belongs to those who can hear it coming.
Collaboration between larger players with financial muscles and innovative entrepreneurs with their ears against the rails have always been present in the music industry. The fintech sector can learn from this example.
Where do you get your Financial Services/FinTech industry news from?
Newsletters from actors in the sector bring the most up-to-date news. Stockholm Fintech Week brings the community together once a year, and this is a great networking opportunity that I very much appreciate.
Can you list 3 people you rate from the FinTech and/or Financial Services sector that we should be following on LinkedIn, and why?
- Lana Brandorne, Investor at Goose Valley Ventures and co-founder of Stockholm Fintech
- Niklas Nelldal, CTO at Tangy Market
- Johan Bynelius, founder at Investmentbolaget CAMP-B
What FinTech services (and/or apps) do you personally use?
- Nordnet Bank AB – stock investments
- Tangy Market – your favourite music investment app
What’s the best new FinTech product or service you’ve seen recently?
- Swish! I use it every day. Only available in Sweden.
Finally, let’s talk predictions. What trends do you think are going to define the next few years in the FinTech sector?
You’re likely aware that top investment firms like KKR and Blackstone are heavily investing in music rights. The reason? Music is a unique, uncorrelated asset class with annual revenue growth of 7-8%.
We will see this investment trend spreading into the retail sector in the next coming years.
Thank you so much for taking the time to participate, Linda – it’s been really refreshing to learn more about another aspect where FinTech is helping to connect and power other industries such as Music Royalties.
You can find out more about Linda directly on her LinkedIn here: Linda Portnoff and her company Tangy Market is online at https://tangymarket.com/.
