It’s been 10 months since MBW reported on the initial beta launch of Corite – a Stockholm-based platform that allows fans to invest in an artist, and reap returns on that investment via an agreed percentage of the same act’s future streaming income.
What’s Corite been up to in those 10 months? Gradually building towards a public launch, which arrived in Europe in April, as well as proving the concept of its company.
After launching in beta in Sweden in October 2019, Corite ran over 25 artist campaigns that raised over $30,000 during its pilot period. Thousands of fans invested in artists via the platform during this beta period.
What’s more, Corite raised additional seed funding for its public launch, while welcoming Charles C. Adams as a backer. Adams is a former US Ambassador to Finland, as well as a member of the National Finance Committee of the 2008 and 2012 Barack Obama presidential campaign.
“Fan-funding of music can create a truly democratic playing field for creators, empowering even more artists to make a living and for fans to share success in the new era of music,” Adams tells MBW.
In a nutshell, then, Corite is a digital distributor for independent artists, but one that also allows fans to purchase a slice of an act’s future royalty income.
The concept of ‘fan investments’ isn’t an entirely new idea. The German company Sellaband tried it after being founded in 2006. It raised $5m and worked with the likes of Public Enemy, but ultimately failed as a business, going bankrupt in 2010.
In the latest MBW Podcast (listen below), we put this fact to Corite’s co-founder and CEO, Mattias Tengblad, who posits a simple argument Corite’s model is going to succeed where Sellaband failed because we now live in a streaming-dominated era, as opposed to an era when ‘making it’ as an independent artist was more fraught with obstacles and expense.
“The biggest difference from that time to now is that the digital development has moved on very fast, meaning that there is a lot more revenue coming in,” he says. “The other factor which is apparent is that, compared to that time, the independent [artist] market is growing at a fast pace.”
“I believe that the right artist could probably [raise $1m on Corite] this year.”
Mattias Tengblad, Corite (pictured)
Tengblad points to the high rate of independent artist success in Sweden, before speculating that Corite believes it can help “the billions” (i.e. the fans) “help the millions” (i.e. the artists) to raise significant capital in the future.
How significant? At one point on the podcast, we challenge Tengblad on when he expects an artist, working with Corite, could raise a million dollars on its platform. Cool as you like, he tells us: “I believe that with the right artist, we could probably do that this year.”
Startup bravado or sensible Swedish prognosticating? His fuller explanation leans towards the latter.
“Imagine Justin Bieber, or an artist of that kind of size, [using Corite],” says Tengblad. “Without checking the Instagram right now, he probably has around 100m followers on Instagram [not far off; it’s currently 138m]. So it’s quite likely that he would be able to at least gather 100,000 people to support his [Corite] campaign – that’s not a crazy amount of people if you have 100m followers.”
If those 100,000 people spent $10 or $20 each, reasons Tengblad, then our hypothetical Justin Bieber would raise an amount of money (i.e. between $1m and $2m) that would be “competitive with a traditional big advance from like a traditional label”.
You can listen to the MBW Podcast with Mattias Tengblad above, or on Apple Podcasts, Google Podcasts, Spotify, Stitcher, iHeart etc. via this link.
Here’s where things get really interesting. Tengblad knows all about the workings of a “traditional label”, because for a decent chunk of his career, he worked at one. In fact, he made moves that would have a large influence on the future of the largest major record company of all.
That major was Universal Music Group in Sweden, where Tengblad worked for five years – first as New Business Director, then Commercial Director – before leaving in 2013. During his tenure, Spotify launched in the Swedish market, and Tengblad (alongside Corite co-founder Emil Angervall) launched Digster, still UMG’s flagship streaming playlist brand to this day, in addition to Spinnup, the Universal owned and operated DIY distribution platform that rivals the likes of TuneCore.
With his million-dollar-Justin-Bieber-level ambitions, is Tengblad now looking to cause his old bosses headaches?
“Well, I would say if you manage a big business in any kind of industry, you always need to sort of watch out for new stuff that comes up,” he replies. “But I would also say the big [companies] in music have been very adaptive to what’s happening in the market.”
That being said, at one point Tengblad does predict that that, in the next five to ten years, “probably more than 10%” of the total global recorded music industry will be “funded in an alternative way” – i.e. outside the traditional label system.
He suggests that there will be “millions of artists making a decent amount of money, every single month and year, from streaming services all over the planet” and that these acts will “need structures like Corite to be able to finance all these projects”.
You can listen to the MBW Podcast with Mattias Tengblad above, or on Apple Podcasts, Google Podcasts, Spotify, Stitcher, iHeart etc. via this link.
Since launching publicly, Corite has seen particular success with the Irish artist Jordan O’Keefe, whose project is on course to beat his campaign target in just a couple of months. Tengblad says O’Keefe’s story, and others like them, are just the beginning for Corite and the fan-funding model; more specifically, in fact, the fan investment model.
We ask Tengblad about Spotify’s recent decision to enable fan ‘tipping’ of artists on its service – to some degree, a rival idea to Corite’s model, but one which doesn’t bring the ‘tippers’ any form of return on their payment.
“[The success of] services like Patreon and others shows [the] interest of people actually wanting to spend money on artists,” he says. “But I believe investing is more fun because you have the potential upside, and that makes you more engaged.”
“quite a few artists, even the smaller ones, don’t like the idea of ‘begging’ for money – that’s not why they’re in this.”
Mattias Tengblad, Corite
Tengblad also discusses the difference in appeal for artists when it comes to asking their fans to invest in their music, versus asking them for virtual ‘tips’.
Says Tengblad: “It’s definitely a [different] ‘sell’, and that’s really important because quite a few artists, even the smaller ones, don’t like the idea of ‘begging’ for money – that’s not why they’re in this.
“And there’s another aspect [why artists might] choose this financing [option], which is actually we’re funding music – we’re not financing, you know, special treatments, the free foot massage at the hotel room, the extra supersize books or whatever else you can come up with, that [artists] try to sell [for supplementary income].”
He adds: “We are focusing on the music, as a way to invest in the core art of the artist. That’s the beauty of Corite… you’re invited to invest in the song, and the performance of the song in the streaming environment.”
You can listen to the MBW Podcast with Mattias Tengblad above, or on Apple Podcasts, Google Podcasts, Spotify, Stitcher, iHeart etc. via this link.
