Sonomo Review: A New Way for Artists to Fund Their Music

What is Sonomo?

Sonomo is a royalty investment and music distribution platform that connects artists with investors. It allows artists to sell a percentage of their future music royalties in exchange for immediate funding. Unlike loans or advances, Sonomo’s model is structured as an investment, meaning there’s no debt repayment or interest. It also serves as a trading platform, similar to Robinhood, where shares can be traded as they rise and fall in value. What this has the potential to create is a symbiotic relationship between all parties that play a role in the success of a song, but not the benefits of that success. Fans, Radio programmers, Podcasters, Influencers, and anyone else with the ability to move the needle with visibility can invest and reap the rewards of their efforts. 

How Sonomo Works

1. Listing Your Catalog

   • Contact Sonomo to let them know you're interested in selling your royalties 
   • Receive a valuation of what your music is worth based on current streaming performance and market projections over the next 10 - 20 years.
   • Move your releases to Sonomo distribution. 
   • Decide what percentage of your future royalties you’re willing to sell.
   • List specific songs, albums, or entire catalogs on the Sonomo platform

2. Receiving Offers

   • Investors bid on your catalog, competing to provide the funding you need.
   • You can review and accept the best offer that aligns with your financial goals.

3. Royalties Redirection

   • Once the agreement is finalized, a portion of your royalties is redirected to investors. The rest remains yours.

4. Funding Without Debt

   • The funding you receive isn’t a loan; it’s an investment. You don’t have to worry about interest rates, monthly payments, or credit checks.

Key Features of Sonomo

Flexible Funding Amounts

The amount of funding you can raise depends on the historical performance and future potential of your music. Stronger-performing catalogs are likely to attract higher bids from investors.

No Debt or Interest

Unlike advances or loans, Sonomo funding doesn’t require repayment with interest. Instead, investors share in your future earnings.

Revenue-Based Model

Investors take on the risk, so if your catalog generates less revenue than expected, you’re not required to pay more out of pocket. However, if your music performs exceptionally well, investors share in the upside.

Pros & Cons of Sonomo

Pros

• No Debt or Credit Checks: There’s no repayment schedule or impact on your credit score.
• Retain Creative Control: You maintain ownership of your music and control over new releases.
• Risk Sharing: If your music underperforms, you’re not financially penalized.
• Flexibility: You decide how much of your royalties to sell.
• Investors are invested: Everyone who buys a share of your royalties wins if you win, and will work to help you win. 

Cons

• Revenue Sharing: Investors take a percentage of your royalties, reducing your future earnings.
• Dependent on Catalog Value: Artists with less established revenue streams may struggle to attract significant funding.
• You Don't Get It Back: The royalty stake you sell is gone forever. 

Rating

Interest: Great - There isn't any. Credit Impact: Great - There isn't any. Difficulty: Great. Terms: Great - There's no cross-collateralization like there is with record deals. Investors assume the risk; if a release underperforms, you're off the hook. Qualification: Great - The only qualification is having a catalog with at least 1,000 monthly listeners. Interest application: Great - There isn't any. Loan amount: Ok - You're not getting what you need, you're getting what your catalog is worth, so it won't necessarily work as a fundraising tool. That being said, you'll get more than you would from an advance because it's combining the potential of your catalog with its current value over a longer period. Impact on Credit: Great - There isn't any. Impact on Income: Ok - This depends on cash flow. If the revenue from the royalty share you sell is needed to pay for living expenses, the impact could be significant because the money can't be invested without risking having your lights turned off. You can't NEED the money to live. Risk: 3 - You're selling a percentage of your catalog for what it's worth, so you're technically not losing money. There's a chance that you sell low and the value of your music skyrockets, which could leave you with less equity to sell without losing controlling interest. Flexibility: Great - There aren't any restrictions on what you can do with the money. You'll have no debt and no need for any type of debt forgiveness or financial hardship program. 

Final Assessment 

Sonomo is a game-changing platform, and here's why. Investors are invested in the catalogs they buy into. It's like owning equity in a company. The better your music performs, the greater the value of your catalog. Increased royalties is just one benefit of that. Shares on Sonomo are tradable, and the platform tracks the performance of catalogs, keeping investors informed about which songs are surging, bringing in the highest APY, and more. If I buy a share of a song for $1 and the song's streaming activity doubles, the price is likely to do the same. I can continue to collect the royalties I'm owed, or I can sell my shares for double what I paid. Imagine I own a popular playlist, radio show, or Podcast. Imagine I'm a music influencer. Normally, the relationships between artists and people in these positions aren't mutually beneficial. They're lopsided. A popular Podcast features your song, you blow up and make millions, they don't get any of it or benefit from their contribution at all. Sonomo changes that; you win, everyone gets a championship ring.  

The deal only applies to the master recording and revenue from digital service providers. Control over the Publishing and royalties it earns remains in your possession. It's a lot like a record deal where you'd sell equity to a record company, but on your terms. You decide how much of your catalog you're willing to sell, you maintain your freedom, creative control, and control over your catalog. What Sonomo offers differs from platforms that provide artists with advances in key areas. Service providers offering artists advances do so with somewhat predatory terms. Artists face recoupment rates, origination fees, and early termination fees that eat into the funds they're paid. The platforms providing the funding aren't invested in the catalogs because it's a short-term investment, and the ROI comes from the fees. Sonomo has the potential to completely revolutionize the music ecosystem by creating symbiotic relationships between fans, influencers, and artists.