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

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

Sonomo is an innovative investment platform designed specifically for music professionals, offering a unique way to secure funding by selling a portion of your future royalty income. This approach allows artists to raise capital upfront without taking on traditional debt or signing restrictive record deals. Here’s an in-depth breakdown of how Sonomo works, its pros and cons, and whether it’s the right funding option for you.

What is Sonomo?

Sonomo is a royalty investment 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 schedule or interest. Instead, investors earn a return based on the royalties your music generates over time.

This model is particularly appealing for independent artists and labels looking for funding without the constraints of traditional financing or label contracts.

How Sonomo Works

1. Listing Your Catalog

   • Artists list specific songs, albums, or their entire catalog on the Sonomo platform.
   • You decide what percentage of your future royalties you’re willing to sell and for how long (e.g., 5 years, 10 years).
   • Investors review your historical performance data (e.g., streaming revenue, downloads, and other earnings) to assess the potential value of your catalog.

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 the investor for the agreed-upon term. 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.

Sonomo Example: How It Works

Sample Scenario:

• Catalog Value: Your catalog earns $10,000 annually in royalties.
• Percentage Sold: You choose to sell 30% of your royalties for the next 5 years.
• Funding Raised: Investors agree to pay $12,000 upfront for the rights to 30% of your royalties during the contract term.
• Investor Returns: Investors receive $1,500 annually (30% of $10,000) over 5 years, totaling $7,500.

In this example:

• You receive $12,000 upfront.
• You retain 70% of your royalties.
• Investors earn a return on their investment based on your catalog’s performance.

What Happens If Your Catalog Underperforms?

One of the advantages of Sonomo is that investors share the risk. If your catalog earns less than expected, the investor receives less, and you’re not required to cover the shortfall. This makes Sonomo a less risky option for artists compared to loans or advances with fixed repayment obligations.

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 and for how long.

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.
• Long-Term Impact: Selling a portion of royalties for several years can limit your income in the future.
• Uncertain Returns for Investors: If your catalog performs exceptionally well, investors share in the upside.

Is Sonomo Right for You?

Sonomo is ideal for artists who:

• Have a proven track record of consistent royalty income.
• Need immediate funding for specific projects (e.g., marketing campaigns, recording an album, or touring).
• Want to avoid the debt, interest, and credit impact associated with loans and advances.

However, it’s important to weigh the long-term implications. Selling a portion of your royalties means giving up a share of future earnings, which could be significant if your music performs well over time. Carefully evaluate how much funding you need and whether the trade-off is worth it.

How to Maximize Sonomo Funding

1. Boost Your Catalog Performance: Before listing your music, focus on improving streams, downloads, and other revenue sources to make your catalog more appealing to investors.
2. Negotiate Smartly: Don’t rush to accept the first offer. Compare bids to ensure you’re getting the best deal for your catalog’s potential.
3. Plan Investments Wisely: Use the funds to invest in high-return activities, such as advertising, new music production, or expanding your audience through touring.

Conclusion

Sonomo is a forward-thinking platform that empowers music professionals to raise funds without taking on traditional debt. By selling a portion of your future royalties, you can access capital for growth while retaining ownership of your music. However, it’s crucial to balance the immediate benefits with the long-term impact on your earnings.

If you’re an artist or label looking for funding, Sonomo might be the right fit—especially if you have a catalog with proven revenue and a clear plan for using the funds. Stay tuned for more insights in our funding series, where we’ll explore other innovative platforms and financing options tailored to the music industry.