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Lior Tibon Shares How Duetti Is Reshaping Music Rights | Billboard
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00:00Hi, I'm Elizabeth Diltz-Marshall. I'm Billboard's Senior Finance Correspondent, and I'm here today with Liora Thibon, CEO and co
00:08-founder of Dueti.
00:10Dueti is one of the fastest-growing companies that's working with independent artists to buy up their music rights, masters
00:18and publishing, and promote their music.
00:21Thanks for joining us.
00:23Thank you for having me.
00:24So, Dueti is often described as a music catalog company, but there's a big difference between a Dueti and Harborview
00:33Equity Partners, or a recognition, and not just because you're buying different kinds of music.
00:38So, would you encourage people to think of Dueti more as in the line of, like, belief?
00:44Well, that's a great question, and I do get it a lot, and I often find myself trying to explain
00:49the difference.
00:50So, Dueti is a company. We're not a fund.
00:53Some of the examples you mentioned and others, they're financial funds.
00:58What's the difference?
00:59The difference is that the money that we raise, and in particular the equity money that we raise, sits on
01:06our balance sheet for the long term.
01:08There is no expiry date for that money.
01:10And therefore, we have more leeway to invest in infrastructure and to try and improve the rights that we own
01:20over the long term.
01:21So, I think that's really the key difference between what we do and some of these catalog funds that you've
01:27mentioned.
01:27For example, we have right now close to 80 people in the company.
01:32That's a pretty significant infrastructure that we're building, and the only way that we could do that is by raising
01:39money on balance sheet for the long term to support kind of the team and the ongoing growth of the
01:44company.
01:44We haven't even talked about the music that you own.
01:50I've had the pleasure of talking to some of the artists whose music you acquired recently, but share some of
01:55their names.
01:56They're not necessarily household names the way maybe like some other funds have acquired.
02:02Yeah, they're not, but they're still pretty significant artists, right?
02:08And so, an example that I always like to give is Roland Garcia.
02:12He's an artist from Mexico.
02:13He has, I think, over 12 million monthly listeners on Spotify only every single month.
02:21He's touring, he's out there, he's doing amazing things, he's keep creating, and, you know, we own part of his
02:31catalog, both on the master side and the publishing side, right?
02:34And so, whenever I sit with folks, particularly people here in the U.S., right, and, you know, the kind
02:39of, the conversation is, okay, what type of music do you own?
02:43Well, yeah, probably a lot of the folks I'm speaking with, especially if they're investors of a certain age, they
02:49would not be familiar with Roland's music.
02:52But a lot of people in Mexico or Mexican-Americans that are maybe younger demographics probably know who that is,
03:00and especially if we play some of his songs.
03:02And so, the bottom line is that the music that we have, they're not the household names, you know, just
03:08a few weeks ago, right, we saw in the press that Britney Spears saw the rights.
03:13And so, these names are really big household names.
03:16That's not what we do, but we do work with artists that are very, very significant and have a lot
03:23of traction.
03:24And the final point, I would say, we also work a lot with emerging talents, right?
03:28We work with folks that started out over the last few years, maybe they've, you know, they've achieved some level
03:35of commercial success,
03:36and they really are working with Duetti to kind of put kind of more fuel on the fire and allow
03:41them to produce more music.
03:43So, Duetti just released its 2025 Music Economics Report.
03:47You had findings sort of like this, like we're talking about right now, very specific findings like if an artist
03:55wants to release a hip-hop song,
03:59they should do so in the spring.
04:01It does, you know, significantly better.
04:05A track that's in country or Christian does best when it's released in the winter for whatever reason.
04:11Tell me a little bit about the technology that lets you uncover those types of specific actionable findings and what
04:21people should do with that.
04:23Yeah.
04:24And so, I mentioned earlier, we have 80 people.
04:28Roughly a third of our folks are really on the data and engineering and data science teams, and that's what
04:34they do all day long.
04:35And so, they're looking for statistical models, we're applying machine learning, we're applying AI in huge volumes of streaming information,
04:47of social media information, of financial information, whether it's terms that we own, whether it's information that we can kind
04:54of find online.
04:55We also work very closely in collaboration with Luminate, with Chartmetric, and with other music data companies
05:01in order to kind of harvest them and make sense of all this information.
05:06To answer your question directly, the reality is it's a lot of trial and error, right?
05:13Like, it's not kind of, let's look at the data and see what we find.
05:20It's more, let's run a lot of different experiments, particularly on the marketing side, of different hypotheses,
05:27and see whether they play out and whether you can kind of prove them or not.
05:33That's really our approach.
05:34Our approach to the marketing is a more classic performance marketing approach.
05:39So, it's more to run a lot of different experiments at the same time and then double down on whatever
05:45we see a signal that wants.
05:46Given that Duetti acquires music that is younger, you know, as young as, as recent as released two years ago,
05:55do trends change quickly?
05:58So, for example, one of the findings in the economics report that you just released was,
06:05correct me where I'm wrong,
06:08an artist can, like, increase, like, by 18% their per-track annual streaming revenue
06:15if they release more frequently, as frequently as three tracks in a year or, like, an album every year.
06:22You know, is that advice artists can take forward to 2026?
06:27Might it change even as soon as 2027?
06:29Yeah, I mean, I think the data points that we've seen, I don't think they're super new.
06:35I think there are things that have been out there and we're kind of packaged them and kind of put
06:40a finer, finer point on them.
06:42And so, I don't think it's going to change a lot next year.
06:46I think that's just something that we observe and we kind of wanted to highlight.
06:51And as it comes to the advice, look, I think I always tell folks that talk to me,
06:56first and foremost, you know, artists need to make, to do what makes sense for them, right?
07:01Like, it's very easy for us to sit here and kind of look at the data and come up with,
07:06like, a list of tips.
07:07Crank out an album a year.
07:08Right, right, exactly, right?
07:09But, like, ultimately it's about the music and it's about your artistic creation.
07:15And so, that's the most important thing, right?
07:17Like, if you're doing something that doesn't really make a ton of sense to you,
07:21I think that will show and that's going to, it's not going to land well with your audience, right?
07:28So, that's really the first layer.
07:30The kind of the data that we're surfacing and the point of views that we're putting out there
07:34are really geared towards informed, better decisions around that core artistic creation that folks are focused on.
07:42Coming back to the artists that work with you, what makes a song rise to the level that duetti analysts
07:50pick up on it?
07:51For example, you know, is there a threshold that a song has to reach on YouTube before you make an
07:57offer?
07:58There is.
07:59So, what we say publicly and to anyone who asks, we really have two key criteria that we're putting out
08:06there
08:06if folks want to kind of approach us or we're approaching people and trying to have a conversation.
08:12Number one is age.
08:14The track has to be at least two years old.
08:16That's really important for us because that has provided us with some initial level of information
08:23and some proof of commercial success so we can engage with you constructively.
08:28The second point is the volume of streaming which is, of course, an approximation of revenue
08:35and so what we're saying is that you really need to have in a year at least half a million
08:40streams
08:40across all platforms, not just YouTube.
08:42So, it can be across, you know, Spotify, YouTube, Apple, Amazon or whatever other platform that you use.
08:48These are really the two key criteria.
08:52Once someone satisfies those two criteria, in theory, in most cases,
08:58we should be able to engage with them and potentially to come up with a proposal if they're interested to
09:04pursue.
09:05And how much does an artist typically make off a deal with Duetti?
09:09Yeah, so look, it's a very broad range and it can go anywhere from $10,000 to $10 million and
09:16anywhere in between.
09:17The truth is that the majority of the artists that we do deals with are probably in the five-figure
09:22or six-figures.
09:23But we do do a lot of seven-figure deals as well and every month there's a bunch of them
09:28also, so it really varies.
09:31Every month. We haven't even talked about how much. I said you were fast-growing, but tell us how fast
09:35-growing.
09:35We are growing very fast, and so just recently we said we're doing over 80 deals every single month.
09:43And we've done deals with over 1,100 artists and songwriters, right?
09:48And so we are growing very fast.
09:51The pace of deal-making is well over double what it was a year ago.
09:55And we think we're going to continue, and we're seeing, we don't see any breaks on our growth this year.
10:02I have to ask, with that many transactions going through the doors, that often, have you ever had an unhappy
10:08customer?
10:10You know, not really. Nothing that I can kind of come up with.
10:17I think the key for us...
10:18Yeah, so I think one of the most important decisions we made very early on, which was pretty difficult to
10:27make,
10:27is that we were very focused on structuring our deals in a very straightforward way.
10:34And what do I mean by that?
10:36Number one, you do the deal with us if you so choose, and you really don't have to do another
10:44deal with us ever again.
10:47And so we're shying away from what I think most music companies do, which I don't like.
10:54Five-year arrangements, seven-year arrangements, rights of first refusal,
10:59all these different type of things that I think artists sign up to when they kind of just want to
11:04get something going.
11:06And then they end up in a very long-term scenario that they always need to go back and ask
11:10for approvals,
11:11and so on and so forth, right?
11:14And so I think by making the determination that it's one deal, and that's kind of it,
11:21and it's up to us to go back to you and trying to convince you to walk with us again,
11:25and many do.
11:26Many do come back and do a second and third deal, and even more than that.
11:30I think that creates a much healthier relationship that our industry is not used to.
11:35So I think that's the first thing.
11:37The second thing, the deal itself is structured in a very simple way.
11:43It's a sell.
11:44There's no recoupment.
11:46There are no loans, no advances, no buyback clauses that sometimes is, you know, people, maybe some would have liked
11:54to have.
11:55But I think that that makes the discussion maybe a little bit more difficult because it's very direct and very
12:02transparent.
12:02But it's also, I think, very clear.
12:05And so what would not happen with us, I think, and hasn't happened to your question on kind of the
12:12relationship for sale,
12:15we haven't been in a situation where someone came to us after, oh, I did not understand what I'm signing
12:21up for,
12:23which we're hearing in this industry all the time, right, for artists that are doing this with labels and other
12:30companies.
12:31And I think that, again, put something at the core of the relationship that we have with artists and songwriters
12:38and other creators
12:39in a very healthy, transparent way that does project on kind of the going forward relationship.
12:44A little over three and a half years, Dueti has raised over $600 million in financing.
12:49This includes $100 million in equity financing from investors like Rain Group and we mentioned Roc Nation, Flexpoint Forward,
12:57Nika Partners and Viola, and also over $200 million from the ABS markets.
13:04This always gets difficult to explain, but the asset-backed securities market, the debt markets,
13:10have become a popular place for music companies to go to for very affordable financing lately
13:18because they're securitizing music rights the way companies, insurance companies, healthcare companies,
13:26all kinds of mortgage companies have securitized rights for decades now.
13:31Every other music company that has done this, though, has done it with older songs
13:36that have decades of streaming data to study that often are also well-known songs or are by well-known
13:46acts.
13:47Dueti was the first to do it with newer music in this vein from independent emerging artists.
13:53What does it say about the industry, about the market appetite,
13:57that you were able to do that now twice successfully?
14:00Yeah, it says that the industry is evolving and investors are getting more and more educated
14:04on what it means to invest in music and how do you value and approach music rights.
14:09I recently came back from the annual securitization conference that happens in Vegas every year.
14:16That's my third time going.
14:18And it was every year that I go, there is so much more interest by ABS investors, debt investors, into
14:27music.
14:27I think they like the fact that music is what is called uncorrelated asset class.
14:35And in simple terms, it means that the financial trends in music has typically nothing to do
14:42with what's happening in a broader economy.
14:44In other words, in good times and bad times, people still listen to music.
14:47They keep their streaming subscription.
14:49And so music doesn't get disrupted if the economy goes up or goes down that much.
14:55And that provides a lot of the diversity which they're looking for, right?
14:59A lot of these investors come from insurance companies and pension funds.
15:03And so they want to ensure they have a very diversified pool of positions.
15:07And so whatever happens with the economy, they are protected against that.
15:14And the other point I want to mention is that music is still a small, small piece
15:19of the securitization market, which is enormous.
15:22And so there is more understanding by investors into what we're doing.
15:28And I also think there is a lot of demand for more music companies to come up and securitize.
15:34And I do think we're going to see a lot more names over the next couple of years,
15:38new names coming to the market, whether they're companies that specialize more
15:43in kind of the A-list kind of household name catalogs, or also companies that come
15:49from maybe closer to what we do, maybe not exactly what we do,
15:53but maybe they do distribution services or maybe they do advances.
15:57And ultimately, by repackaging everything, they are going to be able
16:01to also approach the ABS market.
16:03Yeah.
16:04There is definitely still just a small, cool kids' table.
16:07Yeah.
16:07For the music esoteric debt at these structured finance conferences.
16:13But to your point, CSAC did a whole business securitization last year.
16:20You probably will tap the debt markets again, right?
16:23That's right, yeah.
16:24To what end?
16:24You know, what is it used for?
16:26You've talked about how the equity financing is used for your operations expenses
16:32to hire people, to grow your staff and your platform.
16:35Yeah.
16:35Where does the ABS money go to?
16:38The ABS, the funds that we get from the ABS markets allow us to go
16:43and continue to buy the catalogs, right?
16:46And so it's a very efficient source of funding for various reasons.
16:51Number one, it's cheaper.
16:52And so the interest rate is lower than what you would get if you go to one investor
16:57on a private basis and kind of get financing from them.
17:03And then secondly, it's a very liquid source of financing, meaning that there is a lot of it, right?
17:09So us, we're still kind of a small player even in the music context.
17:14And so we have just over $200 million of debt outstanding.
17:18But, you know, when we get to many hundreds of millions, when we get to potentially billions in one day,
17:24it's a lot more helpful to be tapped into that market versus walking on a bilateral basis in kind of
17:31the private debt markets.
17:32We talked about how this is, that you were the first to do it with newer songs.
17:37Part of that is that you have to persuade investors to be comfortable with songs that have a shorter track
17:45record of data to study.
17:49How did you approach that?
17:50How did you convince people to get comfortable?
17:52First of all, we're showing them a lot of statistical analysis that we do.
17:56And so you do need to have very robust methodologies, complicated models that really show a lot of different cuts
18:05of the information
18:05and compare, you know, different cases and to show people that you know what you're doing
18:10and you're sifting through the information in a way that makes sense.
18:13The second point that I always explain investors that don't really understand the music industry
18:18and they're maybe newer to music, I always go back to the fact that every stream on average is worth
18:26around a third of a cent.
18:28So what does that mean?
18:30It means that even if you have a relatively small catalog, right?
18:35So let's say a catalog that is backed by $10,000 of annual cash receipts,
18:40that number, and even if it's, to your point, only for a couple of years,
18:46that number, that $10,000 over a two-year period is based on millions and millions of data points
18:53and millions and millions of people listening to that music.
18:57And so you do have a lot of information that you can use and analyze and detect trends, right?
19:02And I think taking a step back, talking to these debt investors,
19:08I think there are very, very few cases in the broader economy
19:12where you can provide debt against a $10,000 cash flow stream
19:17that is really backed by millions of data points.
19:20And so in a way, a music investment is pretty secure if you think about it, right?
19:26Like you compare that to a car loan.
19:28Houses or car loans.
19:30Right, like you're really depending on the behavior of one individual, right?
19:34Whether they keep their job, whether they keep their payments on time.
19:37And in music, $10,000, you're depending on behaviors of millions of people, right?
19:42Let alone if it's $100,000 and up.
19:46And so it's a very, very different dynamic,
19:48and ultimately I think that's what provides confidence to people.
19:52Interesting.
19:52It's hard to have a conversation at any point these days without discussing AI,
19:57especially in the context of intellectual property and music.
20:03Does AI pose a threat to the value of the songs in your portfolio?
20:08On balance, my answer is no.
20:11We look at it fairly positively.
20:13We think that's going to, over time, create new ways to exploit music,
20:18to interact with music.
20:20And so we think it will extend the intellectual property,
20:23and we think that it's actually a revenue opportunity in the next few years.
20:27And so we're pretty excited about that.
20:29I think it always takes time for the music industry to adjust
20:33and to figure out the right mechanisms and coordination
20:37of how to track usage and how to pay.
20:41But we're part of that, right?
20:43And so that's what we're observing is happening now.
20:47But as I look through it, I think we're going to be able,
20:50as an industry, to navigate it successfully.
20:52Is there something, I kind of know where I'm going with this,
20:56but what's one thing about the music industry that you would change if you could?
21:01How much we spend on lawyers?
21:02How much we spend on lawyers?
21:03Yes.
21:04I mean, I do like my lawyers.
21:05I have many of them, and I like you all.
21:08But yes, I think the legal bills that we all pay are too high.
21:14Yes, we did talk about it.
21:17And one of the biggest conversations we had, Chris and I,
21:21when we started the company a few years ago,
21:24I remember we actually compared what we're trying to do to,
21:30if you're familiar, and I think we spoke about it as well,
21:33in the venture industry, a safe note that Y Combinator went up with, right?
21:38That was, I think, well over 10 years ago.
21:42But the idea is that not every venture deal for $200,000
21:47or even $2 million needs to be extremely complex,
21:50extremely bespoke.
21:52You're talking about startups, younger companies.
21:55Let's just have a template that everyone is looking at,
21:58everyone is confident with, to provide that certainty
22:01and use that at least at the beginning.
22:05And that's a little bit what we're trying to do with Dewey, right?
22:08We're trying to come up with simplified legal structures
22:11that are not going to require for every single deal,
22:15especially if these are smaller deals in terms of just the overall size,
22:18to spend an exact amount of money on legal fees, right?
22:24And I think this is something that I wish others in the industry will adopt
22:29and will just make everyone's life a lot easier.
22:33It was a pleasure talking to you.
22:34Thank you very much.
22:35Thank you very much.
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