Introducing… Recoup Rules
Below is an article originally published on August 26, 2021. Go to Stem Disintermedia's company page on PowerToFly to see their open positions and learn more.
Managing an artist is no small feat, especially when you’re doing the job of a label. Props for investing your time AND MONEY towards A&R, production, marketing, and everything else necessary to put out the best possible record. We believe you shouldn’t have to worry about how you’re going to recoup those costs or how all the collaborators are going to get paid their share of the profits. We’ve loved seeing your excel sheets and creative configurations of Quickbooks, Xero, Venmo, etc but we know you didn’t get into this business to do the accounting. We’re here to take that off your plate now…
Enter Recoup Rules, a new simplified way to track and recoup your expenses before the splits are paid out.
So, how does it work? When you set up a Recoup Rule, you tell Stem the total recoupable amount you have fronted and Stem will divert sound recording earnings from releases to recoup those costs. For example, say that you have fronted $20,000 for a music video and other marketing expenses. Stem will now make sure that you get paid back first. Once you’ve recouped that $20,000, any additional earnings go into a reserve account for review. If you have additional expenses to support marketing, you can raise your total recoupable amount. Or if you’re done there, you can close the rule and Stem will pay shareholders according to the splits you’ve set up. You’ll also be able to:
- Recoup across multiple releases
- Recoup from external earnings such as sync, physical sales, vinyl, publishing, etc.
- Provide shareholders with monthly recoupment updates
- Control when recoupment ends and splits are applied to pay out royalties to your shareholders
Getting paid back has never been easier! To begin a Recoup Rule you simply enter the total recoupable amount (this can be increased later), select the releases that you will recoup from and then start your rule! That’s it.
Now… we know what you’re thinking.
What if I have other revenue sources I’m recouping from? Stem has got you covered with our “Add Other Earnings” feature. Any Stem Direct member using Recoup Rules can add earnings outside of Stem to pay down the total recoupable amount. We can’t pay out earnings generated outside of Stem (yet) since the payment went to you directly, but we can include it in the running total so you and your shareholders have visibility into the income and status of the project.
Not only do Recoup Rules ensure that you get paid, but they also alleviate the burden of having to report to your shareholders. For the first time ever, your producers, songwriters, artists, featured artists, etc can see exactly the status of the recoupment when they log in to their own Stem account. By visualizing the recoupment status on Stem, everyone knows just how much is unrecouped and can anticipate when they’re going to get paid without having to bug you about it. Say goodbye to those awkward “Where’s my money???” texts! We’ll make sure everyone’s bag is secured.
Our goal is to get you out of those spreadsheets and back in the studio. We want to help you stay focused on the creative and strategy and we’ll do the math. Recoup Rules brings us one step closer to becoming the platform that you trust to get everyone paid.