Biddz gives you shares in songs, you get receipts from streaming

Two former Amazon Music managers set up their own distribution channel to ensure artists and fans a share of streaming revenue. Good idea. But is it also worthwhile?

Michael Höweler (left) and Alexander Franck were employed by Amazon’s music streaming service for approximately three years.
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You can invest capital in various ways: in real estate, stocks, art, but also in music. And digitally. Two former managers of the Amazon Music streaming service founded a startup at the end of 2021 that supports users with this type of investment. At the same time, their Biddz portal aims to provide fair remuneration for beginning musicians.

Artists usually earn the most money from concerts and fan gadgets. Streaming platforms like Spotify and Apple Music make little money, but they’re important. Revenues are accounted for according to market share, which is why big musicians earn disproportionately large sums of money. On the other hand, young teams with low visibility are relegated to a few euros. There is no set price, according to media reports in Germany, Spotify’s current redistribution is averaging 0.3 cents per stream. If musicians have contracts with record labels, they also have to give up a large part.

Biddz wants to redesign this distribution. The startup of Alexander Franck and Michael Höweler sees itself as a “distributor”, a kind of intermediate instance between the artist and the streaming service. Singers and bands share shares in songs that are sold to private individuals via the portal. Former Amazon Music executives publish on streaming services like Spotify as well as distribute the proceeds.

Artists get an advance

The founders explain that in the industry it is common for artists to receive advances. Same with Biddz. In the first step, composers share a piece of the song, then fans decide if the song can be successful and want to be part of it. “We divide each song into 10,000 biddz, or 10,000 shares,” says Höweler. The artists themselves determine how many percent they want to keep, how much the participation costs – “biddz” – and how many pieces can be bought.

Biddz / Screenshots

The minimum price is 50 cents per bidz, which the duo recommends especially to newbies. “There is a greater risk here that the investment will not pay off,” says Höweler. Some people charge ten euros per share. For example, rapper Kidnfinity released a single through Biddz, from which he gave up half of the shares. He limited the maximum number per user to 200 bytes, or two percent – so that the song owners would be widespread. After all, the young artist gets an advance of 5,000 euros.

The startup itself collects money and keeps one percent for each down payment. Of the revenue ultimately generated through streaming services, another two percent remains on the tech platform. This amount rises to ten percent after the customer’s shares are redeemed. Since the start of Biddz in late March, it has only happened once, says the founding duo.

Young musicians would do the marketing themselves anyway, explain Franck and Höweler. Platforms such as Tiktok are an important channel in this. Fans who contributed to the songwriting through Biddz often helped to further promote the artists. Because the more the songs are heard on the Internet, the more capital they get. The start-up also offers packages: fans pay around ten bucks for a digital greeting from their team or adding them to the list of close friends on Instagram.

20,000 registered users, but only a fraction pays off

Every week, the Berlin-based company introduces two to four new artists to the portal, almost 40 have already signed a contract with Biddz. The advantage over record companies is that musicians would have to sell less stock, says Franck. Especially since direct sales channel revenues would grow faster anyway.

Over the past few months, 20,000 users have registered. However, only a small part had the opportunity to participate in the song, says Höweler. Popular campaigns are often sold out after just a few hours.

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Biddz can only grow thanks to new customers, and due to low commissions, sales are still weak at the beginning. “The initially low margin is our acquisition tool, it will remain so,” Höweler defends this decision. I don’t want to say how much the startup has earned so far. Pre-financing will ensure the survival of the Berlin company for the next few months. The duo isn’t talking about the sum, but it’s a seven-figure fishing round. There was money, for example, from former Burda board member Stefan Winners, former McKinsey Germany boss Cornelius Baur and Robert Quandt, co-founder of the influential cosmetics group Invincible Brands.

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