Lior Tibon
Lior has short brown hair, fair skin, brown eyes and is wearing a white button up shirt with a denim jacket on top. he is standing in front of a white wall and smiling.
Welcome to the second VMDO Spotlight interview! VMDO Spotlight is a new series that we are launching to highlight and connect homegrown and global music industry experts in the form of interview-style articles.
On 17 May 2023, VMDO had the pleasure of interviewing Lior Tibon, CEO and Co-Founder of Duetti, a new startup whose mission is to provide a wide range of musical artists quick and easy access to catalogue sales.
In this conversation, Lior shares insight into his personal and professional journey, which included entering the music industry after working as a banker and becoming an industry executive at TIDAL and Roc Nation, to how Duetti works together with artists, and the insulation of music in the fintech landscape.
Could you tell us about your career path, your finance background, and what drew you to working in music? How did you and Co-Founder Christopher Nolte meet?
I was born and raised in Tel Aviv, Israel. I left 17 years ago, spent 10 years in London, and the last seven years in New York. I started my career in finance as a banker at Deutsche Bank on a fairly traditional investment banking route, working on mergers, acquisitions, and debt financing, and worked on a number of music deals I’d been assigned to.
I developed because music was a very niche industry at that time; it was before Spotify really took off. Music was doing really poorly from a financial perspective, so it was a very different industry for a banker to get involved in.
Through that, I started to get to know folks in the space and was introduced to Roc Nation – Jay-Z's music company – as they were looking for people to come and help set up TIDAL. I joined to help set up the initial infrastructure, and I stayed for over seven years. I was the COO and led the business day-to-day. I have seen a lot of interesting things. I had a front-row seat into the evolution of music streaming, especially in the US. We started TIDAL even before Apple Music existed. Spotify was already going strong in Europe, but it still hadn’t fully established itself in the US, so it was a very interesting time to be in music streaming.
Christopher Nolte and I knew each other from TIDAL. He worked with me on the business development side, and he then moved on and worked at Apple Music for a couple of years. When TIDAL was sold to Block, it became apparent to me that it was time to move on, and this concept for Duetti had been sitting with me for some time, because it’s just so obvious to me that it's something that is needed.
We started to converse and align with each other on how we view the world and the potential of this idea. We started to talk to a lot of people in our extended network, and particularly with artists and managers to test the concept in different ways, and to get feedback.
Moving into music and entertainment with your banking background, what were you seeing that others weren’t in terms of challenges and opportunities thanks to your own perspective?
I would say that when you work in finance and banking, everyone around you has a very similar way of thinking of the world. People are very numbers-driven, very linear thinkers, and they do things in a certain way.
When I moved to the music and technology side of things, I tended to interact with people from completely different backgrounds and ways of thinking. And of course in the music industry, ultimately it's all about the musician, and enabling them to create.
That was maybe the biggest learning experience for me: to fully appreciate, understand, and comprehend ways of thinking and ways of doing things that are very different. I was equally also introducing the financial, and more logical, way of getting things done into a music environment.
Can you outline how Duetti works?
We look at ourselves as a fintech platform in the music space that really combines the three disciplines: The love of music and the appreciation of the creativity of music; the technology side, so streaming and data; and of course, the financial, because ultimately, that's what we do, we provide a financial service.
A lot of people in the music industry, they're thinking of financing in terms of new music. We’re not interested in that. The model that we've devised at Duetti is that we're allowing artists to monetise and partner with us and sell parts of their existing catalogues. It could be as little as one track, but it provides them a lot of liquidity and financial resources – they retain full control of the future, and that's what makes me very excited about it.
As an artist, you have maybe 50 tracks that are available on streaming platforms. Out of the 50, we might look at them and say, “30 probably don't qualify for our minimum criteria.” The minimum criteria being that the track needs to be out for at least two years, because we need to have the data, and it needs to have at least 500,000 streams over the last 12 months, because we need to have that certain size so our systems can actually read the data.
Once you qualify, we can basically give you prices. Of course we can discuss them, but it gives you a good sense of value. For example, a track is valued at $100,000. Then if you are comfortable with the price, we can discuss, “If you want to retain 50% income, it means that we will pay you $50,000 upfront and then all the future income you will get 50% of.” Or alternatively, you can decide to receive 100%. You'll get $100,000, but you're not going to see any future income.
Currently, it's one-and-done and split, and artists don’t have the opportunity to buy them back. That's the model we have right now, and critically, we don't have to do a full catalogue. It's really a track-by-track approach, and so if you want to test it out, you're not sure and you want to see how it works, you can start with just one track and just see.
What sort of technology does Duetti use to assess that return on investment, and how do you assess what the potential is?
There are a lot of markers in the history of the track that help us to predict the future. We can look at the overall trajectory, where the streams are coming from, which platforms they're coming from if people are saving the music and going back to it.
We have data systems that factor all of those different elements in, in order to come up with the prediction. We don't know what the future holds, but the prediction provides a range estimate of what the trajectory of the track will look like. On that basis, we come up with a price.
We've started to think about sync as well, and we are talking to people in the market about that. We haven't done much just yet, because we're more focused on the programmatic, data-driven approach. I think as the company grows bigger, it will start making more sense to put some more resources and effort specifically in sync.
Once the track deal is done, what is that you tangibly do to bolster future streams and bring in revenue for both Duetti and the artist?
That's one of the things that I'm most excited about. Part of the thesis that led us to set up this company is that the music industry is very focused on new music; what's called ‘frontline music’ in the jargon of the industry.
The reality is that over 70% of streams – at least in the US, but it's consistent globally – are actually coming from catalogue streams. So there’s a mismatch between the music labels and a lot of people in the music industry who are still very focused on breaking new records and finding new big artists. The nuts and bolts of the industry are – more than ever, because of streaming – actually on the catalogue side.
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We're building capabilities that are very focused on catalogue management as opposed to the frontline. We don't have a lot of creative muscle in what we're building, but because we have history of the tracks that we're partnered on, we can look at the data.
First and foremost, we make sure that every track has a best-of-class presentation and tagging across platforms. We're seeing a lot of cases where tracks are not appropriately tagged for TikTok or Instagram, so if creators want to use them, it's not readily available or they cannot even find them.
On top of that is identifying marketing gaps. So again, using data to identify, “Okay, we have a track in this specific genre from this artist that is doing really well in these geographies, why is it not doing as well in the other geographies? The data tells us it should be.” So maybe it's a targeted approach into those countries on certain platforms.
There's a lot we can do, and we're basically setting up all these dashboards and management tools to make sure that we have the best-in-class treatment to every track that we're involved with.
If there’s an artist who is interested in working for Duetti, but they’ve not yet got the numbers on a catalogue release, do you have any advice for what they can do in the meantime so that when the time comes, they’re in the best position possible?
Firstly, it's really just a question of time, frankly; there's nothing else to do but wait those two years. The second is that you do need to get up to a certain size in order for us to predict.
Building a successful music career takes time and perseverance. While waiting for an opportunity with Duetti, I’d encourage independent artists to focus on honing their craft, and connecting with their audience.
As the company matures and we add more capabilities, we would love to open up both categories even further. These are not set-in-stone categories, for now it's the initial framework. But I would love to get to a point where it's less than two years, where it's less than 500,000. We're definitely talking and thinking of how to expand so more and more people can potentially talk to us.
What are your views on the pros and cons of master buyouts?
It's not for everyone. It could work for some people and not for others, and that's perfectly fine. What distinguishes what we do versus a record label model is that we have no claims on your future. You do a one-and-done transaction with us, and a month later you can decide to do something else. That’s the key foundation principle.
Now, there is a reason why we're all reading in the press about all those big A-listers doing catalogue buyout transactions. The reason is that it provides the most cash, because you’re selling something for the long term.
There used to be one model up until a few years ago, which is the record label model. So as a creator, if I wanted funding, the only way for me was to go to a record label. That’s if they're even accepting people, because there’s a lot of gatekeepers and barriers to even do that type of deal. And if I do that deal, not only do I get financing, but I'm actually selling my future to some extent, and I'm putting myself in their hands from a creative and marketing perspective.
When we're talking to artists and they’re contemplating and alluding to some of the things that you've said, the difference is that when you sell your master to a record label, you pre-sell the master; you sell your future master.
With us, you sell an old master, and so you sell it from a position of strength. The data is there, the information is there. You're not leaving a ton of the initial potential on the table.
So it's not about arguing creatively whether it's great music or whatever. It's a very clear conversation: This is the data, this is what we can make out of it, and ultimately would be up to you. The artists will decide.
Duetti recently announced its public launch and USD $32m in funding – what has that process been like for you? And what advice do you have for startups looking to start securing funding?
On the fundraising side, it's not easy. There've been a lot of difficult moments, a lot of questions, a lot of conversations, and it was a long road to get here.
In terms of advice, I am a strong believer that in most cases, what really differentiates you as a prospective founder is really about the execution and your ability to execute.
Our concept is something that I'm sure other people have had in their minds, but to me there is a huge difference between thinking about something and toying with something and showing that you are able to actually put the groundwork to execute it.
From a fundraising perspective, to the extent that you can show even the initial threads, I personally think it can go a very long way.
The Duetti website says the company positions themselves as investing in artists. Do you or the company invest in anything else? Are you open to investment opportunities?
I'm a strong believer in getting one thing right and not to spread yourself too thin. We're very focused on executing our initial concept well, and I'm sure that at some point we would be looking to expand the current infrastructure we have into different directions, and ultimately potentially to other avenues as well.
Duetti positions itself as a music fintech company, and as we’ve seen, there have been many layoffs in the fintech landscape over the last 12-18 months. What is the music startup landscape looking like right now and how are you future-proofing at Duetti to protect yourself, your employees, and your artists from any fallout from that?
We started with a fundraiser and we closed our initial fundraising in August 2022. So that was already past the initial freefall. We benefit in the sense that when we started the company and we started to hire, we already had a scarcity mindset. We knew the next couple of years at least are going to be difficult.
For future-proofing, we've been very cautious in terms of how many people we hire, how we expand, investment conversations, and building our capital into the long term. If we had started the company a year prior, I think it would've been a quicker ramp-up at the beginning, but then we would've probably had a big hangover starting last year.
So it's definitely challenging times, but my final thought on this point is that there is actually a big benefit to being in fintech in music, because music is very insulated to some extent from the broader economic conditions and interest rate environments.
We've seen people in the US are paying $10 a month for music streaming, and it provides a ton of value for them. We saw at the beginning of Covid when a lot of people here in the US were unfortunately laid off, I was at TIDAL at the time and I was anxiously waiting for the numbers to see cancellations and how many people are going to cancel the music subscriptions, and we haven't seen any. For me, that was a huge proof point to say that it’s becoming almost like your water bill and your electricity. It's something that delivers so much value for you. You're not going to cut it in tough times. So, to some extent, I do see this industry as more insulated than others.
What are your thoughts on the industry as it stands right now? What are some of the challenges and opportunities artists are facing that they mightn’t have been facing five years ago?
I'm an optimist. I look at where we were when I started in this industry as a financial person and as an operator over eight years ago, and we've come a very long way. We’re seeing an explosion of the creative output and presence of a very wide range of artists.
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If you think about the music industry pre-streaming, it was very heavily concentrated from a financial perspective, and in many other respects as well, with a very finite number of A-listers. There were a lot of gatekeepers, a lack of transparency and understanding, and I think that created a lot of issues and ultimately didn't encourage creativity.
I know streaming has been around for a while, but it's still very new and a lot of new things are only now starting to happen. I would like to hope that Duetti is going to have a small part in these new things, which enable creativity for a much broader range of artists.
The barriers for anyone to go and put themselves out there, to put their music on platforms, and be heard are as low as I think they've ever been. That's very exciting to me, and if I'm looking at listening data, it used to be very heavily concentrated upon a very small list of A-listers. That is becoming very gradually – slowly but surely – a lot more diversified.
There are a lot of challenges and a lot of friction on the way, but I think the industry is becoming more diverse, more voices are being heard, and – from a consumer perspective – people have opportunities to listen to more artists.
Have you been to Australia before?
I have not, unfortunately. It’s very high on my list, I've worked with a lot of Australian colleagues here in the US, and during my time at TIDAL, I had a number of conversations and partnerships with folks out there in Australia, but I would love to make it at some point.
From your time at TIDAL, or through your work with Australian colleagues, is there anything about the Australian market that you found unique?
From all my interactions during my time at TIDAL and also now at Duetti, I would say that my experiences have seen that there is a lot of forward-thinking. I found a lot of folks out there are very much in tune with the innovation economy and being at the frontline of new ideas and new concepts. So it's always been interesting, and there’s a lot of open mindedness for something new.
Who from the industry and communities would you like to connect with in the future?
We're a young company, and we're very hungry for any person that feels that they can contribute and share knowledge, expertise, and music with us. If anyone satisfies our minimum criteria, we would love to have a dialogue.
The dialogue with us is very open-ended – no commitment on either side. Even if you don't want to transact right now, even if you don't need the money or you're not interested, or you think it's worth a lot more – that's your prerogative.
The second and final point I would say is that of course, more broadly, we are very open. We're humble, we're starting, we don't know a lot of things, we're feeling our way, and so anyone who feels they can contribute – whether it's on the marketing side, the prediction side, any other aspect of our business – we would welcome a conversation.
What is next for you?
I'm heads-down building Duetti. I've been through a very long journey, and I think it really made it very clear to me that I'm really enjoying building companies from the ground-up. I remember the days where it was just an idea and I thought to myself, with all my experience in music and all my contacts and all my connections, I was like, “I don't think it makes sense. I shouldn't even spend time on it,” all these self doubts and thinking, “We'll see how big it gets.”
Even at this point, I'm proud of what we've achieved. We are a full team, we're walking, we're making a very big difference in artists’ lives, and we've achieved some interesting results on the prediction side. So it’s a very rewarding feeling.
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Please Note: The VMDO does not unequivocally support Duetti, their business model, and the services they provide for artists. We encourage all people to seek professional and legal advice, to weigh their options, and to make the best choice for them when it comes to making professional decisions.