A New LA Company Aims to Give Fans a Way to Invest, Literally, in the Musicians They Love

Sam Blake

Sam primarily covers entertainment and media for dot.LA. Previously he was Marjorie Deane Fellow at The Economist, where he wrote for the business and finance sections of the print edition. He has also worked at the XPRIZE Foundation, U.S. Government Accountability Office, KCRW, and MLB Advanced Media (now Disney Streaming Services). He holds an MBA from UCLA Anderson, an MPP from UCLA Luskin and a BA in History from University of Michigan. Email him at samblake@dot.LA and find him on Twitter @hisamblake

A New LA Company Aims to Give Fans a Way to Invest, Literally, in the Musicians They Love
  • AmplifyX launches next week to offer shares in musicians' future royalty income
  • Its first tranche is two Detroit-based musicians, each of whom are offering 20% of future royalties for $10,000 at an effective $25 share price
  • In the future, Amplify plans to build out a secondary trading market and hopes to expand beyond music and into the broader creator economy

Rising Detroit rapper and singer Rocky Badd has always been about the street, but soon she and her manager Curtis McKinnon will be going public.

Next week, they'll be selling shares worth 20% of Rocky's future royalty income for $10,000. In doing so, they're also hoping to gain a legion of super fans financially and emotionally invested in her success.

The exchange will be powered by L.A.-based AmplifyX, one of a growing number of online investment platforms made possible by 2015 regulatory changes around crowdfunding. An extension of President Obama's 2012 JOBS Act, the new rules eased restrictions on fundraising and investing, enabling the budding democratization of fractional ownership. Non-accredited investors can now add to their portfolios shares of vintage cars, collectibles like sneakers and trading cards, famous artworks and more.

"Music hasn't really changed from a financing perspective in decades," said Adam Cowherd, Amplify's co-founder and chief executive. His platform aims to address that.

Detroit rapper and singer Rocky Badd, aka September Briyonna-Michelle.

Badd, whose real name is September Briyonna-Michelle, is using Amplify to offer 400 shares tied to her upcoming album, "Respect the Writer 2," for $25 each. Each share is effectively a claim on 0.25% of the streaming and digital download royalties generated by the new release and a few additional songs. Jay Vinchi, another musician from Detroit, is also putting up shares for his upcoming album as part of Amplify's first tranche of offerings.

In L.A., Cowherd has been hard at work. A former physicist turned investment banker, he and his small team had built the infrastructure to run a securities exchange by the end of last year. They waited, though, to complete what would be an 8-month gauntlet to gain regulatory authorization from FINRA, a private financial regulator, and the SEC, its public sector counterpart. The company finished that process in August, and is now awaiting final approval to open its first offering, which Cowherd expects to arrive early next week.

He thinks the wait for that regulatory compliance will pay off by helping Amplify to compete with other platforms that offer similar services, such as Royalty Exchange and Vezt, which also allow fans to buy shares of artist royalty streams.

This first fundraise will be open for 60 days and royalty payments will be distributed to shareholders annually; eventually that could shift to quarterly, Cowherd said.

For artists like Rocky Badd and Jay Vinchi, one obvious appeal to selling shares in their future royalties is earning instant cash – not exactly easy to come by for a musician today.

Rocky Badd's deep connection to her fanbase gives her manager McKinnon and Cowherd confidence she'll have no trouble raising the $10,000. In May, she hosted a livestream concert on Zoom that sold over 1,000 tickets. The YouTube video for her song "Vindictive" has over 8 million views.

With the money raised, McKinnon will look to further spread Rocky Badd fever.

"Rocky can post something and easily get thousands of streams and likes, but now we're trying to get to the millions," he said.

The Amplify offering also has the potential to inspire a squadron of fans to become a de-facto marketing department.

"If we get multiple fans [to buy shares], we now have promoters for a lifetime, because the better that album does, the more revenue share for them," said McKinnon, who — in addition to managing Briyonna-Michelle — runs CrowdFreak, an online platform that helps up-and-coming artists find performance and exposure opportunities.

A rising number of artists are eschewing record labels in favor of ad-hoc, artist-support services, many of which are enabled by technology. Cowherd sees AmplifyX one day building further on that trend, morphing into an entire "record label á la carte."

"Long term, it would basically be a record label in your pocket. We'd like to build that into the native mobile app from the artist perspective, where not only do they have their investor data, and their streaming and social data, but they could also say, 'I'm looking for PR', and we give them three options that have already been vetted through us, and they can make those connections and bookings right through the application," Cowherd said.

AmplifyX co-founders Bobby Kamaris (L) and Adam Cowherd.

Even if Amplify remains solely a financing platform, he sees expansion opportunities in working with more artists and eventually selling shares in legacy catalogs.

"How cool would it be for somebody who's part of the KISS Army to actually own a fractional piece of 'Detroit Rock City' or something like that?"

The company also plans to build a secondary market for trading shares, he said.

For investors, getting in on the streaming market could be attractive. From 2014 - 2019, revenue from streaming saw a 43% compound annual growth rate, and Goldman Sachs projects the $11 billion market to quadruple by 2030. And since streaming royalties are generally uncorrelated with investment returns elsewhere, they provide a means for investors to reduce risk across their investment portfolio.

Given these factors, Cowherd expects investment to come from cryptocurrency investors and the growing crowd of young traders, along with artists' super fans.

"There's a growing demand among Gen Z for investing," Cowherd said. "My uncle is the principal of a school in Michigan, and he actually had to ban Robinhood because so many kids were day-trading."

Down the road, Cowherd expects to see a lot of engagement from that younger generation. They may have the chance to invest not only in musical projects but also in other content creators as well, and the businesses those creators and influencers may start.

"I really want to power the entire creator and influencer economy," Cowherd said.

Amplify has raised about $250,000 in pre-seed funding and plans to raise a $2-3 million seed round in Q1 or Q2 next year.

For now, it'll generate revenue by taking a percentage of the capital raised from the revenue-share offering. Later, it plans to take an affiliate fee for its record label á la carte service, and a small fee for transactions through its secondary market. It may also offer debt financing, such as for underwriting concert tours.

Other companies will be competing to provide innovative forms of artist financing. L.A.-based Stem, for example, recently opened a $100 million debt-financing arm to loan artists advances against their future royalty income. Kobalt, a London-based firm, is also in the competitive mix.

Hipgnosis, which has been on a spending spree of late to allow investors to buy rights to songs and musical IP, represents the broader bubbling activity in the acquisition of music publishing rights.

Cowherd said one key way he aims to differentiate Amplify is by facilitating direct connections between fans and artists.

For Briyonna-Michelle, that connection is about more than a financial transaction.

"For a lot of people, especially people in my city, we don't really invest in nothing. You buy jewelry, you buy clothes, you buy cars or whatever and you just keep up, but it's like, at some point, when we get older, you're just gonna say you had it," she said. "I feel like no matter what the album does, it's still, like, at least you tried to invest in something, whether it worked or it didn't. I feel like it motivates people to start putting some money behind something where later on in life you can get something out of it."

    Come next week, a new set of fans will begin hoping one day to get something out of their investment in her.


    Sam Blake primarily covers entertainment and media for dot.LA. Find him on Twitter @hisamblake and email him at dot.LA


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    'Open Letter' Proposing 6-Month AI Moratorium Continues to Muddy the Waters Around the Technology

    Lon Harris
    Lon Harris is a contributor to dot.LA. His work has also appeared on ScreenJunkies, RottenTomatoes and Inside Streaming.
    'Open Letter' Proposing 6-Month AI Moratorium Continues to Muddy the Waters Around the Technology
    Evan Xie

    AI continues to dominate the news – not just within the world of technology, but mainstream news sources at this point – and the stories have entered a by-now familiar cycle. A wave of exciting new developments, releases and viral apps is followed by a flood of alarm bells and concerned op-eds, wondering out loud whether or not things are moving too fast for humanity’s own good.

    With OpenAI and Microsoft’s GPT-4 arriving a few weeks ago to massive enthusiasm, we were overdue for our next hit of jaded cynicism, warning about the potentially dire impact of intuitive chatbots and text-to-image generators.

    Sure enough, this week, more than 1,000 signatories released an open letter calling for all AI labs to pause training any new systems more powerful than GPT-4 for six months.

    What does the letter say?

    The letter calls out a number of familiar concerns for anyone who has been reading up on AI development this past year. On the most immediate and practical level, it cautions that chatbots and automated text generators could potentially eliminate vast swathes of jobs previously filled by humans, while “flood[ing] our information channels with propaganda and untruth.” The letter then continues into full apocalypse mode, warning that “nonhuman minds” could eventually render us obsolete and dominate us, risking “loss of control of our civilization.”

    The six-month break, the signatories argue, could be used to jointly develop shared safety protocols around AI design to ensure that they remain “safe beyond a reasonable doubt.” They also suggest that AI developers work in collaboration with policymakers and politicians to develop new laws and regulations around AI and AI research.

    The letter was signed by several AI developers and experts, along with tech industry royalty like Elon Musk and Steve Wozniak. TechCrunch does point out that no one from inside OpenAI seems to have signed it, nor Anthropic, a group of former OpenAI developers who left to design their own “safer” chatbots. OpenAI CEO Sam Altman did speak to the Wall Street Journal this week in reference to the letter, noting that the company has not yet started work on GPT-5 and that time for safety tests has always been built into their development process. He referred to the letter’s overall message as “preaching to the choir.”

    Critics of the letter

    The call for an AI ban was not without critics, though. Journalist and investor Ben Parr noted that the vague language makes it functionally meaningless, without any kind of metrics to gauge how “powerful” an AI system has become or suggestions for how to enforce a global AI ban. He also notes that some signatories, including Musk, are OpenAI and ChatGPT competitors, potentially giving them a personal stake in this fight beyond just concern for the future of civilization. Others, like NBC News reporter Ben Collins, suggested that the dire AI warnings could be a form of dystopian marketing.

    On Twitter, entrepreneur Chris Pirillo noted that “the genie is already out of the bottle” in terms of AI development, while physicist and author David Deutsch called out the letter for confusing today’s AI apps with the Artificial General Intelligence (AGI) systems still only seen in sci-fi films and TV shows.

    Legitimate red flags

    Obviously, the letter speaks to relatively universal concerns. It’s easy to imagine why writers would be concerned by, say, BuzzFeed now using AI to write entire articles and not just quizzes. (The website isn’t even using professional writers to collaborate with and copy-edit the software anymore. The new humans helping out “Buzzy the Robot” to compose its articles are non-editorial employees from the client partnership, account management, and product management teams. Hey, it’s just an “experiment,” freelancers!)

    But it does once more raise some red flags about the potentially misleading ways that some in the industry and the media are discussing AI, which continues to make these kinds of high-level discussions around the technology more cumbersome and challenging.

    A recent viral Twitter thread credited ChatGPT-4 with saving a dog’s life, leading to a lot of breathlessly excited coverage about how computers were already smarter than your neighborhood veterinarian. The owner entered the dog’s symptoms into the chatbot, along with copies of its blood work, and ChatGPT responded with the most common potential ailments. As it turns out, a live human doctor tested the animal for one of the bot’s suggested illnesses and accurately guessed the diagnosis. So the computer is, in a very real sense, a hero.

    Still, considering what might be wrong with dogs based on their symptoms isn’t what ChatGPT does best. It’s not a medical or veterinary diagnostic tool, and it doesn’t have a database of dog ailments and treatments at the ready. It’s designed for conversations, and it’s just guessing as to what might be wrong with the animal based on the texts on which it was trained, sentences and phrases that it has seen connected in human writing in the past. In this case, the app guessed correctly, and that’s certainly good news for one special pupper. But there’s no guarantee it would get the right answer every time, or even most of the time. We’ve seen a lot of evidence that ChatGPT is perfectly willing to lie, and can’t actually tell the difference between truth and a lie.

    There’s also already a perfectly solid technology that this person could have used to enter a dog’s symptoms and research potential diagnoses and treatments: Google search. A search results page also isn’t guaranteed to come up with the correct answer, but it’s as if not more reliable in this particular use case than ChatGPT-4, at least for now. A quality post on a reliable veterinary website would hopefully contain similar information to the version ChatGPT pulled together, except it would have been vetted and verified by an actual human expert.

    Have we seen too many sci-fi movies?

    A response published in Time by computer scientist Eliezer Yudkowsky – long considered a thought leader in the development of artificial general intelligence – argues that the open letter doesn’t go far enough. Yudkowsky suggests that we’re currently on a path toward “building a superhumanly smart AI,” which will very likely result in the death of every human being on the planet.

    No, really, that’s what he says! The editorial takes some very dramatic turns that feel pulled directly from the realms of science-fiction and fantasy. At one point, he warns: “A sufficiently intelligent AI won’t stay confined to computers for long. In today’s world you can email DNA strings to laboratories that will produce proteins on demand, allowing an AI initially confined to the internet to build artificial life forms or bootstrap straight to postbiological molecular manufacturing.” This is the actual plot of the 1995 B-movie “Virtuosity,” in which an AI serial killer app (played by Russell Crowe!) designed to help train police officers grows his own biomechanical body and wreaks havoc on the physical world. Thank goodness Denzel Washington is around to stop him.

    And, hey, just because AI-fueled nightmares have made their way into classic films, that doesn’t mean they can’t also happen in the real world. But it nonetheless feels like a bit of a leap to go from text-to-image generators and chatbots – no matter how impressive – to computer programs that can grow their own bodies in a lab, then use those bodies to take control of our military and government apparatus. Perhaps there’s a direct line between the experiments being done today and truly conscious, self-aware, thinking machines down the road. But, as Deutsch cautioned in his tweet, it’s important to remember that AI and AGI are not necessarily the exact same thing.

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    David Shultz reports on clean technology and electric vehicles, among other industries, for dot.LA. His writing has appeared in The Atlantic, Outside, Nautilus and many other publications.

    Will EVGo’s Stock Surges Be Enough To Keep the Company Stable?
    Image from EVGo

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    AgTech Startup Leaf is Helping Farmers Brace for Unexpected Rainfall After Record Year

    Samson Amore

    Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College and previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.

    green leaf drawing and rolling farm lands
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    At least 50,000 acres in the state of California are estimated to be underwater after a record-breaking year of rainfall. So far this year, California has received nearly 29 inches of rain, with the bulk being dumped on its central and southern coasts. Farmers are already warning that the price of dairy, tomatoes and other vegetables will rise as the weather prevents them from re-seeding their fields.

    While no current technology can prevent weather disasters, Leaf Agriculture, a Los Angeles-based startup that launched in 2018, wants to help farmers better manage their properties by leveraging data.

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