Los Angeles-based financial software company Exactuals reports that its flagship product PaymentHub saw 250% year-over-year growth in the past 12 months. Some of the company’s biggest clients include Global Music Rights, Entertainment Partners, and entertainment’s biggest union: SAG-AFTRA. Aiming to expedite the efficiency in which people are paid, PaymentHub has recently surpassed $1 billion in all-time dollars processed.
Exactuals’ product library includes PaymentHub, RAI, and SR1 which are furthering the company’s goal of centralizing and expediting how metadata is stored, and how artists and their teams are compensated. PaymentHub allows studios, unions, guilds, payroll companies, music publishers, record labels and other distributors to provide direct deposit payments, tax document management and online reporting not only to other rights-holders but to independent managers and contractors.
Recently, we got a chance to talk with Exactuals’ CEO Mike Hurst and COO & President Bryan Walley on the pace of Exactuals’ growth, outdated payment systems, and how they hope their product hopes to empower individual business managers in entertainment and insurance.
An outmoded payment system
One of the biggest challenges facing payments right now is the outdated system of paper checks and reporting. For an industry that, in part out of necessity, moved largely online, paper check, physical ledgers, and multiple levels of bureaucracy impede the increasingly smaller measurements of money that move through entertainment.
“With any big industry that is making a lot of money, is that oftentimes the ‘way it’s always been done’ can be the biggest competitor,” Hurst said. “It’s a game of catch up as they work to modernize. But the last year and the move to a work from the home environment has put a lot of emphasis on any kind of project that can automate and remove paper.”
Many in the industry have started to question the security, the efficiency, and the manpower required to uphold the current payment system. Walley cites the industry’s inability to keep up with many sudden changes in technology and circumstance as a major reason to shift to digital payment. Especially since music has quickly moved from CD sales to streaming, PaymentHub and RAI (an open API that uses machine learning to enhance metadata surrounding intellectual property) contend with data and money as small as 0.0001 of a cent per listen.
“You’re just getting an entire dictionary size backup for a $10 payment, and you know, it just became unfeasible,” Walley said. “So what ends up happening is you have people that were forced to change. The industry forces made people modernize.”
Especially since a lot of work in entertainment is largely contractual, Walley states that “chasing around,” a check for a project an artist might’ve worked on months ago becomes infeasible.
Empowering the individual business manager
And since the company’s start in 2011, the scale in which money moves has grown exponentially. According to Hurst, one of the biggest challenges was establishing themselves, especially at the start, as a trustworthy entity to not only handle large amounts of money, but convincing companies and studios to change the standard on which payment ran. Since the company was originally based in Silicon Valley, the home of Netflix and Apple, two companies that were causing drastic changes to entertainment, many companies in LA initially expressed hesitation to trust Exactuals with making further changes to their business.
“It can catch up to you fast, the way an industry works changes overnight,” Hurst said. “You’re stuck with the system that you’ve had for 20 or 30 years that works just fine until you triple the volume and then they totally explode.”
In addition to modernizing payment, Exactuals aims to make account information available not just to the person being paid, but by the individual business managers that handle the money. By centralizing where the data can be found, business managers, according to Walley, spend less time working around the inconveniences of the current systems of separate logins and access rights. The company, through its User Access Management functionality, aims to empower the individual accountant in the efficiency and access to information the system provides.
“Everyone has two choices,” Walley said. “We could all just play ostrich and pretend that it’s not the business manager logging in, or within security rights and approval rights. Or you create a good User Access Management functionality to be like, hey, my accountant should definitely see all these things — my lawyer can only view them but my accountant can edit them. My team should see them with different access rights. Let’s just all admit this is how the industry works, and then build a system around how the industry works, as opposed to playing ostrich in sharing passwords.”
“Every guild, every studio, record, label or publisher, thinks about their payee first, as they should. But at a certain scale, that pay is the business manager,” Hurst said. “So whatever you can do to make their day more functional faster and better serve the client more effectively, right? That’s the goal.”
Improving technology to improve communication
Hurst states that the key to improving relations between labor and companies is investment. Especially with how suddenly circumstances can change, it is important to spend time ensuring that the technology that keeps people communication is efficient, and more importantly, functional.
“I think we’re living in a world now where you need to be able to do things quickly, automated and remote,” Hurst said. “It’s worth the investment of time, resources, and technology that makes it functional. So I think those lessons will stay with us.”
“High net worth individuals are always going to need a trusted advisor going forward,” Walley said. “Are we giving these advisors the tools to operate efficiently and help serve that end talent? That’s really the goal.”
