MUSIC INDUSTRY BLOG

Yesterday, ReverbNation announced their partnership with Audiolife and the soft launch of the Reverb Store, a robust and fully-integrated e-commerce solution for artists and agents to sell directly to their fanbase.  From do-it-yourself T-shirt designs to comprehensive earning reports, the Reverb Store is as turn-key as the ReverbNation ethos.  Best of all, it includes all the social media promotional widgets and collateral you would expect as well as seamless integration with ReverbNation’s existing marketing features.  Anyone can open a store, create as many custom items as they want, and operate the store for free.  No monthly minimums, no monthly fees.

“The Reverb Store allows artists to layer a purchasing opportunity into every fan interaction they have online, whether it’s at Facebook, MySpace, a blog, or the band’s own website.”
– Michael Doernberg, CEO of ReverbNation

“Artists need solutions that can help them grow their fan base and convert those fans into customers.  The Reverb Store is the total package, combining the best of ReverbNation and Audiolife.”
– Brandon Hance, Founder and CEO of Audiolife

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I thoroughly enjoyed a recent email exchange with ReverbNation’s Co-Founder and COO, Jed Carlson, who shed some light on the company’s background, positioning and perspective on music 2.0.  The company, which has arguably taken the lead in affordable and scalable music marketing solutions over the last three years, has been consistently rolling out new features that have raised the bar within the online music industry by providing truly turn-key solutions for artists and music industry professionals of every caliber, function and style.

Although ReverbNation has been on my radar for some time now, their proposition genuinely piqued my interest when a good friend shared his enthusiasm for FanReach, the company’s free email marketing service, about a year ago.  Later and in an unrelated matter, I began researching the various players in the digital distribution realm.  ReverbNation came up.  In fact, every time I discovered a faster, better, cooler way to go to market as a musician or promoter, be it music tech or otherwise, Jed and his team appeared to have a stake in it – and a palpable competitive advantage, no less.  I needed to get to the bottom of this and do it quick-smart… how is it that I’m not in the proverbial know? Pfft.

Jed, for every ‘solution’ on ReverbNation, there’s at least a handful of small companies specializing and excelling in that particular offering.  How does ReverbNation compete, differentiate and manage such risk?

I would argue that we compete well because of these 3 things:

1. We listen to our Artists.  It sounds obvious, but over 80% of our new features come from user suggestions.  We have never claimed to have all the answers, but we do focus on asking the right questions and listening, carefully.  Lots of companies talk about how they know what the future of music is.  We fully acknowledge the uncertainty of the future landscape, and instead focus on the realities on the ground in front of our customers.  Who knew that Twitter would be important to musicians a year ago, for example?  That doesn’t mean we don’t think about the future.   But Artists need action today, or there may be no tomorrow for them. 

2. We are marketing technology experts, with a minor in music.  Many competitors are born of music experts that are trying to solve a specific music business problem of the day.  That’s fine, but it’s a bit like being an expert in 727 airplanes versus being an expert pilot.  The landscape (airplane, in this analogy) is changing constantly.   Artists need a marketing partner that will automatically take advantage of the latest opportunity that technology offers for them, versus someone that can fly that specific plane really, really well.  A great example of this is our oldest solution, the FanReach email product.  In the early days, it served the basic purpose of sending emails to fans for the Artist.  Today, FanReach can be used to specifically promote a show, grow a street team, invite fans to a CD Release Party, and can even be set to automatically ‘find’ more information about each fan while the Artist sleeps at night.  Why?  See #1 above. 

3. We take a holistic approach to our solutions.   Artists, in general, don’t sit around and craft a ‘Facebook Strategy’, think about how to position their music at Amazon versus iTunes, or worry about how to approach Twitter as a marketing vehicle.  They think about ‘promoting’ the music that they worked so hard to create.  Our job is to worry about all of that for them, use the data collected from those that came before them, and give them the best tools to execute a more effective marketing campaign than they otherwise would have.

Notwithstanding the one-stop-shop approach, how is ReverbNation aiming to change the independent music management and promotion landscape?

Our goal is to create visibility and options for the Artist.  That doesn’t mean that we don’t respect the hard working companies and individuals that orbit and support them ? quite the contrary, in fact.  Since our earliest days, we have supported record labels, managers, venue operators, and promoters in their endeavors to bring music to the people.  We even give them the same solutions to execute and track marketing campaigns on behalf of their Artists.
  
In the past, the potential value of an Artist has been a very difficult thing to measure.  Our solutions can help solve that.  We believe that the future financial value of every Artist lies in their ability to engage fans.  It isn’t just the number of fans, but how often and how deeply they can engage them.  We aim to change the landscape by elevating Fan Relationship Management (FRM) as the key to success, and positioning the company as the preeminent partner that any Artist can have in that endeavor.  But let me be clear, many Artists are NOT interested in financial success.   That’s cool too.  Our solutions can aid them in just getting the music out to their fans, and we see that as part of our mandate.

As a technology company, what propriety technologies have you incorporated into your offering to ensure a high barrier of entry for competitors?

Our barriers come mostly from the breadth of services we offer (back to the one-stop-shop), the specific innovations we offer versus other similar tech, and the traction we already enjoy with lots of happy customers.  It’s no secret that over 350,000 Artists are using the platform today, and hundreds more signup every day (90% from word of mouth).  We are humbled by this popularity, and it speaks to how we listen to our users.

ReverbNation is literally a caldron of thousands of marketing experiments being carried out every day by Artists from hundreds of countries, and all walks of life.  We are able to synthesize the best practices out of the marketing ‘noise’ and implement them into technology that can be applied by virtually any Artist, with a high probability of success.   A great example of this is the Exclusive Download Widget that we provide.  We observed that Artists were being very successful at exchanging exclusive content (a new song, for example) for a mailing list signup (something very valuable to Artists).  We codified this into an easy to use widget that Artists could place on their web pages and blogs with a simple cut and paste.  This widget exchanges song downloads for an email address from the fan.  Artists who use this tool grow their mailing list at a rate of 600% faster than those who don’t.  Do Artists want solutions like that?  Um, yes please.  We knew they would, because we observed it working for some of them already.

It appears that ReverbNation opts to develop technologies and features in-house rather than form strategic alliances to expand its suite of tools.  Why?

We are very competent at building technology (it’s our pedigree), and our strategy has always been to evolve over time in a way that was more complete and cohesive. Partnerships have an inherent attribute of being challenging to integrate into the big picture that we promote. That said, we have identified some key areas where we will partner in the near future in the best interest of the Artist.  We aren’t against partnering, if it can be done in a way consistent with Artists’ goals.

Our internal credo is “Artist First”.   If a feature or product doesn’t first help the Artist, we don’t do it.  Period.  When partnerships can work inside of this belief, they are a real opportunity.

Free email marketing was a big win for ReverbNation in terms of user acquisition.  How do you intend on riding this wave?  What are the monetization prospects here?

We are currently operating on a ‘freemium’ model where we offer up the best free services artists can find anywhere, but still provide them (at a reasonable price) the services they need when they outgrow the free stuff, and can afford to pay us for the services.  This accomplishes our goal of artist acquisition as well as our mission to get artists involved very early in their careers when they don’t have money to spend, and need our support.  We believe in helping EVERY artist succeed, and we don’t feel that we should participate in their success until they achieve it. That reciprocity ? I’ll help you now, but when you get big don’t forget about us ? model jives well with our culture and enables the ‘Artist First’ philosophy upon which we founded the company.  Artists are people.  And people don’t forget who helped them grow.

Digital music distribution, in my opinion, is an awesome offering.  Are you identifying a significant migration of users from CD Baby and TuneCore to ReverbNation?

Yes, we have users migrating.  But CD Baby and TuneCore are awesome in what they do.  Again, this goes to the core of the ‘one-stop-shop’ mentality.  When you really think about Digital Distro, the key is driving that one additional sale, not price-shopping on the service that makes it possible (we actually promote the CD Baby service if it will help the Artist sell more music).  If an Artist partners with a service that can help them sell even one more album per year, they win.  Our goal is to focus on the top line growth for artists, and our solutions help them do that.  Artists need to be everywhere fans and potential fans might be ? offering up their content and selling some of it when they can.  Fans go where fans go, and Artists need to be there to meet them.  Our digital distribution service is special in the way it helps them sell more music, not in how it transfers their song file to iTunes.   Anyone can do that.

Other than the pricepoint, how does ReverbNation’s digital distribution solution differ from the other players’?

We try to be competitive with the other offerings on pricing, but the big difference is in how we help them sell the tracks once they are posted to retail.  Every one of our widgets, for example, offers links to buy the tracks at retail, whether it is posted on their MySpace, homepage, or blog.  We even introduced a ‘retail links’ widget that automatically searches iTunes and Amazon for the artist’s merch and music and pulls those offerings into one widget they can place anywhere.  Our email solution automatically integrates the ‘buy links’ into the messages that Artists send.  These are just two examples of how we help the Artists transact more business.   Digital Distribution is really just a means to an end.  Direct-to-fan stores are gaining traction right now as an alternative to selling at retail, and we hope to be in that game.

What may we expect ReverbNation to look like and offer over the next year or two?

The quick answer is that ReverbNation will be more ‘complete’ than it is today.  We will have more artists involved, better feedback from our users, and we will be able to help with more of the ‘pie’ of services that Artists, and those that serve them, require.  I also expect to have a couple of very innovative revenue solutions for Artists to better monetize their content than are available today.  If we can make Artists more successful tomorrow than they were today, we have accomplished our mission, and the company will be a success.  We don’t expect to be successful if our Artists are not.

“When we launched our free digital distribution service, we knew we would be able to provide our users with new possibilities to help them expand their own marketing. With Jango Airplay, our users can freely invest into getting radio promotions and establish unique social interactions with new fans to help drive music sales. We are very excited to be working with Jango to provide an effective marketing avenue to our users.” said Kevin Rivers, Founder and CEO of WaTunes.

“We designed Jango Airplay to give emerging artists an affordable and effective way to get their music proactively played to real listeners who like similar music. Thanks to WaTunes and affordable technology it is cheaper than ever to produce and sell music – but getting your music heard is the first step. We are very excited to bring WaTunes users in front of our 6 Million listeners. ” said Mattias Stanghed, Co-Founder and Chief Product Officer of Jango.

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Trent Reznor’s revolutionary and somewhat controversial music marketing activities (read Reznor’s back story) continue to push the envelope with the release of the NIN frontman’s very own iPhone App.  We are not worthy.

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If content syndication and distribution is the hottest topic on this blog at the moment, then music metrics is a close second.  Over the weekend, I played with a new service I read about on Hypebot called RockDex.  More like Google Alerts than Google Analytics for measuring music buzz, the free point-and-shoot service leverages the API’s of several social networks to measure an artist’s volume of mentions on Twitter and Blip.fm, content on YouTube and Flickr, and fans and listens on Last.fm and iLike, producing a score out of one hundred for each category.  Third-party ‘how-to’ recommendations are placed strategically next to each score in an effort to help the artist raise his social buzz and, in turn, score on RockDex.  I am not quite sure how useful or even representative this service is.  I am guessing that it is intended as a snapshot of a broader service to come or marketing collateral for Music Arsenal, the company’s paid web-based CRM solution for artists and record labels, reminiscent of ArtistForce.

Band Metrics is a data analytics and decision support system for the music industry, helping its users define and learn about their target audiences.  The system gathers pertinent data about artists and displays manageable statistics and assumptions for its users’ insight, application and marketing advantage.  For instance, Band Metrics will provide feedback about an artist’s presence on a variety of social networks which, in turn, can be applied to target promotional campaigns and isolate the areas where the artist may more effectively invest his resources.  Currently in private Beta, interested parties can apply for an invitation to test the site.  I’m waiting for mine.

P2P streaming music service, Grooveshark, has launched an artist promotion initiative – much like the track placement scheme Jango conceived of – as a means for artists and music promoters to purchase plays on its platform, a direct advertising approach that makes sense.  The Gainesville, Florida, company of approximately 40 young entrepreneurs has created a music service that rivals that of Last.fm and Pandora, the two major players in legal music discovery and ‘free’ music streaming.

Grooveshark claims to have deployed a legal music discovery and consumption model, providing its users with a financial incentive to share music, compensating artist/labels for their respective share of ‘broadcasts’, and maximizing illegal file sharing by financing its original sources.  Whether this service is actually legal or not is questionable and it appears that the company has created an expensive model to sustain on ad revenues alone.  However, they’re coming through on some very interesting marketing features for small budget music marketing campaigns.  At its core, Grooveshark Artists offers pay-for-play audio realestate matched to its existing track recommendations and provides analytics tools for track placement optimization. 

In addition, it has partnered up with some of the most talked about music tech startups for music retail, licensing, funding, and more, including Bandcamp, Sellaband and TheNextBigSound, all under the Grooveshark banner which already includes a number of subsidiary services including Tinysong, a track link generating tool for viral distribution, and  Twisten.fm, a Twitter crawler that finds music-related tweets and links them to playable tracks.  All of this put together amounts to a powerful enterprise of do-it-yourself marketing and a 360 indie approach akin to ReverbNation.

Online streaming radio and music tastemaker, Jango, has launched a somewhat controversial artist promotion programme called Jango Airplay.  Essentially a pay-to-play scheme [and reminiscent of terrestrial radio “payola” which has been illegal since the fifties], Jango Airplay provides artists and their agents a direct means of plugging their songs to Jango’s listener base of 6 million for a fee.  Much like the StumbleUpon advertising initiative, displaying a sponsored web page for every nine unsponsored web-pages, the promotional value of this scheme is not absolute: “If you get 50 positive ratings, your song starts playing for free in general rotation on Jango. If your song continues to get good ratings, it will be played more and more often and in more and more stations.”  For $30, Jango Airplay offers 1000 plays, each track linked to its distributor (i.e. Amazon, iTune).

Pay-to-play may be an unpopular paradigm among musicians but this is actually an unprecedented opportunity for artists and labels to reach a new audience and guarantee some rotation.  For not much more than pocket change, bootstrapped musicians can gain some insight on who is most likely to listen to them, rate them up, and perhaps even purchase something.  Assuming that Jango Airplay plugs sponsored tracks appropriately, this is a truly awesome marketing platform for the music industry.

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In a post called “Don’t Confuse Technology with Marketing” published today on The Music Snob, I found the opening statement intriguing: “The use of music marketing technology is not in and of itself an act of music marketing.”  The post develops into an insightful, artist’s perspective on the plethora of web-based music marketing and networking solutions aimed at independent artists and promoters, and questions their claim – each service with its unique proposition – as “an act of marketing” by mere subscription to and execution of their service. The Music Snob highlights that the majority of these services provide a means for fans to find the artist and not visa versa.  For instance, if the artist is distributing his music to iTunes, he is certainly making his music available for purchase… but that’s not marketing, that’s plain old supply.  So how do you create demand?  By marketing.

One of the successful attributes of social networks is the balance of push and pull marketing.  In push marketing, you look for and find friends.  In pull marketing, friends look for and find you.  Popular folks enjoy more of the pull while the less socially apt have to push.  This is a tried and tested socio-ecosystem, online and off.  However, musicians and music listeners are, by definition, unequal.  There may be a cross over – musicians may also listen to and purchase music and music listeners may also write songs and play in band – but one is supplying and the other is consuming.  In a world where music is ubiquitous and available in limitless varieties, the marketplace is not in favour of the musician and, therefore,  he must actively market (push and push hard) to find music listeners to consume his music.  The advent of taste making music technology such as Pandora, iLike and Last.fm has made it easier for musicians to develop their presence online but that, I hope The Snob will agree, is far too passive to constitute a true marketing effort through technology which, first and foremost, caters to the consumer’s appetite for music (and not necessarily your music).

From my understanding, what this post suggests, at least in part, is that few artists manage to market themselves successfully, even with an array of revolutionary “marketing” tools, and, resultantly, the music industry’s bottom line pretty much remains the same: a handful of artists sell while the vast majority don’t, even if all of them have a presence on MySpace, Facebook, ReverbNation, Sellaband, OurStage, Music Nation, Sonicbids etc. etc.