Future of Music Coalition

About Future of Music Coalition

We are a consumer-focused site and we think that by serving the consumers needs we'll grow an audience. We think a byproduct of doing that well is that the artists that we represent on our site will also receive value by reaching those constituents. So if the artist isn't happy with the way we treat them, or with the results they get from being on our – more... site, we believe they shouldn't have to stay.

J: Is this all free content, or do you sell digital downloads as well?

A: When we started our website a year ago we looked around and said, "Who's doing this? We'll follow their lead." So we went with the Emusic model of selling tracks. We started trying to sell tracks for 75 cents and 25 cents. The results were less than mediocre, they were pretty horrible, even though we had good content our site and the content keeps getting better and better. Still it was not like there were thousands of people who were banging on our door to buy music. I think as you look at the record of our competitors who also sell digital downloads you will see that they also don't sell that much.

When this happens there is no value for the consumer because they don't download the music and find out about new bands. There is also no value to the artists because they are not getting exposure and there is no value to us because our success depends on their success. So we quickly changed our motto to "our music is for free". Now we have to worry about monetizing the crowd another way. We have to figure that out later.

J: Which is my next question: how do you expect to get paid if you are just giving away music?

A: Let me back up a second and finish answering the question, " Do we sell anything?" because we do have some music up for sale on our site. It's entirely up to the artist and the label whether we put it up for sale. So we have the capacity to sell tracks but we make the artist and label very aware that they probably are not going to sell any because the consumer behavior is not to buy downloadable music right now. So ultimately, it's up to the artist if they want to put their tracks up for sale.

Now, the answer to the next question of, "How are you guys going to make any money?" To begin with, we plan to make money, but we don't make any now. It's our belief that smart Internet companies are quick to learn from Old World companies and they are quick to try to develop new strategies for marketing and monetizing an audience. The way we are approaching it now is to say, "Listen, we don't have all the answers but we are going to try everything we can think of."

We have a huge demand to be able to purchase CDs from our site. We get email on a daily basis from consumers who are saying. "I love this band I found on your site, where can I buy it?" Unfortunately the independent music market is a fragmented one. There isn't one distributor that we can then plug in to an e-commerce solution, so we're working on how to solve that problem and we're waiting to see if someone else does it before us and then we'll just partner with them to sell it and split the revenue.

Also, we'll eventually start doing targeted advertising. We don't like banners but we think it makes sense to say, for example, that the electronica section of our site is sponsored by the Sony Memory Stick or whatever.

Also, we plan to sell downloadable music, if and when consumers begin purchasing it as well as, perhaps enacting some sort of subscription model.

J: If you are not making any money, how are you supporting yourselves as a company?

A: We're still very much in a product development phase. We're more interested at the moment in building a solid site, good relationships with other sites, and solid relationships with our label partners. It's cliche, but the phrase "increase shareholder value" is the right way to look at it (in the same way that the SIMA group doesn't recognize that positive value is the right way to look at MP3.com - not cash). If we focused all our efforts on revenue right now, without a sticky site with good content we'd have to blow millions on marketing to get an audience that was disappointed that spent little to no time or money on our site. In the long run, after our site is a bit more robust and relationships with those that supply us content are easier to manage (25% of our resources go to label relations), then we shift our focus from building to monetizing.

If you're looking for a more real-world answer than that - we don't make any money right now. In the beginning we "supported ourselves" off our own money and our families. Terry and Walther and I didn't get paid ANYTHING for about 4 months and when we did, it wasn't much. Then C|net (our principal investor) put in enough money for us to grow and build for a while before we have to start focusing on that.

J: Now, we've touched on subscription before in some other interviews but many people don't really understand what a subscription model is.

A: A subscription model would be like, "all the music at Epitonic is yours to download for one low price a month." – less – More from ZoomInfo »

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