2013-08-13

Co.Labs

Goodbye, Spotify: Is This The Secret To Artist-Friendly Music Distribution?

Artists are upset: The digital music revolution that was supposed to set them free is funneling more money to labels and rights holders than ever before. This company thinks they know how to fix it.



Even the most well meaning startups focusing on music discovery often neglect a growing industry concern--paying artists. It's a nagging problem that doesn't seem to have a good solution. That’s where Soundsupply comes in. The company markets itself as another service to help you discover your next favorite band, but they’re really after a much bigger goal: Changing the music buying process as we know it, and paying artists in the process.

The model is similar to the curated subscription services that have been popping up for everything from cosmetics to coffee. Every month, Soundsupply gathers 10 handpicked digital music albums on a theme and sells the bundle for $15 for a limited time--just 10 days. An obvious deal for consumers, this model of selling music has also been more profitable for bands than any streaming service, in extreme cases by more than 400%. Last november, cofounder Tim Mortensen told me that one of the bigger bands featured in a drop (the company’s name for their bundles) made $1,200 on 10 days of sales on Soundsupply. In the 3-month timespan before and after the drop, the same band made just $2.95 from Spotify royalties.

Although they won’t go into the specifics of dividing up payments, both Tim and his cofounder and brother, Eric Mortensen, said that each artist is averaging a little over $1,000 per 10-days drop. Another number that the brothers are proud of: Artists are paid that money about 48 hours after the drop ends, a quicker turnaround than almost any other service.

Soundsupply started in early 2012 as a side project of the Mortensen brothers, which is also how they settled on the limited sale period:

“I wish I had a scientific answer that talked about media cycles or pay periods, but the 10-day timespan was originally chosen because of how we had to run Soundsupply given the schedules of our day jobs. You can only 'go to the bathroom' so many times to respond to emails and fix website issues before your boss gets suspicious (or worried about your health),” says Tim Mortensen. “The one thing we've learned is that no matter how many days the drop runs, there are always people who miss it and email asking if they can still get in on a drop that has ended. We hate breaking hearts, but everything has to end sometime, right?”

In early 2013, the two took on funding from Lightbank, which was an early investor in Groupon, and turned the project into a full-time business. The pair have since partnered with multiple music labels as well as the Vans Warped Tour, providing a themed drop featuring artists on the tour. That drop sold so well that it prompted the pair to explore other similar partnerships, including an upcoming bundle for a charity curated by one of the Mortensens' favorite artists.

The consensus among the labels who have signed on so far is that Soundsupply drops are good for business. Chris Hansen, who runs No Sleep Records, says that a drop “creates awareness for the artists, the albums, and the labels.” Matt Lunsford, owner of Polyvinyl Records, concurs.

“We primarily view the drops as a way to increase music discovery for the artists on our roster,” says Lunsford. “Because Soundsupply's users are engaged and paying for music, it seems more likely that they will discover a new band through the service than if they were given a free download or stream.”

It’s tempting to view services like Spotify, Rdio, and Pandora as brand-new digital distribution mechanisms, but in many ways they’re working within the constraints created decades ago by the radio industry to move money around. According to these labels, Soundsupply represents a truly new take on leveraging digital media that they’ve never seen before. Selling bits in bulk makes money, paying for music creates a connection, and direct-to-artists/indie label sales means sharing the profits fairly.

[Image: Flickr user Melissa J. Muller]




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4 Comments

  • Bill Hewson

    I like this idea very much, it's a dead lift from Lester Wunderman's terrific invention, the Columbia Record club from the 1970's. pay 1 penny. Get 10  record albums of your choice immediately. pay "full" Columbia House price for 10 future albums. Everybody wins.

  • Marina Barros

    Soundsupply sounds like a good opportunity for the music industry to leverage their profits and achieve recognition among its customers. However, something that's not clear to me is how they're going to manage Spotify and Pandora customers, for example, to transition straight to their business. This because, paying monthly for the streaming services will provide the public a gigantic music repertoire each month whereas Soundsupply can only offer them a relative small amount of music, by paying a bigger amount than the former (I´m not even going on about people's music tastes). You could state the fact that the customer can discover new music and will actually own it for as long as he likes, but, writing as a music streaming service customer, I don't think these advantages could make me switch services at this moment.

    In my opinion, from what I've already read and seen about Soundsupply, the business doesn't necessarily compete directly with the music streaming services now, but it focuses on another market segment. Henceforth, I don't take this as the end of services like those mentioned above, but a warning of something that might get bigger and more refined each year, something that could possibly be a future threat to those streaming services and, therefore, which must be put on watch for the next years. 
    I'm looking forward to hearing more about businesses like Soundsupply!

  • Rory Mitchell

    Interesting point. With Soundsupply, you're paying more for less music, but with Spotify you're paying less for more music. I think it comes down to the type of music you want to listen to. Spotify provides easy access to wide selection of music for a small fee, whereas Soundsupply gives you 10 albums a-month, but they are emerging artists rather than established. 

    I wouldn't mind Soundsupply if it was cheaper, but at $15 for each set, it seems like I would be better off subscribing to Spotify where I will probably get the music anyway and more. 

  • DwDunphy

     Which is the problem every service with the intention of giving fair payment to artists will face -- can you make the audience care enough to stick with you, or are they going to crave the overwhelming capacity of choice they'll get with Spotify? As an artist myself, I'm constantly made aware that the music distribution side of things is merely about getting "heard" and the likelihood of my actually getting paid by them is minimal. But how else do you get heard anymore without the force-fed clout of a record label?

    So Soundsupply sounds great theoretically and the subscriber gets ten albums a month for $15. Sounds great, except that we're back to the premise that the consumer is going to like most of those albums. In an iTunes world where people cherry-pick singles, there is going to be little tolerance to anything that subscribers must grow to love, and no tolerance to stuff they don't like outright. That $15 looks on the outside to be a deal, but it won't seem like a deal if the consumer doesn't fall in love with most of the music.

    My music is on some different services that, I'll admit, I don't deal with personally. I like them in theory. They're hosting my work, and how could I not like that? But I receive their weekly eblast and it is an endless stream of Brooklyn beardies and dour Americana acts, and I wind up just ignoring that email. These are services that I should be supporting, but don't because of this incredibly narrow track in which they operate...and that's for FREE. I cannot imagine myself being with them for any length of time if I was paying money, either $15 or $5 or even $1.

    I wish it were different, for my own career and endeavors, but I have to view my output as "loss leaders," not because of the platforms that service them so much as the consumers who utilize them. If they're not getting bull's-eyes with every batch, they won't stay, and will likely never find me.