Wednesday, 26 September 2007

Nice boys: The entrepreneurs

Last night 2 of the founders of, Martin Stiksel and Felix Miller made their first public appearance since they sold their website to CBS for a rather lovely chunk of cash ($280 MIllion). I'm not going to attempt to give a blow by blow account when The Guardian's Jemima Kiss does such a great job.

Its' great seeing a bunch of conviction entrepreneurs (and for me , local boys) creating success by staying true to themselves, rather than becoming the oxbridge/ silicon valley chino clones that the investment community feels more at comfort with.

Tie-ing in with my last post about Music 2.0 it was interesting to get their take on how the music industry is being disrupted by digital technologies. Whilst everyone agrees the music majors will survive (in some form at least), the message coming over loud and clear is that now the average person has more choice of music to listen to, and that is stimulating music appetite as people are more likely to come across songs that 'do it' for them.

The industry is changing with more 'bottom up' fanbase led music success slowly competing with the traditional 'top down' model characterised by the majors with their heavily marketed internationalised stars. Thus the much vaunted 'long-tail' business model is having its first major real world success with music - note Elvis dominating the charts in the UK recently.

To me, its part of the new paradigm where successful digital businesses need to be 'porous'; consider themselves more like just one of the stakeholders in their business, skimming off the cream not gulping down the whole pint. Ultimately these businesses are 'owned' buy the people who use them ( create the content in them,
therefore make them) and the trick is to make money by helping them do what they want to do, not by simply working out how to extract cash (please note GMTV).

The one piece of 'gossip' they hinted at quite clearly is the (frankly obvious) notion that TV network CBS will take the underlying technology of (audioscrobbling or working out who likes what based on actual behaviour) and apply it to TV. I think Sky will be looking on with interest, and I think BARB should take note too; yes 'video-scrobbling' will be great for audiences in finding new shows - it may also help CBS create a competitor to the dominant Google in personalised advertising.

Finally, I want to thanks my mates Judith and Michael of Second Chance Tuesday for putting on such a great event; they just keep adding to their long list of the biggest names in disruptive digital businesses who talk and share with those who attend.

Wednesday, 5 September 2007

Music 2.0

End of the Summer break :(

Today’s post is inspired by a conference I went to last night marking the London return of the seminal internet networking event, First Tuesday.

The keynote came from my ex bosses boss, Patrick Vien who is now the CEO of Warner Music International. I found the breakdown of Warner’s future plans both clever and disappointing: He spoke wisely about experimentation and education as they look at new business models, new revenue streams, taking more control of artists ‘multi-platform’ strategies (including live performance) and re-analysing revenue streams including advertiser funded music. Warner will survive and remain a big player in the future, and might even get there with less pain that the other music majors.

But equally at the end of the speech I felt disappointed; partly because the topic of the moment, DRM wasn’t touched upon. More significant was that whole thought process behind these clever actions was that of a controlling, top down organisation working out how to leverage value from content they have ‘created’ and decided to market. In fact majors now maximise their efforts on a very few international artists – so weirdly the internet has created less choice, from the majors at least. Like I said, Warner and the others will be around, making nice profits, but I still see pain for them as they contract and change– and it does also seem like they are cutting out the ‘nursery slopes’ where the new 50 Cents get exposure and learn their craft.

Who I found much more exciting, were the new ‘bottom up’ players that were about enabling and helping consumers discover music they like, as opposed to convincing them to purchase through marketing and advertising. These are disruptive industries that are changing the face of the industry, the ones taking a positive lead and forcing the majors to change their models.

There were 2 very interesting players there, and 2 complete stand outs.


Jamendo is somewhere between Bit Torrent and iTunes that essentially gives you free music, with ad revenue split 50/50 between the company and the artists. You an also chose to ‘donate’ to artists you like. It doesn’t seem to come with many strings and I can see it filling a successful niche helping new acts gain exposure. It’s got a mainland European tinge to the music, and if you’re not a nationalist snob you can find some interesting artists on it.

Another great niche player helping new artists is Sellaband which in a non-sexy description allows you to become a ‘business angel’ investing in bands you like for $10 a pop and sharing in the bands profits, as well as discovering great music. Again, I don’t see it replacing EMI, but it IS a stepping stone to the big time. It’s fun to use and helps new talent shine without the Pop Idol schmaltz. I think I’ll enjoy this site.

Stand Outs:

There were 2 sites that I thought, yeap, I can see them being big mainstream players.

One is already established in the US, but blocked in the rest of the world, except apparently the UK where it hopes to officially launch soon. I think you may need to make up a US zip code though (I used to love watching Beverly Hills 90210). Pandora is personalised radio – you tell it what you like and based on algorithms its helps you discover and listen to new music and favourites. You pay extra if you want the to minimise ads and get some extra functionality, and at $3 a month, it seems quite an affordable price-point. Its good fun and me and my partner are hooked already.

What kind of impresses me is that instead of this being a purely software led operation, they actually have a team of 50 musicians analysing the musical qualities of tracks which then gets fed into the system. It has a nice interface and I like the way they’ve integrated the advertising into the site. Pandora already has half a million tracks already covered, classical coming next – I found to hard to find an artist they didn’t have – and a ‘wiki pandora’ is on its way too on top of their facebook widget. If they can sort out the very complex issue of international rights issues, they’ll go far.

The last site on today’s post is we7 from music via web pioneer, and music legend Peter Gabriel - he previously pioneered legal music downloading in Europe. Whilst we7 will let you buy music, its main selling point is free legal music, DRM free. The music from major artists and new acts gets paid for by a 10 second advert. The advert expires after 4 weeks, and then you have ad free, free music. It’s a great way of experiencing new tracks and I really see this has a place within the wider marketplace. The CEO Steve Purdham seems to really ‘get’ where the industry is going and I see them reacting well to the changes within the marketplace.

Take a look, discover and please post your thoughts by hitting the comments button.