In a not so previous life (more like a current one that is rapidly changing), I'm in the Internet radio (aka music on demand) business. Why? Because music on demand as an Internet service represents Internet media distilled to its most concentrated state. Or should I say CAN REPRESENT. Internet media distilled because music fans can find wildly narrow music interests, combine and control them in very personal ways and share those combinations with their social network of friends (and "friends online"). Internet media distilled because bands can connect with and sell to fans in an almost frictionless way. Not everyone who is in the (old) company knows this.
What does a band/artist need from Internet Radio or Music on Demand?
Fans, preferably rapid ones, that buy their music/attend their shows/market by telling friends. Music sites provide additional value for bands/artists by bringing fans to the band pages. And, combined with someone like ReverbNation (www.reverbnation.com), music sites help the band capture the names/emails/addresses of their fans and help fans market the bands on their own profile pages using widgets containing the band's music.
I don't think this connection between bands and fans uses a blanket approach. Band uploads their music; its played for 5 million people and then HOPE there is a match. No, a much more targeted approach can simply utilize fans voting on music. For example, as a band receives votes look to see what other music those people who voted also like. If John likes a Band X song and a Juanes song, then maybe someone who likes Juanes will also like Band X - and sending people suggestions about listening to Band X if they vote positively about that Juanes song.
This begins to introduce likely potential fans to unsigned/small bands they may like. You can also make it easy to be added to that band's email list. This can also drive music sales for Band X's music (if they've uploaded it) and ticket sales for Band X's shows (if they've uploaded the schedule). A fan like John may also be able to place a widget of Band X's music on his social network profile page. By making this simple connection between Bands and Fans, sites can generate real value to bands, encouraging them to keep their uploaded information fresh.
Why should anyone do this?
Ignoring the potential for creating a more engaginig experience for consumers, converting more of them to Music (Radio) listeners, there are two real revenue opportunities that result.
1. Local Advertising. Many advertisers have local advertising budgets - some examples include McD's local franchisees, Ford's local dealers and Pepsi's bottlers/distributors. Tapping into this budget is more than just "geo-targeting" their advertising to local markets; many advertisers are interested in a good context for their ad message. Creating a "Local Music Site" centered on the performances of local bands in major urban markets could be such a context.
2. Record Company. The future of the music business has always been tied to the ability of record labels to identify and nurture music talent that can sell a lot of records. Every label has a stable of established artists combined with bands that "have yet to break." Identifying which bands should be signed - the A and R process - and then "breaking" them are two different tasks. The first is done by people scouring local clubs and listening to "demo tapes"; the second is mostly marketing - getting pr coverage, getting airplay on radio, marketing online, making personal appearances and touring. Separate from their business model, labels are continually scouting for new talent to fill their pipeline and trying to market that new talent to break them.
If a musit site creates a relationship with local and regional bands who are not signed to a label or are signed to small, local label that helps them find fans also gives us early and unique insight to bands that have an audience - with specific insight as to how well a local band may perform nationally. A new kind of record company can take an "equity stake" in these bands, sharing in the proceeds of revenue they generate at shows, in music sales, in licensing and in merchandising in return for helping to "break" them by giving them broader exposure on other media channels (online, magazine and events); by providing research to radio programmers showing how a band's songs score against their existing playlist; and by introducing advertisers to their music to be used within their advertising. You could also organize and own music tours featuring these bands. Some of this may be done in partnership with a major label and some may be done alone.
Alright, if you got this far, you're probably wondering why this post is even here; mostly its because I LOVE to talk about the music business! Even incoherently. But, also, its because creating a (new) company that helps you find your best customers means understanding that, just like a band's core following (rabid fans) drives the band's economic success, you have to find your rabid fans.
