Three partners are helping artists and businesses promote themselves.
by Mike Kravinsky
The music business has always been tough; but these days, if you offer something new or different, it can be a downright difficult to develop a fan base. There are so many outlets, artists get lost in all the noise.
Record labels are still the best way to "make it" in the pop world, but the labels don't generate the kind of money they used to. As a result, most all of their releases appeal to the lowest common denominator. They play it safe - trying to guess what sells, even if they're wrong. There are so many examples of record companies getting it wrong. The classic one is Decca Records turning down a chance to sign the Beatles because an executive said, "We don't like their sound and guitar groups are on their way out." That was 1962 - when there was money. Imagine what it's like now.
Musician and entrepreneur Johnny Hwin, along with AJ Magnuson and Nick Lane-Smith, created a platform to help unknown struggling artists and small businesses create a professional social network presence. "I'm passionate about both technology and music," says Hwin. "Music is my artistic passion. It's how I hope to get in touch with people on a deep level... and technology is my passion on an intellectual level - how I hope to contribute to society."
Hwin originated DamnTheRadio as a way to combine his two passions. He teamed up with co-founder and fellow Stanford graduate AJ Magnuson to help with the design. "We both played music," says Magnuson, "So this was sort of attractive to us because we see a lot of problems promoting small bands." With no real business plan in the beginning, Hwin and Magnuson worked with the help of a few interns from Stanford. "It was just two guys hacking on a cool idea," says Hwin.
Finally, University of California graduate Nick Lane-Smith came on board. His four years of experience as a lead architect at Apple rounded out the management team. For Lane-Smith, Damntheradio was his first venture. "It was a mixture of the excitement of trying something new and trying to make money with an idea of your own," he says. Lane-Smith also notes that there was a lot of anxiety about whether or not they were on the right path at all.
The original concept of DTR was to provide a platform to find live local music by listening to clips of bands that were appearing in an area. "Like a Pandora for concerts" is how Hwin describes it. They sought out investors, but found there wasn't any money available for what they envisioned. "When we were building the prototype, we found that the climate for raising money for any sort of music venture... was almost impossible," says Magnuson. The reason was that the cost of streaming music was prohibitively expensive due to royalty payments owed to record labels. It was so expensive that other music sites were getting shut down or being sold off below market value.
It took a while before the trio realized that they had to change direction. "Knowing when to pivot is really important," says Lane-Smith. "We were resistant to giving up on the old product and moving on with the new one," he remembered. "We had a lot of emotional investment. We should have just looked at the numbers and said, 'Yea. Time to get out.'" Personal finances were also getting tight. "I basically went through savings," says Magnuson laughing. Because he was racking up a lot of credit card debt, they decided to rethink their idea.
What occurred to the partners is that they should flip the concept. "We saw this opportunity to move away from the consumer business and move to more of an enterprise business; where our customer wasn't the user, the customer was the band," says Hwin. The record label became a partner rather than a competitor. Labels now would pay them to build Facebook promotions for the bands. Within five months they launched DamnTheRadio.com.
This time they hit on the right concept. Two months after the launch, DTR was accepted into I/O Ventures; a high tech startup incubator in San Francisco. A month after that, DTR signed up such name bands as Linkin Park, Dave Matthews, and other bands using their platform on Facebook. CBS, Gatorade, and Wrangler Jeans all came on board. Four months later, the three partners received a reported low seven figure offer to be acquired by FanBridge, a direct marketing firm in New York. A month later, the deal closed. This all seemed to go very fast. Hwin says the journey from original concept to sale took two years. There were no guarantees of success. Without creative thinking and the flexibility to change, DTR would have closed shop.
Currently, DTR, with the help of I/O Ventures, is expanding to television, film, and ad agencies. DTR is a tool for record labels and ad agencies to best leverage their audiences on-line, according to Hwin. Magnuson agrees. "Before this Facebook phenomenon (record companies and ad agencies) didn't really do a lot of business oriented things on-line," he says. Their focus is not only on bands, but also on small and medium sized businesses - the do-it-yourself crowd that doesn't want to spend all day doing promotion. The basic service is free. There is a premium service, with analytics and other features, that costs $30.
What they're doing is welcome by Facebook, according to Magnuson,."They are supporting a number of people who are building music and small business solutions," he says. He believes that conversation in social media, particularly high quality conversation, will reward people who are more prolific. "As a musician, I can focus on making a great track every week and putting out videos... talking about the process; and that will lead to my promotion."
