Corporate music disruption

Madison’s music scene continues to inspire digital music innovation — and vice versa.

From the pages of In Business magazine.

For the youthful team of Live Undiscovered Music, the 2018 Forward Festival, an eight-day celebration of technology and entrepreneurship that’s held across Madison, will serve as a launching pad for its new technology. Not only has LÜM (pronounced Loom), a music discovery and streaming platform, accepted an invitation to hold its launch party on Aug. 17 at Monona Terrace as one of the main events at Forward Fest, but CEO and co-founder Max Fergus has, rather appropriately, been asked to speak at the event’s Aug. 22 disruptive evolution showcase. As a startup, LÜM might not yet be as disruptive as drones or the “internet of things,” but given the charms of music, it might not take long.

LÜM is set to become part of a group of local companies that have developed digital technology to address longstanding shortcomings with the distribution of music. Whether Madison can legitimately be considered a digital music hotspot or is still trying to become one, there is no question the city is home to innovative new and established music companies that have developed unique digital technology.

The economic development benefits of a lively music scene have been demonstrated by New Orleans jazz, Nashville country, and Seattle grunge. While Madison does not have an identifiable sound, it does have a vibrant live music scene, thanks in large measure to the University of Wisconsin–Madison’s Mead Witter School of Music, plus the emergence of new music venues such as Breese Stevens Field and the Sylvee, and a history of local music legends such as pop/funk drummer Clyde Stubblefield and jazz/rock icon Ben Sidran.

Somewhat lost has been the development of digital music companies. We interviewed several new and established local companies that operate in this space, and all were in agreement that Madison is poised to see even more business development in the years ahead.

Looming disrupter?

Mobile app developers have been working to develop the technology in time for the national launch of LÜM’s iOS streaming platform, which will be preceded by a beta program for artists and fans. For an organic, homegrown application, this is pretty heady stuff, but while disruption is a distinct possibility, LÜM is really focused on how people engage and absorb musical content. Its music discovery and streaming platform will focus on making connections between up-and-coming artists and devout music lovers with the hope of creating a global digital talent pool for live entertainment.

By developing a platform based on social media networking and streaming, one that enables user-to-user and user-to-artist engagement, CEO Max Fergus and his staff hope emerging artists can earn a good living and their fans can enjoy music without having to wait for entertainment executives to tell them who the next great stars will be.

Fergus is not really trying to disrupt the corporate music business model, but he acknowledges LÜM’s potential to do so. At the moment, he says large players such as YouTube, Spotify, and Apple Music focus on the top 1% of corporate and mainstream music, and they make the barrier to entry for streaming astronomically high for artists.

Meanwhile, LÜM is not only concentrating exclusively on drawing emerging artists to its platform, but it’s also looking at the next generation of music fans — Generation Z and younger millennials — and how they interact with content. “The reason that LÜM could be disruptive is because we have streaming meeting the social aspect of music,” Fergus notes. “Music is supposed to be very social in its nature, and we are now connecting emerging artists with their fans and their communities by putting a streaming network on a social platform, unlike using AI and predictive technology like larger platforms do. We’re focusing more on the human interaction and the digital monetization with human beings.”

Fergus adds that a lot of people assume that his startup is trying to compete with corporate and mainstream music, and that’s not really true. The company is trying to create a platform that not only fixes the financial problems in the music industry, but also addresses problems associated with music promotion for emerging artists and music discovery for the next generation of fans. “I wouldn’t necessarily say we’re competing with any of these platforms,” he states. “They don’t even attempt to tailor their platforms to emerging music promotion and emerging music discovery. It might be something that they want to do, but currently they are not doing it in a way that makes me think we’re even competing with them.”

Nevertheless, LÜM co-founder Will Ploch believes the aforementioned large players have left themselves vulnerable to disruption. “There is no music application that is built on the social network,” he states, “so when you think of the bigger players, streaming isn’t their main focus. There isn’t a place for fans, artists, and venues to connect and a way to circulate that music and distribute it in a way that facilitates music discovery.”

Even though the company’s founders and staff have strong Madison ties, they gave some thought as to whether Madison was the right place to build this platform. The group includes engineers and computer scientists that had full-time jobs in other places, but given all that is happening locally in the music, technology, and entrepreneurial spaces, they opted for the Capital City. LÜM recently moved into the new Spark Building, which is a hub for innovation with entrepreneurial resources, and it views Wisconsin and Midwestern colleges and universities — as well as high schools — as deep reservoirs of passionate music fans open to discovering new artists and relating to them in a highly connected way. They will be the brand ambassadors that offer testimonials and create a viral effect, which LÜM views as vital to its success as it grows and scales over time.

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Jammin’ in the void

As its name suggests, the Madison-based Broadjam music community website was founded to help independent musicians and bands promote their music online and build a fan base, and it has evolved by enabling them with web-based promotional tools such as the ability to sell MP3 music downloads, buy music software, submit music for review by music industry professionals, and gain feedback by taking part in peer song reviews.

The Madison-based Broadjam music community website was founded to help independent musicians and bands such as Sunspot (above) and Wurk promote their music online and build a fan base.

While Broadjam has employed different technologies over time, all the while building a large online database library of searchable songs for fans and artists alike, its business focus is still the same. In maintaining that focus, co-founder and CEO Roy Elkins says the company has built the world’s largest social network focused on musicians and music lovers.

Broadjam also helps musicians get their music placed in film and television, advertisements, and corporate video. Yes, Hollywood occasionally comes calling, and its requests can be in the niche realm.

One time, Broadjam fielded a plea for a song with a flamenco guitar and a Portuguese singer, and an obscure musician from New Jersey ended up getting the gig. “That’s always a thrill for us because most of the people that deal through us have day jobs and they are raising a family, and in many cases, they are doing this [performing] on the weekend,” Elkins notes. “So we’re thrilled a lot of times when people like that make connections and we can help them out.”

In Elkin’s mind, Madison has potential as a hotspot for digital music innovation because it has a world-class university with an outstanding computer science program. He also mentions that his previous employer, Sonic Foundry, started here and set a number of standards for using music software on the internet. He notes that Madison-based Musicnotes is the largest digital distributor of sheet music and Full Compass Systems, the audio, video, A/V lighting, and musical instruments dealer, also is part of the local digital music “ecosystem.”

When Elkins started Broadjam 19 years ago, the term “disruptive business model” wasn’t yet a common part of the vernacular. He was simply trying to address a couple of deficiencies.

“One of the inspirations for the company was that there just wasn’t a place online for song writers and composers,” he recalled. “It was all about the artists and the albums and the promotion of the artists.”

Seeing a real hole on the publishing side, especially on the visual technology side of publishing because there wasn’t a lot of data around songs, Elkins sensed that at some point songs would be individually searched even though it was still mostly an album-based world. “We saw that eventually it will become a singles-based world, and we wanted to make sure we had a lot of data wrapped around those singles so people looking for music could search by deep levels of metadata,” he explained. “If you want to search by 120 beats per minute or by local or certain themes or certain subject matters, certain moods, you can do that on our site. We were one of the first ones to do that.

“I don’t think we consciously disrupted anything. We didn’t set out to disrupt things.”

While there always will be a market for albums, online search has given singles a leg up. “When searching online, the search is often for singles and individual songs,” Elkins notes. “Whether or not the album goes away, I don’t know. I think that’s here to stay, but it’s going to be a singles-dominant world when it comes to the internet.”

As a result, Broadjam has roughly 185,000 customers from 190 countries. About 60% to 70% of its customers are from the U.S. and 30% to 40% are overseas.

Regarding Madison’s music scene, he sees it as a burgeoning environment and as a secret that’s getting out as more people visit and enjoy what the community has to offer. Thanks to essential ingredients such as diverse musical talent, business acumen, the Mead Witter School of Music at UW–Madison, respected promoters such as Frank Productions, and legacy artists, the future looks bright, as well.

Elkins is the founder and lead organizer of the new Between the Waves Music Conference, an annual gathering that serves as a professional resource for songwriters, composers, and independent musicians. In addition, the city has what Elkins called an incredibly strong hip-hop scene, a solid folk music following, and a pretty good rock-metal scene.

Elkins says the community of Madison, as a whole, is very supportive of the arts. About the only chink in the armor is a lack of state government support of the arts, but Elkins believes that lawmakers can’t ignore the economic benefits of a vibrant arts economy for long. “Let’s just look at it from a real educational perspective,” Elkins suggests. “We know that kids that study the arts do better in school. They have better grades. They are involved in teams more. They know how to finish projects.

“When you try to learn a very complex song, it’s a challenge, and when you get it done, it’s very rewarding,” Elkins adds. “Those skills are general skills that are applied to life. We know they get along better. We know there are fewer problems in the future.

“There’s all kinds of research on kids who study arts and kids who don’t,” he adds. “That doesn’t mean the kids who don’t are bad kids, it’s just that the arts usually are the first programs cut and maybe it should be the first program that stays.”

Since there truly is an economic development angle to the arts, Elkins says it’s important to note that technical innovations in music are not going to come from New York, Nashville, or Los Angeles. “Those are pretty entrenched camps,” he states. “The technical innovations are going to come from places like Madison.”

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Notable notes

The motto of Musicnotes is “Sheet Music Anywhere,” and thanks to computing technology and more than a little imagination, the Madison-based service has pioneered the dissemination of downloadable sheet music. Musicnotes is equal parts technology/product development, e-tailing (with more than 6 million direct customers), and publishing as it licenses from publishers and creates a good deal of the global content it offers.

With more than 300,000 arrangements in a catalogue of digital sheet music that covers the entire spectrum of musical genres, Madison’s Musicnotes is celebrating its 20th anniversary.

With a catalogue of digital sheet music that now includes more than 300,000 arrangements covering every genre of music, the company supports songwriters, artists, and publishers of all sizes in nearly every country. Somewhat tongue in cheek, Executive Chairman Tim Reiland likes to say that Musicnotes had the iTunes business model before the launch of iTunes, which wasn’t until the spring of 2003, more than three years after the local company’s first download. “We were thrilled when Apple launched iTunes, as it made it much easier to explain our business,” he jokes.

Now celebrating its 20th anniversary, the digital sheet music retailer has served those 6 million distinct customers with more than 35 million sheet music downloads. As a testament to its staying power, 150,000 people visit its website on a daily basis and, collectively, they buy 15,000 pieces of sheet music every day.

Musicnotes is the undisputed leader of its music industry niche with more than a 50% market share. With apps available for iOS and Android, as well as Mac and Windows desktop platforms, it’s about more than just downloading sheet music to print off. Increasing the ease with which musicians of all experience levels can access music is helping to change the landscape for musicians and performers, alike.

Elliott Kosmicki, director of operations–marketing and product experience for Musicnotes, says the buying experience itself changed the landscape. “If you’re looking at it from the buying and post-purchase experience, it’s really an opportunity cost for musicians,” Kosmicki states. “Before Musicnotes, musicians were traveling to music stores that had the sheet music they wanted, or they were photocopying from friends, which is legally not the right way to go, and many times they were buying an entire book when they only wanted one song. They’ve got that opportunity now, within seconds, to find the song they’ve been looking for and on a mobile device that’s ready to play.”

Speed to market isn’t the only advantage. What also comes into play for artists is they can have PDF sheet music that previously was purchased from somewhere else or scanned in from books they own. They can bring that into Musicnotes’ mobile app and have a single place for their entire library, so they no longer need to pick and choose music that they can pack into their bag. They also have shopping built right into the mobile app, so there will be no more need to come to the website to make a purchase.

Since the sheet music is interactive, users have more than just a static sheet but an interactive sheet that can be played back. Along with playing it back, a musician can click on start-and-stop points, and at those points they can slow the music down and “actually learn that piece more intentionally versus on the static side of things, being able to just read it and play it,” Kosmicki notes. “It’s quite a different experience.”

As an accompaniment piece, singers in particular often need a pianist to play along and practice with, he explains. With the interactive sheet music, it can actually provide background music so that customers can have the sheet music playing while a singer is practicing a song.

The interactive sheets can also be used for transpositions, auditions, and the sheer joy of rediscovering any song that a music consumer or a musician might look for.

Musicnotes recently reached the $75 million mark in royalties paid to music publishers and songwriters since its launch two decades ago, but it’s website is designed to support both the creators and the end-users of music.

Reiland was an original investor in
Musicnotes, which was founded in the late 1990s by Walter Burt, Kathleen Marsh, and Tom Hall and was spun out of the Madison-based company AR Editions. The technology to deliver digital sheet music was developed in the 1990s at AR Editions and dovetailed well with the unfolding dot-com surge.

That surge was interrupted by the dot-com meltdown of 2000 and the economic setbacks of 9/11, but “we had a really good business idea and it thankfully survived all of the chaos,” Reiland notes. “The good idea was that digital delivery of sheet music was a perfect application for the internet, as it could disrupt an incredibly inefficient traditional marketplace.”

With all the focus on being “with it” from a musical standpoint, it’s somewat ironic that the song that’s in Musicnotes’ top 10 sellers everyday is “Somewhere Over the Rainbow,” which was originally performed almost 80 years ago by Judy Garland in The Wizard of Oz. “They want to perform it on piano, and they want to sing it,” Reiland notes, “and bands want to perform it, too.”

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Murfie’s law

Rex Mangat is quick to say that Murfie, the music collection platform he oversees, has always strived to help music lovers cultivate deeper connections with the unique soundtracks of their lives. Its universe, he notes, has been built by music collectors and for music collectors.

Disc jockeying for position: Rex Mangat (center) and the staff at Murfie offer a cloud-based service to help music lovers transform their CD collections into a digital format on their favorite device.

That certainly was true at the time of its founding as a cloud-based service to help music lovers transform their CD collection into a digital format they can take anywhere on their favorite device. Instead of buying music from Apple, users in the Murfie.com network could buy, sell, or trade CDs with actual people.

Today, it not only means digitizing collections and providing high-fidelity sound, it also means streaming on mobile apps for iOS or Android, desktop, and a variety of premium hardware devices.

Mangat, who is Murfie’s chief executive officer, can only anticipate a constant state of evolution as the company grows in terms of user engagement and inventory of discs. Murfie has accumulated more than 900,000 albums, which would make it the largest high-fidelity music marketplace in the world. Mangat would venture to say Murfie’s user base is the most passionate music community in the world, simply based on how they use the site, their actions, and their transactions.

“Our service has always been evolving as more people start to demand higher quality listening experiences,” he states, “and we’re planning on a whole slew of new features, playback features, and collection-management features that will allow people to digitize their collections and provide a more meaningful, convenient, and higher quality listening experience.”

The small, hard-working staff tends to alternate between building the album collection that is put on the market and focusing on digital development and experience.

As for Murfie’s potential for disruption, Mangat says music is disruptive by its very nature. Before Matt Younkle founded the company in 2011, the idea for Murfie.com came to him after relocating, and the hassle of moving a collection of several hundred CDs made him think there had to be a better way. In the future, Mangat believes Murfie is on the cusp of capturing a new, resurgent interest in high-fidelity audio, and he’s excited to see how that unfolds. There’s a lot of demand for people to enjoy music in a way that speaks to them on a deeper level, “and it’s an exciting and humbling opportunity to help people on that journey,” he states.

None of this evolution or disruption would be possible, Mangat believes, if Madison were not a phenomenal place for music innovation. Mangat, who has been a local disc jockey for 10 years, is often surprised by the mix and variety of people who attend his shows. “Not only do we have the potential to be a digital music hotspot, we’re very much on our way there,” Mangat states. “We’ve got a talent pool that is second to none. We also have a striving, collaborative startup community, and most importantly, we have a city with music in its DNA.”

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