April 27th, 2009


I thoroughly enjoyed a recent email exchange with ReverbNation’s Co-Founder and COO, Jed Carlson, who shed some light on the company’s background, positioning and perspective on music 2.0.  The company, which has arguably taken the lead in affordable and scalable music marketing solutions over the last three years, has been consistently rolling out new features that have raised the bar within the online music industry by providing truly turn-key solutions for artists and music industry professionals of every caliber, function and style.

Although ReverbNation has been on my radar for some time now, their proposition genuinely piqued my interest when a good friend shared his enthusiasm for FanReach, the company’s free email marketing service, about a year ago.  Later and in an unrelated matter, I began researching the various players in the digital distribution realm.  ReverbNation came up.  In fact, every time I discovered a faster, better, cooler way to go to market as a musician or promoter, be it music tech or otherwise, Jed and his team appeared to have a stake in it – and a palpable competitive advantage, no less.  I needed to get to the bottom of this and do it quick-smart… how is it that I’m not in the proverbial know? Pfft.

Jed, for every ‘solution’ on ReverbNation, there’s at least a handful of small companies specializing and excelling in that particular offering.  How does ReverbNation compete, differentiate and manage such risk?

I would argue that we compete well because of these 3 things:

1. We listen to our Artists.  It sounds obvious, but over 80% of our new features come from user suggestions.  We have never claimed to have all the answers, but we do focus on asking the right questions and listening, carefully.  Lots of companies talk about how they know what the future of music is.  We fully acknowledge the uncertainty of the future landscape, and instead focus on the realities on the ground in front of our customers.  Who knew that Twitter would be important to musicians a year ago, for example?  That doesn’t mean we don’t think about the future.   But Artists need action today, or there may be no tomorrow for them. 

2. We are marketing technology experts, with a minor in music.  Many competitors are born of music experts that are trying to solve a specific music business problem of the day.  That’s fine, but it’s a bit like being an expert in 727 airplanes versus being an expert pilot.  The landscape (airplane, in this analogy) is changing constantly.   Artists need a marketing partner that will automatically take advantage of the latest opportunity that technology offers for them, versus someone that can fly that specific plane really, really well.  A great example of this is our oldest solution, the FanReach email product.  In the early days, it served the basic purpose of sending emails to fans for the Artist.  Today, FanReach can be used to specifically promote a show, grow a street team, invite fans to a CD Release Party, and can even be set to automatically ‘find’ more information about each fan while the Artist sleeps at night.  Why?  See #1 above. 

3. We take a holistic approach to our solutions.   Artists, in general, don’t sit around and craft a ‘Facebook Strategy’, think about how to position their music at Amazon versus iTunes, or worry about how to approach Twitter as a marketing vehicle.  They think about ‘promoting’ the music that they worked so hard to create.  Our job is to worry about all of that for them, use the data collected from those that came before them, and give them the best tools to execute a more effective marketing campaign than they otherwise would have.

Notwithstanding the one-stop-shop approach, how is ReverbNation aiming to change the independent music management and promotion landscape?

Our goal is to create visibility and options for the Artist.  That doesn’t mean that we don’t respect the hard working companies and individuals that orbit and support them − quite the contrary, in fact.  Since our earliest days, we have supported record labels, managers, venue operators, and promoters in their endeavors to bring music to the people.  We even give them the same solutions to execute and track marketing campaigns on behalf of their Artists.
In the past, the potential value of an Artist has been a very difficult thing to measure.  Our solutions can help solve that.  We believe that the future financial value of every Artist lies in their ability to engage fans.  It isn’t just the number of fans, but how often and how deeply they can engage them.  We aim to change the landscape by elevating Fan Relationship Management (FRM) as the key to success, and positioning the company as the preeminent partner that any Artist can have in that endeavor.  But let me be clear, many Artists are NOT interested in financial success.   That’s cool too.  Our solutions can aid them in just getting the music out to their fans, and we see that as part of our mandate.

As a technology company, what propriety technologies have you incorporated into your offering to ensure a high barrier of entry for competitors?

Our barriers come mostly from the breadth of services we offer (back to the one-stop-shop), the specific innovations we offer versus other similar tech, and the traction we already enjoy with lots of happy customers.  It’s no secret that over 350,000 Artists are using the platform today, and hundreds more signup every day (90% from word of mouth).  We are humbled by this popularity, and it speaks to how we listen to our users.

ReverbNation is literally a caldron of thousands of marketing experiments being carried out every day by Artists from hundreds of countries, and all walks of life.  We are able to synthesize the best practices out of the marketing ‘noise’ and implement them into technology that can be applied by virtually any Artist, with a high probability of success.   A great example of this is the Exclusive Download Widget that we provide.  We observed that Artists were being very successful at exchanging exclusive content (a new song, for example) for a mailing list signup (something very valuable to Artists).  We codified this into an easy to use widget that Artists could place on their web pages and blogs with a simple cut and paste.  This widget exchanges song downloads for an email address from the fan.  Artists who use this tool grow their mailing list at a rate of 600% faster than those who don’t.  Do Artists want solutions like that?  Um, yes please.  We knew they would, because we observed it working for some of them already.

It appears that ReverbNation opts to develop technologies and features in-house rather than form strategic alliances to expand its suite of tools.  Why?

We are very competent at building technology (it’s our pedigree), and our strategy has always been to evolve over time in a way that was more complete and cohesive. Partnerships have an inherent attribute of being challenging to integrate into the big picture that we promote. That said, we have identified some key areas where we will partner in the near future in the best interest of the Artist.  We aren’t against partnering, if it can be done in a way consistent with Artists’ goals.

Our internal credo is “Artist First”.   If a feature or product doesn’t first help the Artist, we don’t do it.  Period.  When partnerships can work inside of this belief, they are a real opportunity.

Free email marketing was a big win for ReverbNation in terms of user acquisition.  How do you intend on riding this wave?  What are the monetization prospects here?

We are currently operating on a ‘freemium’ model where we offer up the best free services artists can find anywhere, but still provide them (at a reasonable price) the services they need when they outgrow the free stuff, and can afford to pay us for the services.  This accomplishes our goal of artist acquisition as well as our mission to get artists involved very early in their careers when they don’t have money to spend, and need our support.  We believe in helping EVERY artist succeed, and we don’t feel that we should participate in their success until they achieve it. That reciprocity − I’ll help you now, but when you get big don’t forget about us − model jives well with our culture and enables the ‘Artist First’ philosophy upon which we founded the company.  Artists are people.  And people don’t forget who helped them grow.

Digital music distribution, in my opinion, is an awesome offering.  Are you identifying a significant migration of users from CD Baby and TuneCore to ReverbNation?

Yes, we have users migrating.  But CD Baby and TuneCore are awesome in what they do.  Again, this goes to the core of the ‘one-stop-shop’ mentality.  When you really think about Digital Distro, the key is driving that one additional sale, not price-shopping on the service that makes it possible (we actually promote the CD Baby service if it will help the Artist sell more music).  If an Artist partners with a service that can help them sell even one more album per year, they win.  Our goal is to focus on the top line growth for artists, and our solutions help them do that.  Artists need to be everywhere fans and potential fans might be − offering up their content and selling some of it when they can.  Fans go where fans go, and Artists need to be there to meet them.  Our digital distribution service is special in the way it helps them sell more music, not in how it transfers their song file to iTunes.   Anyone can do that.

Other than the pricepoint, how does ReverbNation’s digital distribution solution differ from the other players’?

We try to be competitive with the other offerings on pricing, but the big difference is in how we help them sell the tracks once they are posted to retail.  Every one of our widgets, for example, offers links to buy the tracks at retail, whether it is posted on their MySpace, homepage, or blog.  We even introduced a ‘retail links’ widget that automatically searches iTunes and Amazon for the artist’s merch and music and pulls those offerings into one widget they can place anywhere.  Our email solution automatically integrates the ‘buy links’ into the messages that Artists send.  These are just two examples of how we help the Artists transact more business.   Digital Distribution is really just a means to an end.  Direct-to-fan stores are gaining traction right now as an alternative to selling at retail, and we hope to be in that game.

What may we expect ReverbNation to look like and offer over the next year or two?

The quick answer is that ReverbNation will be more ‘complete’ than it is today.  We will have more artists involved, better feedback from our users, and we will be able to help with more of the ‘pie’ of services that Artists, and those that serve them, require.  I also expect to have a couple of very innovative revenue solutions for Artists to better monetize their content than are available today.  If we can make Artists more successful tomorrow than they were today, we have accomplished our mission, and the company will be a success.  We don’t expect to be successful if our Artists are not.

Source: http://www.wearelistening.org/blog/reverbnation/

Posted by: Annechien