Coming out of the shadows of Western Santa Monica, California is small company looking to revolutionize the digital market for artists. Topspin Media is set to release online marking software services to artists in the next couple of months. The idea behind the Topspin mission is to directly connect artists with their fans on their own, focusing on profitability for the artist, and helping them earn their own living. Founder Peter Gotcher, former CEO of Digidesign and creator of ProTools, hopes this new model will supplant the old business models of the music industry that have been under duress since the recent advances in digital technology.
Topspin is focusing on is technology, demand generation, and marketing. The first product being offered is called the Topspin Manager. This service is a fan relationship management and direct marketing tool. This service gives artists content management and fan relationship tools needed to distribute and promote music directly to their customers.
Aspects of this service include a content management system that hosts music, photos, and video, as well as a rights management interface that allows the artist to decide how their music will be made available. It includes a commerce engine to take care of sales and orders with the ability to set prices and usages (some songs can be given away, expire after a set period of time, or only made available to fan club members). The fan management system collects emails and organizes demographic information on fans like age, location, how many times music or video is streamed, sales history, music sharing, etc. The product creation tool lets artists develop their own content like membership subscriptions, ticket and track products, email offers, and other ways to offer their catalog to fans. The reporting feature tracks site visits, song streams and downloads with user detail all with customized charts. This is a business-to-business operation, and can be integrated into any website or social-networking page of the artist.
David Byrne and Brian Eno released their album, “Everything That Happens Will Happen Today,” using this service on their website (www.everythingthathappens.com). Other artists given the chance to test drive this service before it is made available to the public are The Dandy Warhols, Futureheads, Jubilee, and several others. Topspin is known to have two other products in the works, but the company is keeping both on the hush for now. The second product, other than The Manager, deals with artists separating themselves and reaching new fans with their music, a problem that acts small and large have to deal with. The third product is a tool for artists to analyze their business from a perspective that allows them to focus on what is and isn’t working for them.
Topspin has a refreshing outlook on the music business to go along with their upcoming line of product services. CEO Ian Rogers was keynote speaker at the Grammy Musictech Summit on November 6, and discussed the current status of the industry and what he and his company think about the future. In regards to plummeting physical sales, an increase in digital sales that does not make up for it, and the value of a unit of music going down, Rogers had this to say: “I don’t care.” That’s a bold statement. So what does he care about?
Rogers spoke of the health of the music business and there being more of a demand for music now more than ever before. To quote Chuck D of Public Enemy, “There’s nothing wrong with the music business. The problem is with the CD business.” Consumption of music is not in decline, shown by increases in iPod sales (59%), P2P file sharing volume, and audio streaming (25%) in the past year. In 2007, 1.6 billion decisions to buy music were made, up from 1.3 billion in 2006. Worldwide music sales increased by 40% and North American concert revenue is up 8% and at an all-time high. What has changed are the physics of media space and the way we interpret success.
Some of the numbers have come back from artists who are currently using the Topspin products. The Byrne/Eno run has gone very well thus far. The project started by offering fans a free track in exchange for their email addresses and then making the album available for free streaming online. The music could not only be streamed on the Byrne/Eno website, but the music player could be easily embedded on any website. In fact, it ended up on the front page of MSNBC.com as a news story. The value of that kind of exposure is staggering. For purchase, the album came in three pricing points: $9 digital download, $13 CD and digital download, and $70 for digital download and boxed set.
Within the first 8 weeks, the amount estimated for a major label advance was already recouped from album sales through Topspin alone. This number was reached on day 50, over a week before the album was made available on iTunes, Amazon, and other digital retailers. The average purchase amount per fan was much higher than the average amount in the industry. With a low cost method like this and a direct channel for royalties, the marginal profit for artists is much better in comparison to the older record company model. The artist is also paid within 60 days of a purchase made by a consumer and keep most of the profits made via Topspin, with the company taking a small percentage.
Joe Purdy is a relatively unknown act that has been able to make a great living for himself as an artist. He has already sold 650,000 singles on iTunes and made more money last year than the CEO of Topspin (as it should be, says Rogers). Joe was able to buy himself a house from the profits of these sales. Joe is among those that Topspin sees as the “middle class” of artists. Such artists are past their time of major commercial success or are new on the scene and do not have the marketing of a major record label. This new model of higher profitability will hopefully create a way for these “middle class” artists to carve out their own niche in the digital marketplace and make a decent living for them.
So in the coming months check, out Topspin’s website at www.topspinmedia.com to see what they are coming out with. If they do successfully create a market for these “under the radar” artists, we could begin to see a revolution for these acts in the way they reach fans and market themselves. A shift from a mass-marketing, low-margin approach to a target-marketed, higher margin approach should be a fresh look for the digital music market.
By Jack Goodall