ListenUp.fm is a listener rewards system for streaming music fans. ListenUp targets fans that have identified themselves as highly engaged based on their listening, sharing, and spending habits. According to their website, ListenUp’s goal is to help artists sell more merchandise and concert tickets by converting more streaming listeners into fans that go to shows. Artists can also run promotions — including concert ticket give-aways, merchandise bundles, and exclusive experiences — to help them stay connected with their fans!
By Jerry Dawson
Mykas Degesys — CEO
Ben Fruin — CMO
So first up, you guys are from the Nashville, Tennessee area. How does coming from a major city for the music industry play a role in ListenUp’s story, if at all?
Ben: We both met at business school here in Nashville. We started this about a year ago, after having taken a class called “Business Models in Music,” which covers the transition from digital and physical ownership of music and the shift towards the access model. We spent about four months meeting with people in the music industry — record labels, artists, performers’ rights organizations —learning how to solve some of the challenges that various groups were facing. That was extremely beneficial and it only could have happened with us being based in Nashville. If we were in New York or Los Angeles, not only would it have been more difficult with everything being more spread out, but there’s a tight-knit culture here that those places don’t have. Everything is basically confined to one street, and everyone knows everyone and is willing to introduce themselves. That’s really what springboarded ListenUp.
Mykas, you spoke about the shift from ownership to access at Spark Nashville a few months back. Why is that shift occurring, and what might be the next shift?
Mykas: It’s tough to say what will happen in the short term future. But it seems like music is resistant to change. And we’ve noticed the shift from ownership to access in different mediums: we see it with Netflix and Hulu, or even YouTube when it comes to video, we’ve seen it with documents with Google Drive or Dropbox. What people care about is having access to what they want when they want it. And they actually prefer not to own it, because owning stuff is cumbersome when its phsyical, and it takes up space on your hard drive or phone when its digital. When you can access it, when you can get it when you want it, that fulfills the basic need. In the last couple years, music has caught up to where other industries have been. Rdio has been around longer than Spotifiy, but Spotify really timed it right and got to the States when fans were starting to switch to this model of music. In the next five years, you’ll see more fans jumping to this model and more people comfortable paying for it.
It seems like you guys are promoting ListenUp in a two-fold way: both for fans and artists. Who do you see getting the most out of ListenUp.fm: fans, artists, management, record labels?
Ben: I think its the artists who will get the most out of it. The fans get something out of it from an efficiency standpoint. Rather than having to track bands across multiple platforms, what we do is compile your listening data across various platforms. I use Soundcloud, Spotify and Youtube, and just keeping track of what I’m listening to has become a difficult process. And it’s tough to have a record of that and be able to say, “At this point in time, this was what I’m listening to.” A fan, similar to if they go to Songkick, will get promoted concerts, but these concerts will be promoted based on their listening activity. Additionally, fans will be able to earn different rewards from artists for being loyal. You see a lot of different promotions from artists like, “Fans can send 200 tweets and win a prize,” but in terms of putting money in the artist’s pocket, every stream puts a half a cent in the artist’s pocket, every share might produce some sort of different dollar amounts for the artist if the fan who has the band shared with them ends up buying concert tickets or buying an album. We’re trying to quantify how much a fan is worth to an artist in each of those three areas.
So that’s how it becomes useful to an artist. Not only are artists not getting all of this data from Soundcloud or Spotify, but any data they do get is all aggregate. So I think that’s going to become more critical over time. You’re starting to see with Facebook that it’s “not cool” anymore and you’re seeing people shift towards Instagram or Twitter. Some of these other platforms make it difficult for artists to reach their fans. And its going to become more critical for artists to reach their fans directly through the music, almost as it was in the 90s. Its just going to be consumed in a different way.
I think also that providing the artist with critical information, showing, “How many listens does it take before someone buys a concert ticket? Or how long does it take for a fan to check if this artist is on tour?” For the first time, with these different APIs, we’ll be able to draw some meaningful conclusions. So sort of micro-level data analysis.
Since you mention this “micro-level data,” it seems that ListenUp is a great tool for a new artist. How is a new artist going to use this data? How might it affect their creative process and business decision?
Mykas: Good question. For new artists, you qualify as an artist by putting music on Rdio or Spotify, the streaming services that we look into. At that point, they can log onto our dashboard and see basic things about their fan base. Fan demographics, age, gender, location, other music that the fan base is listening to. This will help an artist figure out, for example, which parts of the country they can target for a tour. So, a smaller artist that has local/regional support that wants to support touring at the next level needs to tour smartly and efficiently. They don’t want to go driving all over the country and playing shows that are only 50% sold out. What we can identify is, where are your fans located. With the other data that we show we can figure out who the artist should partner with on tour. If we know that one band has a lot of similarities to another artist to the point where they can go on tour together, or where one artist is opening for the other, we can provide the data that shows the value to both parties.
That leaves a good situation for fans as well. A new artist has fewer fans, and fans are “in on the ground level” so to speak. Any plans on using that new artist/new fan relationship for a social aspect to ListenUp?
Ben: You see about 70 different Spotify apps right now, and you see about 60 of those apps focusing on discovery. Apps showing who people in my interest group are listening to. That’s all well and good, but the actual music discovery side of things is becoming very crowded. You’re going to see four or five of these players emerge, like you see with We Are Hunted. It’s not necessarily a social app. It’s integrated into Twitter, and its social in the sense that its generating info based on what bands are buzzing across the Internet. But what we’re focusing on is tracking you as an individual. It’s social in the way that you can compare yourself to other fans in terms of how much you listen and your general level of interest in a band. We don’t want to build a chat room; we’ll leave that up to some of the other apps.
Mykas: There’s a lot of saturation in discovery services. As a fan you can go to a number of services that have spent way more money refining their algorithms, figuring out how to create a playlist or recommend new artists or shows. What we’re focusing on is recommending shows we know you’d enjoy. We want to help artists get more fans to more concerts. If we recommend you go to a show for an artists you haven’t’ heard, you’re not likely to go. Most people don’t go to shows to hear artists they’ve never heard before. If we focus on what we know you like, and provide other values around that, you may come to our site and discover something about the artists biography, or a concert date that you didn’t know about before, but we helped you learn. All these apps and services are really good at music discovery; we’re focused on all the things outside of the music that we can help fans discover.
Ben: The average casual music fan probably doesn’t care all that much about music discovery. I was following a discussion on Twitter about the relevance of music discovery and the consensus is that music discovery only caters to a small percentage of fans — people that go to SXSW, the people that are on the forefront of what’s happening. Thats ultimately only a small percentage of iTunes, Pandora, Rdio and Sptofiy users. It’ll be interesting to see how this discovery stuff pans out.
How do you plan to promote ListenUp? Through artists? By promoting the product itself? Or both?
Ben: It’ll be a combination of a few things. As a startup, it’s something that begins at the local level with getting ourselves at shows and setting up shop and telling people about the benefit of our services and building relationships with the local venues, which we’ve started doing. From there it’s reliant on artists to go out and tell fans, “ You can win a signed album if you participate in this promotion.” It’s a fine line between artists feeling like they’re soliciting their fan base and the artist maintaining that sense of authenticity. It’s really tough to say, “Hey go download ListenUp and you can win this specific item.” It’s a challenge to get particularly indie bands who don’t want to be considered a “sell out” for promoting this service, so there’s been a little bit of aversion there, but thats one of our core strategies. It’s really just about proving that it’s really a more efficient way for fans to track their favorite bands. In the end its gonna save fans a lot of time and energy. Right now I check four or five sites to track ten or fifteen artists, while I can do that all with one quick visit to ListenUp.
It’s just about structuring it in such a way that both parties are aware that there’s nothing at risk, we’re not asking the band for anything much more than running a promotion at our site, which would replace a normal radio promotion. In the end you’re giving away the same tickets that you would have given to a radio station, but you’re getting back all of this valuable data in return while still providing that same reward. It actually goes to a fan instead of a random caller on the radio.
What are the biggest challenges facing ListenUp.fm as it grows?
Mykas: Being a music tech app is the biggest hurdle right there. When you look at all sorts of startups, music is one of the hardest industries to raise money in, to get traction it, to get new users in. Traction is another big challenge. You have to make the product simple to understand, it has to have a viral component to it where it spreads without you having to put too much into marketing. That’s where we see ourselves spending the most time, really simplifying ListenUp, making it easy to use and easy to share.
Ben: I would say another major challenge is the overall level of fragmentation in the industry. Across merchandise companies and ticket brokers, its very difficult because its not something that’s scaled particularly well. The top 100 acts are spreads across 52 different merchandise vendors. In order for us to gain traction with those artists and sell their merch and tickets, we have to go to each of those individual brokers. It’s not an easy process, especially knowing that each band gets hit with a few different innovative solutions to help them grow each week.
What’s up ahead for ListenUp?
Mykas: We’ve launched our beta two months ago. We’ve been refining it and getting ready for a full launch where we can actively go out and get new users. Initially it’s been us reaching out to friends, but we’re getting closer to the point where we can begin to push it a lot harder. Our goals for the next few months are to flesh out any problems, make sure the user experience is tight and good, and go out and acquire new users. That’s our number one priority.
Other applications like Groovebug and Songkick are also providing a “customer service”-type experience. Why do you think this model is growing?
Mykas: You want to make things as easy as you can for the fan. With technology, people are becoming lazy. If you can’t have something within a click or two away, then it becomes a challenge, and fans see the value in other products that are not yours. If a fan can listen to music and buy a t-shirt or a concert ticket, and you can create multiple points of value within one platform, then it increases the time your average customer will spend with your product. It’s a model that has existed in physical stores, and now its moving to the web and being duplicated.
Ben: It’s also a genre specific thing. Different genres are more receptive of technology. EDM is the leader in that area: virtually every artist/manager that I approach is at least willing to have the conservation about how we can help them sell more tickets. Thats vital in that area because generally 80-90 percent of their revenue is based on ticket sales. Whereas something in country is a tougher sell because most fans are using iTunes or listening to the radio. As we work towards unifying the music industry, it’s important to build a platform where everyone can find something useful.
Most music fans aren’t loyal to just one genre, but there are many apps out there that are aggregators or communities for just one type of music. We want to be a hub that music fans go to regardless of genre. I think that’s an important thing that a lot of sites overlook.
What do you wish I would’ve asked you? Talk about whatever is important about ListenUp that I missed.
Ben: In terms of explaining the value to the fan, its going to mean something different to each fan. Whether its finding out new info about your favorite band, or being able to track your listening history. What we’ve tried to do is combine these different aspects that are currently hosted on different unique channels, and bring them all into one place. So artists can update Twitter and have a fan see it. They can update tour dates and have fans see it. They can run a promotion and provide exposure to it. To each person they’re gonna find something unique on their platform that keeps them interested.