Music Man of the 21st Century
By: Steve Hendershot June 04, 2012
In the old days, discovering the Next Big Song was a stumble-upon process that involved going to concerts and soliciting opinions from mysteriously powerful taste-makers in New York or Los Angeles.
Today? There's an app for that.
The app is the property of Music Dealers LLC, a Chicago company that vets songs from independent artists, then puts them in a database and prepares them for placement in ad campaigns and on television shows. Music Dealers acquires the necessary legal clearances for each tune and adds tags to make the songs searchable according to their genre, mood and lyrics. From there, agencies are limited only by their ability to describe what kind of song they're looking for.
“People who know music love our site because they can search very specifically for what they want,” says CEO Eric Sheinkop, 29. In cases where the ad execs can't be specific—for example, “they'll say, ‘I need something light, fluffy and half-aggressive,' “ Mr. Sheinkop says—Music Dealers will still help by hand-selecting material the old-school way. Gradually, though, the company's users are getting the hang of Music Dealers' software.
Mr. Sheinkop says 25 percent of Music Dealers' placements are handled online, up from 15 percent last year and 5 percent in 2010. Revenue from charging song buyers is rising, too, to $2.3 million in 2011 from $800,000 the year before. In the first quarter, sales topped $1.5 million.
Mr. Sheinkop launched Bandit Productions Inc., a hip-hop label, just before graduating from Lincoln Park High School in 1999 at age 16. He continued to run the label while at the University of Wisconsin at Madison. He returned to Chicago in 2005 and was approached by advertising agency Leo Burnett in search of urban artists in 2007.
Soon he placed an original song in an ad campaign by Oak Brook-based McDonald's Corp. When royalty checks totaling more than $100,000 started rolling in, he thought there had been a mistake. Instead, he and his investment-banker older brother, Jonathan, discovered a business opportunity, and Music Dealers was born in 2009.
Mr. Sheinkop divides his time between Chicago and London, New York and Los Angeles, while co-founder and Chief Operating Officer John Williamson oversees Music Dealers' 50-employee staff, including 35 based at its West Loop headquarters.
Lately, much of his travel has been on behalf of Coca-Cola Co., Music Dealers' anchor client. Mr. Sheinkop met Coke marketing exec Emmanuel Seuge at a party in 2010, boasting that Music Dealers could generate dozens of custom songs in a single weekend. He did it, and the Atlanta-based company featured its selection in a global marketing campaign.
Last year, Coke acquired an undisclosed stake in Music Dealers. The startup also has attracted $4 million in venture capital from angel investors this year.
“Music Dealers is amplifying the exposure for independent talent,” Mr. Seuge says.
(Editor's note: Music Dealers' revenue has been corrected in this updated story.)