Music Dealers Press: Crain's Business Silicon City Write-Up 697 words · 4 minute read

Silicon City: Chicago Startup Helps Marketers Pick The Right Music

Music Dealers is a Chicago-based company that helps marketers and media companies find music to include in shows and campaigns. What sets Music Dealers apart from its competitors is software. Traditionally, music supervisors rely on a network of label employees, publishers or regional clearinghouses to suggest songs for placement. Music Dealers, in contrast, has added more than 150,000 songs to its online database, allowing supervisors to search for music that fits their needs according to extremely narrow criteria relating to musical style, tempo, mood and instrumentation.

Brothers Eric and Jonathan Sheinkop founded the company with John Williamson in 2008, and in the last two years its business has spiked. After earning just over $700,000 last year, the company expects to earn $3.3 million this year and more than $8 million in 2012. Part of the surge is due to royalty payments from deals completed in previous years, but Music Dealers also is adding business. The 40-employee company placed 600 songs in the first half of 2011 and in July signed a deal with Coca-Cola Co. to provide music for a global campaign in 2013.

The company’s growth doesn’t mean music supervisors are quickly jettisoning their old model of finding new music: Only 10% of 15% of Music Dealers’ placements happen online, with the rest of the sales following the traditional model. The company expects the ratio to approach 50% in the next couple of years.

Music Dealers recently announced it raised more than $4 million from angel investors this year, bringing its total investment to $5.25 million. Eric Sheinkop, the CEO, tells Silicon City more about his business.

Crain’s: What’s the advantage of your platform compared to the traditional music placement model?

Mr. Sheinkop: We provide (artists) with a lot more opportunities than they would get from a traditional company, whether you’re talking about a major label, a publisher or an exclusive (music placement) company. The traditional model is based entirely on relationships knowing the music supervisors for a particular show (or brand), then knowing what they’re looking for at the appropriate time, then getting them to hear your music at a time when it’s the perfect fit.

Likewise, the technology we’ve implemented allows supervisors to search for exactly what they need. Instead of just playing them a couple of songs, we show them a service that they can access 24 hours a day.

Crain’s: How will the Coke deal work?

ES: This is the first time (Coke) has tried a collective, global music initiative. In 2013, its global (marketing focus) is music. In Mexico, for example, they will use a radio-style platform, and (Coke) wants to feature independent artists, but they have no way of finding them. We will help connect them with what they’re looking for in each target market and with each demographic.

If a brand takes one big Lady Gaga song and offers it for free, it’s not that exciting, because anybody in that target demographic already can get that music. By introducing new people to music, we create something that’s more specified, and that creates more engagement with the audience.

Crain’s: Is this a singular kind of deal, or do you expect more brands will build this sort of localized or regionalized campaign?

ES: Localization is a massive trend. We’re also doing (similar projects) now for advertising agencies because they always have this headache where a (particular artist) is right for certain parts of Europe, but not OK for Germany, for example, or then maybe Russia wants its own version. Well, instead of making them start from scratch in each of those instances, we take the same campaign and the same song, but we can bring in a local cool artist and change the instrumentation to make it more authentic and local.

Traditional advertising is not as effective as it once was. Brands need to be more creative and more targeted in their approach, and music is really the way in. Brands really show dedication to their audience by finding something cool and unique and becoming a filter that gives real value (by introducing customers to new music).

By Steve Hendershot– SOURCE