Q&A with MusicDealers Co-Founder Jonathan Sheinkop
Jonathan, thanks a ton for taking the time to give our readers a little insight into the music industry, the music licensing business, and learning about your background and some of the inner workings of Music Dealers.
Q) So, you joined Music Dealers after selling your portfolio management company back in 2008. To the outsider that seems to be quite the drastic jump, how did the change in position take place?
A) ”My brother, Eric who’s CEO of Music Dealers and John Williamson the COO, were very assured that there was a huge opportunity if they had the necessary funding to truly disinter-mediate the music licensing business on a scale that would compete with larger, but fractured legacy businesses in the same field. I actually straddled the two worlds for awhile and came to realize you can’t simultaneously work in two separate industries very well, so I went full-time with the company that had the better team. It’s been a huge leap, but each day I understand more and get a little better at it.”
Q) Now correct me if I’m wrong, but Music Dealers Co-Founders comprise of three individuals: Yourself, Eric Sheinkop, and John Williamson. What is the background of how you all came to meet?
A) “Eric, my brother had partnered with John to run a music management business that specialized in aligning brands with strategically selected music acts for fully integrated partnerships. They also managed some pretty hot bands that were signed to significant deals due to their involvement. When they came to me with the business concepts for Music Dealers, they were doing enough things really well, that it was worth pursuing with them. I have never known any other two people who had that level of intuition or raw passion for developing strategies to better the future of the music industry by improving at least one important segment of it.”
Q) Being in the music industry seems like such a grind for an artist, can you give me a brief explanation of exactly what Music Dealers does for their artists and how it works?
A) “Being a professional artist is still all about being a business that has longevity. It requires creativity, collaboration, marketing, sales, socializing, sharing, technology, touring, interviewing, recording, collections and distribution. We help, by building deep relationships with the people and companies who license music regularly and providing a platform that allows artists to always get their music in front of licensors when they are looking to make that critical buying decision. By doing the heavy lifting on this end, we aim to be a great partner for the artist community.”
Q) What is the monetization model for Music Dealers? How do artists make money? (unless you answered that in the previous question)
A) “Plenty of companies are trying to make a buck in artist services, but many have faster to make it from artists, then it is to partner and help artists to accomplish mutually beneficial goals. We are a rare find in the music licensing world, in that we’ve tied our own fortunes to the successful placement of music. We make money when deals close and artists get paid. It’s an even split on the front-end transaction and a split of publishing royalties when earned. In other words, we believe that we’ve built a platform that truly works for everyone on all sides of the transaction and we were willing to bet the farm on it.”
Q) With physical albums sales down and the ability for listeners to hear most of the music they want through technology platforms such as Spotify, turntableFM, Pandora, etc…how are artists managing to stay afloat and what new ways have they found to generate revenue?
A)” There are a lot of artists who have become smarter about using the right technology platforms to create new opportunities and gain a foothold to step above the noise and earn real money. For some, the right tech platform might be free socialization services to help keep fans engaged, which can mean more iTunes sales. For others it might be working with us to earn money as well as build further credibility by getting licensed with a global brand or getting synced into popular TV shows on HBO and Showtime. Taking the total of all of your solo successes, becomes the proof of concept, that you’re a rising trend and that gets the attention of professionals who book live shows or tours, which can get you paid.”
Q) How many artists does Music Dealers currently represent?
A) ”A lot! Maybe 13,000 or 14,000 at the moment. In our system, quality songs will rise to the top and get heard by clients most often. The beauty of our platform is that the artist who has the best acoustic guitar song is going to rise to the top of searches when someone is looking for an acoustic guitar song. So a search can be refined down to 20, 30, 40 or more song choices pretty easily. Our clients may listen to hundreds of choices when they need that perfect track for their project and since all our music is legally cleared and commercial quality, most industry professionals prefer a filter like ours.”
Q) How do you sort through all of the music out there?
A) “We have professionals who are reviewing artist tracks all day, every day. We do not ask anyone to upload their own search criteria into our system, because it just doesn’t work in the long term. To have the most searchable system for selecting and discovering new songs, you have to have consistency in every single search. If we have Dubstep pulling up in searches for Hip Hop, it’s not good, and it won’t scale. Professionals searching to license a band with similar characteristics to one band are not going to be pleased to have to pile through songs that are unrelated, because the search tags were wrong. If you’re a pro, that’s a waste of time. And there’s just no algorithm that is ready to replace the human ear for the hundreds of criteria, we use. It’s possible that our data will fix that some day, but it’s not there yet.”
Q) I have heard a good amount of indie rock being brought into the commercial space. What would you say is the highest purchased (licensed) genre of music?
A)”That’s a good question, because our licensing trends are influenced by multiple factors. We certainly see correlations in clients searching for indie music that compares and ties into popular trending artists on Billboard Charts, but we also are influenced by the type of work we’re doing for specific brands, such as Coca-Cola. Large brands are influenced by a common theme in their sonic branding. For Coke, they want to spread Happiness, so it’s our job to know what that sounds like for each country or even, in a specific location. As well, we do a tremendous amount of instrumental tracks that range from orchestral, international or simply drum and base.”
Q) How has technology played a role into not only what is going on at Music Dealers, but also the industry in general, ie: distribution, recording, production etc…
A) “The main driver in the growth of recorded music is without question, the lower cost of recording equipment. Affordability is a phenomenon that is going to continue to increase the amount of music available. The ability to experiment and test the market’s appetite with new sounds and even new genres will grow. Digital distribution will disperse it more often and more widely. The tasteful consumption of it all is the real challenge. Unfortunately, the trend won’t likely result in better music, so filtering and analysis systems like ours at Music Dealers, are gearing up by innovating new methods to better manage it all, without sacrificing the quality of service.”
Q) What sort of trends have you seen from the Chicago music scene?
A) “There seems to be a trend in the growth of annualized music festivals and customizing those festivals with multiple artist experiences. Maybe it mimics the online experience, where people are willing to either pay a single fee or watch advertising in order to get as much as they can at once, after walking through the gates? It may have started with Woodstock, but it’s definitely a trend now. Plenty of people are consuming music in larger quantities both live and online, which is great because they’re discovering artists they’d never have heard otherwise. I don’t remember the last time I went out to see a single headliner tour, because I’ll probably see them at Lollapalooza and not have to deal with scalper prices.”
Q) How have those trends affected the operations and marketing decisions you have had to make for the business?
A) “We want what our clients want from us, which is to help find the perfect track at the exact moment, they want it. However, sometimes the added assurance we can provide through data, that an artist is growing in popularity, helps the client to feel surer about their licensing decision. As well, a great song can continue to play forever, and a Brand that is tied into that is going to benefit; especially when the band was first discovered through their advertisement spot. We’ve got a number of great examples of this already. More of our artist community touring and growing their fan-bases is very good thing for everyone.”
Q) What’s next as far as technical enhancements for your licensing platform?
A) “Speed, efficiency, and choice are the beginning and end for our client base. Success for us, means helping more artists get paid by more potential licensors. However, we’ve also spent a lot of time trying to better understand our industry and have taken note of pain-points that large businesses take for granted. We’re a problem solving team that has a lot of extremely passionate people who want to work on music solutions. If you envision the biggest pain points in the B2B music industry, we are likely already working on the fix.”
Q) We can’t end the interview before finding out your top five artists?
A) “A recent playlist made for an opportunity has these artists: Howes & Slatter, Bronze Radio Return, Dr. Dexter, Hey Champ and Sleepy Fox.”
Thanks Jonathon, we really appreciate your answers and looking forward to the continued success of Music Dealers!
A BIG thank you to RoboToaster for the interview. Check out the original interview here!