The AU Interview - Eric Sheinkop of Music Dealers
Larry recently had the opportunity to speak with Eric Sheinkop, the CEO and co-founder of Music Dealers, the company that hooks up aspiring new artists with non-traditional avenues to success such as advertising deals, placements on television soundtracks and more. They speak about what sparked the idea for Music Dealers, the success stories and more.
Incredibly curious about the point in which the Music Dealers company started for you. From what I’ve read about you, you were working with a lot of other companies and I assume you were doing quite well doing that. So at what point did you decide to set up your own company and why did you go about the business model the way that you did?
So I originally had what I thought was a record label which I started in 1999, which I realised was not going to be the future for anybody. So I transitioned it to a management company and then spent a number of years trying to get opportunities for our artists.
You would’ve been a teenager at this stage?
I was sixteen, but saw the opportunity was either in ‘live’ for the future of music or ‘sync’. And I still didn’t really understand what sync was but because we had a good presence on the ground in Chicago, advertising agencies were asking me to come in and help them with music choices. So I was working for a number of different agencies and brands and placing our artists but it wasn’t until I realised the revenue potential of royalties that decided ‘This is the future, this is serious, this could change somebody’s life.’ So it was either going the live routes or licensing and as a last minute situation, I ended up getting my voice rapping on a McDonalds commercial and the royalty checks that stemmed from that were enough for me to focus and say okay, we’re starting a company that was taking it from my little company of four or six artists to as many artists of quality that we could get into a situation. That’s what helped get it off the ground.
So your involvement with these artists is purely on the sync path at this point, they have other managers for everything else?
Absolutely. The artists with managers who are most active are the ones we try to approach the most, because we specialise in artists that are really going to bring value to whatever media production that they’re put in to. So if they’re put into a television show, it’s not just a good piece of music it’s that these artists are actually touring, they have buzz and they have a social network so they’re able to attract eyeballs to that television show as well.
There are two sides to the transaction here, you’ve got the brand who are trying to find the right song, but then you’ve got the music itself and you got the band. When you talk to bands in their early stages they’re always like “Nup, I’m not going to do this, I’m not going to go out there and sell my music, I’m not going to sell my soul etc”. Is it when they see the cheque that that changes?
So, first of all, we’re never going to take somebody’s music and use it if that’s not the right thing to do, even when we do take them in we give them the choice of saying, “I don’t want to be attached to fast food or to politics” or to anything. They have the choice of where to place their music and where not to have access to their music. But I think there’s been a massive shift where there’s so many bands that have emerged and become popular through television commercials or through advertisements with brands that it’s kind of the cool thing to do now. Ten-years ago it was a sell out, it was the wrong thing to do with your music, but now that’s cool. If you have a brand that’s supporting you or if you have a brand that’s tweeting about you, putting them on their Facebook page that has 50 million following them and they’re exposing you to 50 million fans, that’s an awesome advantage for a band that no record label was ever able to offer them before. So I think brands have really come in, and are able to offer artists a whole new stream of distribution and marketing that record labels could only dream of.
And Coca Cola was one of your first major clients as well?
Yeah, Coca Cola. We had been working for a number of years before we got in with Coke but that was a relationship that quickly took off. They actually invested in our company to help us grow on a scale throughout the world and that just gave us many more large-scale opportunities to place artists. So that’s somebody where they have 50 million Facebook fans, and we’re able to get our artists on their Facebook and they’re getting millions of fans overnight. So that’s a great partner for us. But then there’s Nike or Disney or McDonalds or HTC or other brands that are really able to help our artists, depending on the demographic of the fans.
Have you rapped on any other McDonalds commercials since then?
Unfortunately not, unfortunately I now have a bunch of artists who are better than myself. But I would if I got the chance.
You mentioned the idea of this being the future of the industry in terms of a business model. And it seems like the companies that are doing the best these days are the ones embracing the sync deal. The sync deal and the live side of things that seems to have been keeping the music industry afloat as we work out Spotify, and we work out this and we work out that. Now that we’re starting to work out the digital models a bit better and within five years that’s going to be where pretty much all the money for sales comes from, where do you think the sync market goes from here? How does that evolve?
I think it actually explodes right alongside the record labels getting a little bit more security and more comfortable and growing once again. It’s really great all the digital streaming… it’s never a question of access to music or quantity of music. In fact because of the ease of access to create music digitally and uploading without the need of a record label there’s almost too much music for consumers. So they’re looking to brands to kind of be that guide and be that filter and curate for them. So if a brand is able to really understand what they stand for, who their consumers are and what they stand for and find music that’s going to be appreciated by their consumer then they can curate and be seen as important beyond the product that they’re selling. So that’s actually a model that we developed called social empowerment which is how brands are actually bringing value to their consumers life beyond the product. Through their passion for music is one of the easiest ways to achieve. But the consumers always going to want new music, and cool sounds. So the brands are investing in ‘the music discovery’, which the labels kind of had a drop off a while ago. So it’s actually fuelling the music industry moving forward. There’s a lot of interaction between brands and labels and I think that war will come, because labels kind of took that jump and they’re taking that risk to invest in new talent and then they could upstream it to the majors and deliver it to their fans on a larger scale.
I understand you just co-authored a book about all this. How did that come about? What was that process like?
Ahh it was fun! I do a couple of talks here and there at different conferences such as this one. And there was a publisher in the audience that came and asked me to be a co-author and talk about social empowerment specifically with examples that we’ve seen from major brands. So I kinda covered brands that I thought were nailing it and doing it better than anyone, which is Converse, Coca-Cola, Mountain Dew, Green Label Sounds… There’s a couple of really good examples out there of brands that have kind of figured out the model, figured out how to provide a more tangible or a better experience to their audience along the passion point. It’s been a long process; I mean I feel like an artist who got signed to a record deal. The record is always postponed. The book was meant to be out in April but it’s now coming out in September so looking forward to its release. There’s lots of attention around it already so hopefully the release will bring about even more.
For sure. And looking back at the last few years with music dealers, are there a couple of success stories of a band getting the exposure that they perhaps deserved?
Absolutely, I mean my favourite thing and I think the greatest thing that we do is we really help artists every single day. And we change artists lives sometimes. But sometimes it might be a small placement on CBS or MTV and it’s an emerging artist it’s new and it’s their first kind of toe in the water of the music industry and it’s at least giving them the ability to look back at their parents and their friends and say, “Look, I’m creating art that has value. I’m creating art that’s appreciated”. It encourages them to continue creating. And that’s happening every single day multiple times. But on the next level up, there are brands that are placing artists into major campaigns and blowing them up around the world overnight. And those artists are then going on… my favourite example is an artist from London named Metis. We were talking and he was saying, “I wanna take my music more seriously, I wanna get out there. What’s the best way to do that?”. And we were able to place him in a Coke Zero campaign that went around the world and because of the popularity of the song in the campaign he got signed to Sony in Latin-America, he got signed to Universal in the UK, he got signed to Warner in France and it was a dream come true. So there’re a lot of really great stories. Every Monday that’s what we do as a company. All offices get on Skype together and we play an interview from an artist about how Music Dealers has changed their life.
Reminds you why you do it I guess.
We all need that every now and again. And what’s next for you? What’s on the agenda til the end of the year, other than the book of course?
I think we’re at a very interesting point in Music Dealers history and future where we’ve developed a platform embraced by the ad industry and by brands and by television networks. So the question has always been when is it time to bring in catalogues, music, artists outside of Music Dealers and really create a global platform, a global database that has all the information that creatives at advertising agencies are looking for. So if we’re able to move forward successfully with some of the conversations we’re having with you know, Indie labels and the major labels then I think it could be a very good year, and 2014, for the industry but for us particularly as well.
Fantastic. Well thanks so much for taking the time. It’s fascinating what you do, and how much you’ve got done as well. It’s very impressive so thanks very much.
Thank-you for having me, I appreciate it!