Category Archives: Management

My Friday Post Went Viral. Here’s Why.

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Last Friday, I wrote a post that felt more like a personal update than anything else.

It went viral anyway, and I know why. 👇

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Quick Message — I’m Here to Help

☝️ First, let me say: I know the crunch that’s happening all over the country (and the world), which is why I’m cutting my rates and making them as flexible as possible. I do personal branding, relationship-building, content editing, and networking consulting.

I teach people how to get in front of anyone; tech investors, company CEOs, journalists or media, etc., and I do it by teaching basic tactics that anyone could use (patience, value creation, consistency, etc.). If you need help—growing your network, developing your brand & reputation, building relationships for a new job—then reach out to me. I will work with your budget —just send me a message on Twitter or LinkedIn.

What We Expect of Our Companies

When we apply for jobs at companies, we expect that the contracts they give us are mutually beneficial at their core. For our part, these contracts require us to show up on time, excel in our skills & dedication, produce results, etc. And for that we get paid. It often boils down to a base concept:

“You give me time and skills, and I’ll give you money and benefits.” 💰

But sometimes in our readiness to accept these terms and get paid, we can overlook the things which we should be expecting & requiring from the companies hiring us.

And one of the core things that every employee should expect of their employer is a safe workplace. This isn’t innovative thinking; it’s a necessary cost which every employer should figure into their overhead.

Here’s the problem with that:

Safety isn’t sexy and profit rules the day.

Many people like to think that their company has their back; that the organization will catch them when they fall. And indeed this is true of many companies, but unfortunately not all.

And I think this is exactly why my post went viral. 🤔

Companies in Two Camps

With all the coronavirus stuff happening globally, there’s a lot of fear about how to weather the storm. Many companies have taken it upon themselves to step out on the limb with their employees and help as best as they can. Some of my favorites like Slack, Airbnb, Zoom, PagerDuty, and Box are cutting costs to their premium products so that the sudden influx of people now forced to work from home can continue to be as productive as possible. Many companies recognize that they may see a financial loss in the coming weeks, but they accept that this is bigger than that.

They’re placing their employees’ safety above their fiscal bottom lines. 🙌

And then there are companies which are not.

Even with social distancing requirements going into effect all over the world, there are companies that don’t seem to be taking the situation seriously. Hobby Lobby has adamantly refused to close locations and GameStop declared the same.

These are the poster children for companies which are sticking to the gray areas of what is defined as an “essential business” apparently so that they don’t have to close up shop or move online. And this is going to jeopardize the health of their workers. 😷

When this is all over and the dust settles, there will only be two camps of companies:

  1. 📈 Those who placed the health of their employees over the fiscal bottom line, and
  2. 📉 Those who placed the fiscal bottom line over health and everything else

(For the record, the companies I’m referring to en masse are not the typical essential businesses; i.e. police, medical personnel, grocers, firefighters, etc.)

Why My Post Went Viral (I Believe)

My post went viral (perhaps a poor adjective given our current situation…) because I have been documenting the struggle that one of my close friends is having with some such company. My friend works for a company that is doing its damn best to stay in one of these gray areas; they are not “essential” on the same level as a homeless shelter or police department, nor are they 100% remote as software engineering might be.

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My original post from Tuesday, 3/24/20.

What I do know, though, is that the work my friend does—operations, bookkeeping, customer support—could all be done remotely. Certainly in an extenuating circumstance like the one in which we now find ourselves, 98% (if not more) of my friend’s work could be done from their laptop at home.

Yet the company refuses to allow them to do so.

The optics are even worse: the partners and employees who work in corporate are already working from home and have been for a week. 😡

My post went viral—I believe—because this kind of management of employees is not only reckless and irresponsible, it’s dismaying and unconscionable. People have a right to work in safe conditions, and a right to request leniency in extenuating circumstances like this. They have a right not to fear retaliation for desiring to work from home in the middle of a pandemic.

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My viral follow-up post from Friday, 3/27/20.

This Isn’t Leadership — It’s Extortion

I’ve run startup companies before and I’ve worked for bigger organizations, and here’s a rule I never break: I would never ask my employee or team member to do something I wouldn’t be willing to do myself.

Like, say, risk my life for a good quarterly profit.

The irony is that these companies who are putting profit before safety will see cataclysmic retribution when this is all over. Not from me or even from governments most likely, but from their employees, customers, investors, and advertisers. Nobody wants to work for, buy from, or promote a company which places profits over employee health and safety. Investor Mark Cuban mentioned as much just last week.

My post went viral because people are angry at my friend’s circumstance (and probably those of their close ones as well) and know that this is not right. This is not what my friend signed up for, and certainly not what the company should be expecting of them.

Leaders lead from the front, and what this company is doing now isn’t leadership—it’s extortion. 🚨

The Upshot When This Is Over

For those of you out there running companies the right way and doing your very best to hear your employees and put their health first, thank you. I applaud you. I will patronize your businesses and continue to lead with you in the right direction.

But for those who are not following suit—who view any desire for leniency & safety as insubordination and are living in the gray areas intentionally for profit—, you do so at your own risk. The optics are not on your side, and any profit you manage to make during this tough time will undoubtedly be used on public relations damage control.

And for the hardworking employees out there: you deserve to work in a safe environment. If you know that your company truly doesn’t fall under “essential business,” also know that your health and safety are paramount. This isn’t a normal corporate situation; this is an extreme that we’re living in right now and people need to adapt to that.

I’m truly grateful for all of your support. Keep moving forward. 🚀

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Follow me on Twitter and LinkedIn @adammarx13 and continue to 😎 #LookForTheOrangeSunglasses.

P.S. — Leads on new jobs for my friend still greatly appreciated. To my knowledge, skills include: asset management, operations, bookkeeping, customer service, company relations, & extensive real estate experience.

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Unrolling the Unroll.me Conundrum

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TL;DR: The Unroll.me scenario highlights the need for more discussion on legal and TOS

Blowup

A couple weeks ago, NYT journalist Mike Isaac wrote a piece on Uber CEO Travis Kalanick that inadvertently gave legs to another story: Unroll.me. I’m not going to restate the facts of the backlash—you can go to multiple sources to read those. I will, however, point out something that I think was missing from the overall conversation, which I think is important for the tech community to assess as much as anything else about the story.

The exact implications of the backlash notwithstanding, it brings up two main points, both of which are connected, and one of which I’ve only seen any real discussion. In short, here’s why Unroll.me CEO Jojo Hedaya’s apology doesn’t solve the underlying problem:

  1. It placed all of the culpability on the Unroll.me team, and
  2. It presented “lack of TOS transparency” as the main problem, while the bigger problem as I see it is a lack of discussion and knowledge of TOS in general.

The first was a misstep because it painted Unroll.me as the villain in the narrative. It’s true: Unroll.me could have been much more transparent about their TOS practices, as plenty of people have already pointed out. In particular, Hunter Walk and Steve Sinofsky presented valid points on this in our tweet conversation. As Hunter pointed out, the company’s suggestion that users simply “Read the TOS” was at best insufficient and at worst callous. Steve also tweeted that trying to write an explanatory text of a contract (TOS) in plain English may well not hold up the same legally. Both are correct. But I also see something deeper.

The Precarious Balance

However, the full, unequivocal admission of guilt left Unroll.me holding the whole bag, while only a portion of any perceivable guilt actually lay with them. The cold reality of the entire situation is that the Terms of Service are there for a reason, and that reason isn’t just to take up space or peeve users when downloading a new app. It’s to protect and indemnify the company against any possible legal action; to assert that the company is in the right, and that some responsibility has to rest with the user.

Is the company always right? No. Is it always clear of indiscretions? Of course not (just look at Uber). But the point is that the TOS exists for a reason. And contrary to what many users might want to believe, that reason is not to please them or give them warm feelings inside. It’s to make sure that the company is legally protected.

But what about transparency? Is that not equally important?

The answer, more and more, is “yes,” it is important. But it’s also important that users don’t conflate transparency—of TOS, for example—with a lack of responsibility on their part.

Legal knowledge shouldn’t be seen as a dark art, and—companies’ TOS should be sufficiently clear so users understand and accept the terms outlined therein. It needn’t be a good/bad scenario—just one where all parties are clearly informed. In the context, the legal concept of “good faith” applies almost without question.

The Real Point

All of this leads up to the real point which should be central to everyone’s perspective: that the tech press and blogosphere should cover legal matters, especially those related to TOS, far more than they already do. I read countless articles and posts, and listen to numerous podcasts on fundraising, user-acquisition and retention, hiring, firing, going public, etc. But for all of that, I see only a handful of posts or podcasts where legal knowledge is discussed with as much vigor and depth as new funding rounds are. Sure, those posts and podcasts exist, but they don’t get tweeted nearly as much in the tech mainstream as others on the aforementioned topics.

Why? Well, frankly, because legal stuff is perceived as boring. It’s not “move fast and break stuff”—it’s “move slowly, and make sure you read every word.” That’s not fun, but it is necessary. The larger lesson one should take away from the Unroll.me incident is that founders, VC’s, accelerators, and tech journalists should all turn around and discuss the Terms of Service as much as any other metrics. After all it’s the legal footing upon which the financial relationship between companies and customers ultimately rests. Well-done TOS should be emphasized just as much as raising a Series C round. After all, many companies won’t even get to Series C, but they for damn sure won’t get to Series A without a rock solid TOS.

Firsthand Experience

I learned this firsthand when I was starting my first company, a music-tech startup. What’s the first thing anyone thinks about when they hear “music company?” Getting sued. And I knew that.

So I read every TOS and license I could relating to music—I read Spotify’s, Apple’s, YouTube’s, SoundCloud’s, and even Rdio’s before they went under. I read every single word, and took notes on where each license and TOS assumed too much responsibility—some of which was unrealistic. And then I made sure that our own license and Terms of Service didn’t invite unwanted legal exposure—I wrote it that way. I knew everything in our TOS, and could run it over, forwards and backwards, in my sleep, to artists, founders, VC’s, or anyone else who asked.    

Of course not every person is equipped for feels prepared to write their own TOS. I did, but then again, I can’t code, so we all have our strengths and weaknesses. However, because I spent so much time researching, reading, and refining our license and TOS, I was intimately familiar with everything it said. You don’t need to be a lawyer to prioritize knowing your TOS. This is a massive advantage.

You Should Know Your TOS Forward and Backward, Inside and Out

Knowing what your company does and doesn’t do—what you’re allowed to do as written in your TOS—is an advantage because it’s something you can then share with your users. This gives you power. When you are well-versed in the legal aspects of your company as well as the financial or technical ones, you are able to paint a full picture for your customers and control the narrative that is told. It’s not about being deceptive—I would never advocate for that.

But people feel a whole lot less deceived when they’re able to have a real conversation about what they’re signing. Fear and doubt tend to dissipate when questions are welcomed, and people feel respected as customers and users.

This is what the takeaway should be, and where we focus future discussions. Yes, Unroll.me made some mistakes, and companies should try to learn from them and be open and honest with their TOS and other licensing agreements before anything questionable comes out. But we as an industry should similarly prioritize legal knowledge and versatility the way we do engineering prowess and marketing brilliance. In the end, it’s all required to make and run an amazing company.

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Thanks to Jason Rowley, Nick Abouzeid, Alex Marshall, and Eric Willis for reading drafts of this.

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Find me on Twitter @adammarx13 and let’s talk music, tech, and business!

What Artists Can Learn from Startups, Part 2

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Who Do You Promote?

Recently, I wrote a post entitled, “What Artists Can Learn from Startups” in which I began looking at a number of strategies which startup companies (mainly tech) use to generate leads and interest in their products and services.

The more I think about it, the more certain strategies really stick out as things that artists should be considering and implementing. One in particular is something which holds my attention.

In tech (startups, at least), there isn’t the same reticence to publicize and promote someone else’s product or service as there seems to be in music. Among artists, there seems to be this gospel-like belief that if you promote an artist or song you don’t love with all your soul, then you’re somehow being disingenuous. In all forms of art, and music especially, the concept of reputation is taken extremely seriously. Sometimes to a fault.

Whereas I see founders from all over the startup world promoting one another, I see more resignation in the music community to follow suit, and truthfully for no good reason.

I have no qualms about promoting a product or service that I don’t use, or don’t use regularly. Before you come down on me for having a hidden agenda, though, take a moment to think about all the things you can promote someone for that have little to nothing to do with their service or product.

So often, I find myself tweeting and posting about the people behind the product, either because they’re so magnetic, so innovative in their thought process, or so willing to help others. It has so much more to do with their character than anything else. And this is something artists could so easily cash in on and make their own.

When someone helps you set up a show, helps promote your band or music online, or introduces you to someone new, tweeting out a “thank you” and promoting them isn’t being disingenuous at all. Quiet the opposite. It actually solidifies you as someone who returns favors and good karma, and thus builds your own reputation, even if it’s in the service of others (for the moment).

Positive service of others is service to ourselves, if only indirectly. Artists would do well to begin to reexamine their practices in how they promote others, from the decision process to the execution. Starting to have more fluid strategies here could greatly expand their networks in relatively short amounts of time.

More to come on this soon.

Takeaways from AngelList Radio’s Podcast with Tyler Willis and Jason Calacanis

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Yesterday I listened to Tyler Willis have Jason Calacanis on the AngelList Radio podcast. Despite the fact that the episode was recorded a couple of months ago, I couldn’t stop listening to it. In fact, I was about halfway through it the second time when it occurred to me that I should take a few notes on it to summarize the incredible amount of information that Tyler and Jason discussed (it is an hour and a half long, after all).

Jason Calacanis; image courtesy of the AngelList Radio podcast

Jason Calacanis; image courtesy of the AngelList Radio podcast

The sheer amount of important information covered makes summarizing all of it challenging, but I’ll give it a try. I should note, though, before delving in, that some of the most poignant things covered were in the form of life stories and philosophies from Jason, a summarized transcription of which does not do them justice. To really soak up the underlying meaning of what’s listed below, you really need to listen to it for yourself. Possibly multiple times.

Moving along though. The points which Tyler and Jason hit can most aptly be placed within a number of areas of thought and consideration.  

These are:

  • People
  • Mentalities
  • Entrepreneurs and Founders
  • (Angel) Investing
  • Democratization

I’ll do my best to tackle each one of these, but keep in mind that these are just a few of the points which struck me as the most powerful. I will discuss some in more depth than others, as a number of them are self-explanatory.

People

Jason’s view of people in my mind basically splits into three main veins: human calculation, relationships, and arguably the most important one, empathy.

Human Calculation

This goes to “Jason’s Law of Angel Investing,” which according to Jason is: “I don’t need to know if the idea’s going to win, I [just] need to know if the person’s a winner.”

Jason looks for and reads the things that other people might miss: body language, personality, and interactive cues. As he mentions, he will talk about the [founder’s] idea through the lens of trying to figure out if [s/he’s] a winner or not. This sort of human calculation sets Jason up for the long game, something which he discusses as being a part of his overall strategy.

Relationships

Jason is extremely bullish on his relationships, wanting to be the first call a founder makes when things are going wrong, when the situation looks dire, or just when founders are having a hard time. He discusses understanding that being a founder is lonely, and sometimes all one needs is an ear to vent to; someone to “shoot the shit” with. Perhaps this goes back to Jason’s major in psychology; certainly his ability to read people and situations benefits from such a thought process. 

Life is relationships, pure and simple. Everything else is secondary, and Jason aspires to (almost obsessively) cultivate his relationships. (That’s a good thing, by the way).

This however, leads into what I consider to be one of the central theses of the discussion: empathy.

Empathy

Startups are hard. Actually, that’s a lie; startups are fucking hard. And sometimes the best thing is when someone will just sit and listen while you vent and fume for a little while. Loneliness kills, and having a friendly ear can make all the difference on those tough nights.

One quote seems to capture what Jason’s mentality would be during those nights on the phone with a founder having a hard time: “When I invested in you, I knew the odds were against you, and I still believed in you.” That pretty much sums up all that needs to be said.

Jason’s philosophy of accomplishing close relationships simply by being a nice human being—“buying [the founder] a cup of coffee, buying them dinner, or just saying ‘I believe in you’”—is exactly how I see the world as well. Cultivating relationships means doing what you can for other people because you can do it, not because you see some reward at the end of the tunnel. In the long run, good relationships do tend to reward people in often unexpected ways, but that should never be the crux of the relationships. Relationships are empathy and positivity. It’s about being magnetic.

Mentalities

Within the context of mentalities, Jason hits on a number of notions, though the one that sticks out to me the most is his focus on the “journalistic mentality.” Clearly a holdover from his time as a journalist, Jason discusses how he looks for people who exhibit great journalistic skills: an inquisitive mind, good communication skills, and being able to read situations well. In many ways, this connects with a lot of his poker metaphors. (There are lots of poker metaphors).

As he points out: “What happens when you interview [people] for a long time is you start to understand when they’re full of shit and you start to tell…who’s full of greatness…” Bluntly put, this is very true. I experienced it a lot during my time as a music journalist, speaking with artists and other industry professionals. Being a journalist is one of the best ways you can get to know the industry you want to be in.

“[A journalist] equals an inquisitive person who can communicate well.”

Entrepreneurs and Founders

Jason spends a lot of time talking about how he identifies great founders and what anyone should be doing and/or thinking about if they want to be an entrepreneur.

Know “Why”

First and foremost, know “why.” Why are you doing this, what is the underlying reason?

For Jason, answers like “the market seems open” or “I wanted to try being a founder” don’t cut it. It speaks to the authenticity if a founder is doing it for a larger reason than just trying to take advantage of a particular market situation. There needs to be a certain inevitability to what they’re doing, and how they see the world (something which Chris Sacca has also touched on).

As Jason sees it, there needs to be a real sense of purpose in the founder(s), a mission: “The world needs to evolve in this way, and we have the solution, and we NEED to implement our solution to change the way the world works.”

Jason: “Really talented people tell you where the world is going, and then you get to be part of it. And then you get to help them launch the rocket.”

Don’t Screw Your Supporters

They need to have the integrity not to screw the people who supported them early on. This is exactly in line with a well-known adage in the music industry which I always quote: “For those who forget us on the way up, we’ll see you on the way down.” Don’t forget the people who made your rise possible.

Be a Punk

Founders need to be punks.

Ok so Jason didn’t actually use this word, but as I explained in my post here, that’s really the type of mentality he is describing when he articulates what he looks for in people.

Additionally founders need:

  • To have an armor; a relentless drive, and be relentlessly resourceful
  • Have maniacal execution skills
  • Unstoppable determination

(Angel) Investing

Jason relayed a lot of information about investing and investment strategy. He discussed a lot of his personal strategy as well as how new investors can get in the game and start to learn the ropes.

For the sake of time (and because a lot of this is fairly self-explanatory), here’s a rundown of what he discussed:

  • Tips (for Angel Investing)
    • Spread your bets
    • Start by making investments slowly over a year
    • Even if you lose money, you’ll learn something
    • Always try to learn before diving in head first
    • Join syndicates
    • Get in the game and start
    • Double and triple down on your best bets
    • Meet with founders as much as you possibly can
    • Play the cars of the best investor at the table if you’re new to investing
    • Do the work, be proactive
    • Play the long game
    • Be patient and learn
    • Financial performance will come; focus on a portfolio strategy
    • Investing is a fight/struggle
    • Don’t ever discount anybody
    • Make a 5-year plan
    • Pro-rata rights
    • You want the “difficult” people; these people “mix it up”
    • Focus on being the most valuable and helpful person to the founder
  • Need to Have
    • A comfort losing a lot of your money (which you invested)
    • A comfort with the “shitshow” realities of investing
  • Don’t Be an Investor If
    • You’re annoying
    • You’re a control freak/obsessive person
    • You can’t remain cool and calm
    • You can’t remain classy in the face of defeat
    • You can’t deal with bad news
    • You can’t be a mensch

As Jason articulated: “I have to be the most valuable [person] to the founders. [I ask myself,] ‘Am I doing the most for that person?’”

How did Jason get to this thought process? When he started investing he made a list of all the things he could do for founders to provide value to them. Then he did them.

Democratization

The last major point which Jason discusses is democratization. In this case, he’s referring to the democratization of knowledge and power, and how dynamics have totally shifted in the last 10 years, allowing for entrance into entrepreneurship for tons of people who previously had very little recourse.

Interestingly enough, as he’s discussing the democratization of knowledge which can be used for growth, development of new skills sets, and other such things, I’m just reminded of an article I wrote a few months ago on the democratization of music. True, Jason is describing a different type of democratization process, but the parallel works. In the same way that scarcity has become an obsolete mentality for music, so too has scarcity of startup and entrepreneurial knowledge become obsolete in the worlds of business and tech.

I said it once and I’ll say it again: scarcity is obsolete; democratization wins.

“[Entrepreneurship is] stumbling around in the dark room, fumbling around, until your hand hits the wall, and flicks on the light switch.” – Jason 

Jason also briefly touched on the differences he sees between his LAUNCH incubator and Y Combinator, but that’s a whole other discussion for another time.

All in all, the podcast was intriguing enough for me to listen to it twice all the way through, and then take notes on it for a post. I give it up to Tyler Willis for conducting a great interview, and look forward to a hopeful follow-up with Jason again.

If you enjoyed this, follow me on Twitter, where I talk tech, music, and funny junk 😀

Or, ya know, on that new Snapchat thing 🙂

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Why Product Hunt’s Sophomore Effort Could Be Its Greatest Triumph

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In an insightful post yesterday, David Berkowitz postulated that Product Hunt might be suffering from startup fatigue as 2015 draws to a close. His presented graphs and statistics are all on point, and the analysis of said metrics is fairly fleshed out, and I’d say quite accurate.

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However, though I agree with Berkowitz on a number of points, I stand apart in questioning whether Product Hunt has fallen victim to ennui and achieved the “Mad Men” effect. While the metrics point to a decrease in overall activity (which you can see in Berkowitz’s original post), I’m not so sure that the postulation of trouble for Product Hunt is exactly right. Let me tell you why.

The Debut Album

Product Hunt debuted halfway through 2014, and I came to it late in that summer, somewhere between July and August. I had just enough time to familiarize myself with the site (and app) before the windfall from the 6+ million a16z-led A round really enabled them to start expanding rapidly on their product and offerings. This summer alone PH has released 3 betas (that I’m aware of), Games, Books, and Podcasts, along with its LIVE feature (which I quite enjoy). I’ve heard murmurs that some people think PH is throwing anything at a wall and seeing what sticks, rather than focusing on one specific vision. Not only is this a fairly correct observation, but it’s exactly the right thing for Product Hunt to do.

As I discussed in this twitter thread, I think that from ~June 2014 till now (~October 2015), we’ve seen Product Hunt’s first act; its debut album as it were. That’s the album that is either overlooked except by the core fans (Nirvana’s 1989 album, Bleach) or gets all the attention (Pearl Jam’s 1991 debut, Ten).

The data implies that Product Hunt is of the latter, and that the coming months will most likely continue to be somewhat challenging for the company. The fact that PH might well be a necessary utility for some (as Berkowitz now identified it as for himself) as opposed to a quirky, fun new thing is arguably irrelevant. The fanaticism that Product Hunt enjoyed over the last year may not last in its current form, but it does signal something greater, I think.

The Sophomore Effort

Continuing the music analogy, Product Hunt now finds itself in the studio after its debut success. The tour’s been completed, and as such, self-avowed PH fans wait for the next release, many hoping to see a redo of the initial popular effort. But PH has outgrown its debut skin, and is looking for something to keep its creative juices fresh. What the metrics really tell us is that PH is going through growing pains, trying to figure out just how many new instruments and styles it wants to try on its new album. Product Hunt’s sophomore effort will do two things: 1) it will likely alienate a demographic of general users who “like the old stuff, but not the new vibe,” and 2) solidify those of us who want to see PH keep growing and cultivating its community.

I discussed Product Hunt’s winning in community earlier this summer, and since then have only furthered my beliefs in such. This signifies one of the main distinctions that I think will come to play out over Product Hunt’s ecosystem: certain users will use it mainly as a necessary utility, while others aren’t exactly sure what to use it as, but are drawn to the intriguing dynamic nonetheless. To be clear, there’s nothing wrong with being either kind of user; different strokes for different folks. But to be equally as clear, Product Hunt continues to succeed brilliantly because it attracts people like me; people who were not (are not) self-avowed die-hard tech product enthusiasts, but find it enticing anyway. I was never as much into new tech products and beta testing until I started using Product Hunt, and that’s exactly why it wins: it turns outsiders into insiders.

Some have begun to criticize PH for its commenting invites, and the exclusivity factor which they arguably perpetuate. But I think the minor exclusivity factor actually distracts from a much bigger inclusive factor. Product Hunt has succeeded in building the backbone of a community that is magnetic; it’s engaged, positive, and exciting for people who are open to new things.

Points of Discussion

In all this, Berkowitz makes a number of statements which I agree with, but analyze differently.

  1. Upvotes may not be the best measure of activity: This may in fact be true, but I’m not sure it matters as much as one might think. I see Product Hunt’s upvotes as proof of concept; people did want to see new products and share their impressions of them. But the upvote (and downvote, additionally) is a fairly one-dimensional interaction, and one I can see becoming less important to Product Hunt in the grand scheme. I don’t necessarily think they’ll get rid of it, but now that the PH team has planted the seeds of a truly interested and engaging community, those seeds are now germinating, and thus simple upvote metrics might not even be enough to truly capture the meaning behind those interactions.
  2. There could be a long tail effect: The prospect that lesser known products are doing better is possibly the best thing that could happen to PH in my opinion. What we could be seeing is the beginning of a democratization in the PH community, one where you don’t necessarily have to know someone influential to get your product some real traction. If I were part of the PH team, I would try to capitalize on this and figure out how to focus this dynamic; keep pushing the democratization without losing the high standard of quality.
  3. Perhaps Product Hunt is too slow in letting new people participate: I can see the validity of this point, and can see how it plays right into the “Product Hunt is about exclusivity” argument. There’s no quick and easy fix here, and I don’t think there should be. PH needs to retain its values and vision, even if that means it remains partially closed to prospective new users for a time.

    Notice, however, that I said partially closed; my best thought would be to let new users trickle in by giving them some access, a little at a time. Give them perhaps 5 comments every month until they gain full access. This could hopefully encourage them to use their comments wisely, and thus dissuade them from posting drivel or offensive material, while simultaneously allowing PH team members the necessary control to guide these new users.   
  4. Product Hunt is expanding into new categories such as games, books, and podcasts: This I don’t think is a problem at all; I think it’s an opportunity. Not every sub-category will be gold, but that doesn’t make it lead either. I quite like Books, and use it way more than Games (I’m not much a gamer). And though I’ve never been huge into podcasts, the new channel is making me rethink that. People will get different things from different channels, and there will be no way to see what’s really a success until a few more months pass.

    I do, however, think that PH has enough new things to keep its hands full (especially with the addition of the LIVE channel as well), and think it should focus on the irons it already has in the fire rather than continuing to add new ones.        

Berkowitz’s focus on the overall trends present in the graphs, though, is just one part of the story I think. Metrics are necessary things, but they can sometimes distract from possibilities on the horizon otherwise overshadowed by more dour trends. I think that’s the case here, where PH’s recent trends forecast a much more problematic stance than is actually there.

Cultivate the Community, Ignore the Noise

In the coming months, I can see Product Hunt becoming one of the popular contemporary examples of a company that arguably lost its “special sauce” after a great first year and successful Series A round. I anticipate articles to follow on TechCrunch, Re/Code, and to pop up all over Medium, as PH gets picked apart over its somewhat plateauing (if not declining) metrics. However, I caution against counting out PH too soon, and not focusing thoroughly on where they have situated themselves over the past year. Observers would do well to remember that PH is much more than metrics and trends; in fact, it’s mostly more than that. It’s community.

Keep throwing things at the wall, and experimenting with new instruments on the next album, and see what works. PH has already succeeded because their core fanbase is coalescing. Now they just need to nurture that base. Cultivate the community that any band or startup would kill for; that’s where the real power rests. When you leverage the power of your fanbase, the trends can go any way you want them to. All the rest is just noise. 

As for the Product Hunt team, my best advice to them were I to be asked would be to keep their heads down and just work. Acknowledge that this is the sophomore effort, and thus may irritate some of its debut supporters. However, this is the nature of the sophomore album, and could signal Product Hunt’s move towards the release of something even bigger than before. Whereas 2014-15 was Bleach, 2016 could be Nevermind. 

YouTube Plays Out of Key

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Originally published on Marx Rand on June 11, 2015.

Since being embarrassed after some of the more litigious contracts it makes with independent artists using its platform were made public recently, YouTube is in damage-control mode. The media platform provider has  understandably taken a lot of heat as a result. Right now especially the video streaming service, which was purchased by Google nearly a decade ago for $1.65 billion, is in the process of trying to make nice with the artist community as it braces itself for the onslaught of Apple’s new music service release, Apple Music.

YouTube Has Music, But Isn’t About Music

It’s easy to see why YouTube is concerned about Apple Music. After all, the very same (music) community that in significant measure helped YouTube top $1 billion in revenue last year is just as likely, if not more so, to gravitate towards Apple’s serving of the pie as it is to hang out lapping up mainstream internet TV dinners.

For artists– and especially independent artists – YouTube could be quite a useful tool. At least, what the service is capable of offering should be something that sets YouTube apart from its competitors in the music arena, certainly.

But YouTube is still going to struggle to win in the artist arena for one reason: while YouTube has music, it isn’t about music. For YouTube, despite its cool analytics and humongous user base, is still not a music-centered service. This matters because, at the end of the day, artists are a focus, but not the focus.

With the online music landscape heating up, the services that are able to pay more attention to artists as a principle priority will be able to carve out a significant niche for themselves. In the face of such competition, no one else stands a chance. It’s that simple.

The Percentage Points

A big part of YouTube’s problem when it comes to appealing to independent artists is that it’s a victim of its own success. At the end of the day, YouTube has an overwhelming user-base of consumers (and not just of music, but of all sorts of media) that it needs to keep on satisfying – at last count, there were 23 million subscribers to all the various channels on the service. And that’s only the regular users.

Naturally, it makes sense for YouTube to see that its existing customers are well-catered for, but the reality is that such an approach falls far short of what’s acceptable when it comes to satisfying independent music makers and promoters. They can increasingly afford to be much more selective about what they desire and require from the digital distribution channels that they work with.

To compound YouTube’s difficulties with attracting the independents, YouTube still has in place the same tenuous clauses in the contract that upset the artists just recently. The fact that there are a large portion of artists who are currently unaware of this fact only makes the problem worse over the long run too, for the risk that another public embarrassment for YouTube looms large over the shiny brand image that parent Google has cultivated over the years.

There’s a more fundamental problem than any of this, however, and that’s the following: unlike the teenage makeup artists and tween clothing models that have made gazillions from leading their fans to new cosmetics brands eager to pay top dollar for all the eyeballs, the realistic revenue generated from YouTube for music artists is pretty much zilch when you do the math.

Information Is Beautiful, an analytics service based in the United Kingdom, recently published a breakdown of online revenues obtained by artists across a series of music platforms, namely Bandcamp, CDBaby, iTunes, Spotify, Deezer, and—you guessed it—YouTube. The analytics provider concluded that the percentage of independents able to eek out a minimum wage living on YouTube revenue streams was just 0.07%. Here are the screenshots of the YouTube portion:

Image courtesy of InformationIsBeautiful.com; with edits

Image courtesy of InformationIsBeautiful.com; with edits

Here are the pathetic revenue stream earnings for the signed major label artists:

Image courtesy of InformationIsBeautiful.com; with edits

Image courtesy of InformationIsBeautiful.com; with edits

And now, the revenue stream earnings for the independent artists:

Image courtesy of InformationIsBeautiful.com; with edits

Image courtesy of InformationIsBeautiful.com; with edits

That’s amazing – it’s a seventh of a basis point! In other words, it’s even lower than the cheapest commission charged on an online stock trading platform.

And remember, this is not 0.07% of all one billion dollars of YouTube users, or even 0.07% of all 20-something million YouTube subscribers we are talking about here; it is 0.07% of just all the unsigned artists who receive revenue from YouTube streams! It’s likely you can count that number on the fingers of your left hand while clicking over to the next song with your right.

The Discovery Dynamic

The overriding concern here is that the audience consuming the music of these independent artists is incredibly small. But before you leap to your feet and splutter out the old argument that this is because the music created by independents artists simply “isn’t good enough” or “needs to be curated,” step back and think about the fact that these independents are trying to compete on a platform which is essentially not constructed for them.

Though the dynamic of discovery is big on YouTube, it’s not specified to discovery of new independent artists at all (though it’s great for makeup and clothing brands, which adopts an entirely different sort of discovery process through media). As a result, artists end up competing with an amalgamation of other media – most of which is not music-related – and the poor comparative result they are left with ultimately diminishes any chance that there might have been left over of being properly appreciated or even recognized.

All of this adds up to one very simple reality: inasmuch as YouTube is trying to repair its relationships with artists (and independents among them), it is, at the end of the day, very far from being the be-all, end-all for independent artists that the platform is for other genres of media and entertainment. The fact that less than a tenth of a basis point of artists can eek out a minimum wage using the damn thing – while many other professionals in different walks of life make a lot more than that from five minutes of video stream – attests to this fact.

Thus, for all the potential scale and analytical sophistication that YouTube’s platform offers artists, it is still an ecosystem that is fundamentally unsuitable for them and for displaying what they create. And many of them know it now, too.

Independent Music Is Still  Wild West

The independent music market is very much a wild west, and the introduction of a new tool or a new feature isn’t going to win anyone over. To do that, you need to win the trust and confidence of the independent artists, the way Etsy did with hand-crafters, or even the way that Amazon has managed to do with its dominant share of literary readers and authors alike.

This process is not one in which you can achieve ubiquity by striking a deal with a major corporation which fundamentally only offers enhanced distribution such as a major record label. It’s one in which you need to go straight to the product source – in this case, the artists and their fans – and persuade each of them that what you are providing is somewhere they can interact on a creative level and where the music uncompromisingly always comes first. It should not and cannot be a place where their product looks and feels like an afterthought in the ravenous race to profitability.

The upshot – and the sad irony – of all this is that it’s yet another example of a situation in which one of the very same companies that is so adept at spinning creative mainstream entertainment out into the marketplace proves hopeless in creating a fresh and appealing approach to the rising independent music scene.

As Queen so eloquently put it, “another one gone, and another one gone … and another one bites the dust.”

Spotify’s Sony Contract: What It Means for Everyone

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With the leak of Spotify’s contract with Sony last week, there’s a lot of attention on the streaming service right now. I’ll be taking a closer look at that contract over the next week, but for now I’ll focus on the fallout over the last week. In particular there seems to be a lot of renewed interest on the music space, more so than I’ve seen in a while. I think, though, that this has to do with a lot more than simply one contract between two companies; for the first time perhaps, the general public (including music producers, artists, and general music listeners) is aware of the kind of deals being struck behind the scenes.

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Even as Spotify soars in newer valuations that have the company somewhere in the $8B range, yesterday’s leak shows that such a valuation may in fact be misleading—Spotify has to cough up around $43M just for licensing from Sony alone. How much do you think they need to cough up for the other two majors, Warner and Universal? Even if we snip off the extra $3-4M, and assume an upfront licensing fee of $40M from Sony—and then simply assume similar prices for Warner and Universal—then Spotify has already spent $120M of investor money. And that’s just for the privilege of having access to the major labels’ stable of artists.

Also, don’t forget that’s before royalties and any other metrics that Spotify has to hit. Therefore it’s more like $43M upfront for the privilege to pay more later on; it’s not a one-and-done purchase. And most unfortunate for Spotify, this latter number is also predicated on how an artist performs in popularity, something they have essentially no control over.

I’m not going to rewrite Micah Singleton‘s article, but I will draw on a number of points he highlighted and what they mean in reality. There are numerous points of importance, but these are the ones I think the general public really needs to be apprised of. Though the contract has since been removed, we got the basic gist:

  1. Written by Sony—First let’s just take a moment to note that the contract was written by Sony. Of course this is their prerogative, but when considering the fact that Sony holds the rights to much of the content that Spotify wants to license, it clearly illustrates who is subject to whom. Frankly, since Sony holds the content rights, they (and the other major labels) essentially hold Spotify’s lifeblood in their hands—that’s not an opinion, it’s a fact. Realistically Spotify is not built around an independent and free model, so they need to play ball with Sony and the other labels, or they won’t play at all. Period.Screen Shot 2015-05-21 at 8.01.23 AM
  2. Advances—Spotify paid Sony $42.5M just for the right to license the music. That’s an upfront fee just to get in the door. This means that anyone looking to compete head to head with Spotify or Rdio needs to magically have about $130M lying around or in funding before they even get their feet wet (projecting the combined upfront licensing fees of the Big Three major labels). One of the reasons that Spotify has to raise such massive funding rounds is because these advances are somewhat annual, and thus need to be renegotiated all the time. And as the major labels continue to get squeezed in their wallets, these numbers are only going to rise for services looking to use major label content.
  3. Screen Shot 2015-05-21 at 2.36.33 PMDivided How and Among Whom?—As Singleton points out, Sony can essentially do whatever they want with that money; there’s no stipulation that it has to be divided in any particular way, or that any of it has to go to artists or songwriters. According to multiple sources, that money usually stays with the label and is generally not shared with artists. This particular point has raised such criticism that its prompted both a response from the EU, which is now looking into Spotify’s contracts, and virtually obliged Sony to come out with a public statement on the matter. Screen Shot 2015-05-21 at 2.36.56 PM
  4. Most Favored Nation Clause—Essentially a clause that guarantees that Spotify’s balls remain in Sony’s vicegrip. The clause guarantees Sony the right to amend  any portion of the contract if it perceives that any other label has a better deal than it does. This means that Sony is essentially never bound to Spotify in any way; it can decide—based on its own perception—that another label has a better deal (which it may or may not) and rework the entire deal for its own benefit. And Spotify has to swallow everything.
    Screen Shot 2015-05-21 at 2.41.24 PMScreen Shot 2015-05-21 at 2.42.20 PMWhere this really kills Spotify is when used in conjunction with the clause dictating payment based on market share. Thus, if another label has a better deal in that regard—perhaps double what Sony is getting monetarily—then Spotify has to cough up and pay Sony the difference.
  5. Spotify’s 15%—Basically exactly what it sounds like. Spotify takes 15% of the revenues from third-party advertising right off the top. What they do with this money is unknown, though it’s quite plausible that they’re not redistributing it to the artists, and are probably giving third-party advertisers a raw-ish deal. Next time Spotify releases a statement saying that they don’t have the funds to pay the artists more money, let’s all remember this little financial tidbit.Screen Shot 2015-05-21 at 2.47.16 PM Screen Shot 2015-05-21 at 2.48.28 PM
  6. Sony’s Ad Spots—This one’s pretty easy to understand: essentially Spotify is obligated to give Sony a certain amount of free ad space on its service. The ad space—which is clearly worth a fair amount of money—is given to Sony at a massive discount.Screen Shot 2015-05-21 at 2.53.33 PMScreen Shot 2015-05-21 at 2.54.09 PMBut that’s not all; Sony retains the right to sell the credited ad space to whomever they want, whenever they want. Again, Spotify gets squeezed.Screen Shot 2015-05-21 at 2.54.41 PM
  7. User Metrics—Spotify essentially has goals it needs to hit in terms of its user metrics (on both payment tiers), and if it misses those, it could be penalized. Conversely, if it exceeds expectations in either of the tier metrics, it recalculates that number so that Sony gets paid more. In English, what this means is that the better Spotify does, the more money Sony is entitled to, but doesn’t necessarily mean that it all works out for the streaming service.Screen Shot 2015-05-21 at 3.07.40 PM Screen Shot 2015-05-21 at 3.07.51 PMIt’s important to remember that Sony isn’t in the business of making sure that it backs up Spotify. It—like the other major labels—is licensing its music to numerous services, so its only real loyalty is to its bottom line. How that affects Spotify is essentially irrelevant to the major label.
  8. The Royalty Distribution (Forget About the Artists)—Without going too deeply into it (Singleton’s initial analysis and infographics are worth consulting), it basically boils down to this: the royalties per stream are so miniscule that you need to be getting millions of streams in order to make any real money (and by real, I mean anything more than $10.00). We all know that independent artists are never going to get to that level trying to compete on an unfair playing field, so let’s just put that point to bed right now. One thing that is worth noting now, though, is that not even every artist has a contract entitling them to royalties. So for all the bluster about royalty payments, many of the artists signed to major labels aren’t even entitled to fair cuts from the streaming.Screen Shot 2015-05-28 at 6.33.02 PMBut even more so, the way in which streaming royalties are calculated is so incredibly convoluted you almost need a degree in economics just to understand it. That’s not how it should be. For independent artists—and even mainstream artists who simply want to understand the financial dynamics—this is yet another way of keeping them in the dark. No one in any other industry would accept some sort of voodoo economics principle when it came to calculating their earnings, so why should music artists—mainstream or independent—have to settle for that? That’s the point, they shouldn’t.

There are numerous other points worth discussing, but these are some of the major ones that discussions of the music industry revolve around. Though arguably a major embarrassment for Sony and Spotify, the leaking of the contract between the two really shines a bright light on what goes on behind the scenes. It clarifies that what happens behind the curtain affects every type of artist, and underscores why more transparency and reform is needed in the music industry. And it highlights something else: the music industry is not dead and foregone. We’re now right on the precipice of a whole new type of music industry that’s taking shape every day. Those who accept and embrace the new dynamics will be the ones who benefit most from them when they inevitably come.

 

Thanks to Shelley Marx for reading early drafts of this.

Tidal Is Losing More Lifeboats by the Day

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Yesterday, TechCrunch ran a piece from Kelli Richards postulating the viability of Tidal as a service, and its likely outcome in the streaming wars. The article was essentially an overview of what’s been going on with Tidal lately, with Richards doing a good job of zeroing in on a couple of things I’ve discussed and underscored in my own mind as the real deal-breakers.

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Before getting into the two main things of her article, I think it’s important to note a very short—but important—sentence in Richards’ piece: “…the prospects of Tidal upending Spotify in the near future are slim…” This falls right in line with something that I wrote earlier concerning SoundCloud, namely that trying to out-Spotify Spotify is a losing battle and a very poor battle-plan. Going head-to-head with Spotify and playing their game their way (that is, general popular music streaming) is such a poor decision because it means you’re starting way behind the starting line. And in Tidal’s case, this goes double for any sort of exclusive content which might be your main attraction.

Now, Richards’ two main points, and my takeaway from each:

1. Premium/Exclusive Content—Firstly, I’ll be the one to say it: “exclusive content” as one’s main gameplay is a very tough sell. It’s a tough sell because it’s a drastically diminished niche of a larger market, which is basically popular music. That means you’re trying to play on two different levels with two completely different mindsets.

The “exclusive content” play is difficult because it requires your customer base to desire those exclusives almost as much as (or more than) the original content. This isn’t anywhere near the same thing as looking at an independent market, since those content producers are increasingly giving away their material for free (including “exclusives” like remixes, acoustic sets, etc.), and making money elsewhere. For a service like Tidal though, they need to first out-Spotify Spotify to gain the market share of the original popular music demographic, then they need to persuade those people to convert to “exclusive” consumers and pay a whole lot more for something they could just as easily get on YouTube if they wait a couple weeks or a month. This is one of the major flaws in Tidal’s plan in my eyes.

Also under the first point is a small comment included by Richards made by Tidal’s CEO Peter Tonstad, which basically asserts that the industry is moving away from the freemium model, and that “it’s going to be the content richness” which listeners begin to look and pay for. This is bold, but false.

First, the sorts of audiences which Tidal is looking to court—general consumers of popular music—are not about to leave the freemium paradigm anytime soon. Secondly—and funnily enough in my opinion—the rabid, content-rich focus which Tonstad identifies as Tidal’s silver bullet doesn’t really apply to popular consumer audiences on a general level anyway. Ask anyone listening to Spotify if they’d pay double (or anything) for higher quality which they can’t even discern anyway, and I’d be surprised if large numbers converted over. Ironically enough, the rabid thought process which Tonstad is alluding to is alive and well—in the independent music industry—where free plays a much bigger part than it clearly does with Tidal.

2. Celebrity Backers—This point made by Richards is a lot easy to wrap one’s head around; people simply don’t feel so bad when Jay-Z and Kanye West start lecturing about needing more money because, well, they’re rich. And not like “we perceive them as rich but they’re really not;” they actually are rich. Being lectured about money from people like that, then, is not only not welcomed, but it’s really irritating. There’s really no way you can look at that celebrity-backed list of Tidal promoters and take them seriously.

Even more so, though, it really alienates artists who are not rich—you know, like everyone else. For the singer-songwriter playing in dingy clubs, or the band on the road and sleeping in their van, Jay-Z might as well be speaking an alien language. Their thought process is almost indignant (and why shouldn’t it be?); they’re thinking “dude, you have all this money and influence, why the hell do you need any more?” And frankly, if I was still an artist, I’d be thinking the exact same thing. Celebrity-backed things like this are rarely ever a good idea, especially when it alienates others within the same industry.

Richards notes that Tidal has someone who Spotify doesn’t—Taylor Swift—but as I explained here months ago, here’s why Taylor Swift is on the same level as Jay-Z in terms of “not getting it.” She’s so engrossed in the major label paradigm and its trappings that she doesn’t see what life is like for normal artists anymore. And, just like Jay-Z, her disparaging remarks about artists “devaluing their music” strikes a sour and indignant chord in a lot of musicians who think she takes her good fortune for granted.

But if one needs any more convincing of why it’s going to be a very tough road ahead for Tidal, you can read about:

  1. Jay-Z’s hissy-fit onstage
  2. Their firing of their previous CEO, Andy Chen
  3. Criticism from producer Steve Albini
  4. Criticism from other mainstream artists
  5. Their highly criticized and misleading relaunch

The storm isn’t about to end anytime soon, and it seems the lifeboats have left the ship.

SoundCloud’s Failed Highwire Balancing Act: The Sony-SoundCloud Breakup

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Trying (and Failing) to Balance Two Completely Different Paradigms

The SoundCloud-Sony Breakup

The Sony-SoundCloud Breakup

It’s been a tough week for Sony between its leaked contract with Spotify and criticism over its moves with SoundCloud. And yet, inasmuch as the former is embarrassing and will certainly come back to bite the two companies, the latter is arguably more problematic because it’s not simply between Sony and SoundCloud; it’s between Sony, SoundCloud and the independent artists and fans. That last little caveat is something that Sony can afford to ignore—but it’s going to become an increasingly difficult reality for SoundCloud.

SoundCloud, now a platform for major labels and advertisers

SoundCloud, now a platform for major labels and advertisers

News broke over the last couple of weeks that Sony has started pulling their artists’ music from SoundCloud—regardless of what the artists want. To Sony, SoundCloud isn’t a viable option since it doesn’t presently have a strong monetization plan (as if services like Spotify and Rdio do), and until the label and streaming service can come to terms, it seems that any and all Sony-controlled material will be stripped from SoundCloud.

This has put SoundCloud in quite a precarious position. On the one hand, it doesn’t want to alienate its initial die-hard independent fanbase, but on the other it’s been actively seeking out a deal with Sony, as well as with the other two major labels, Warner and Universal (already having one in place with Warner). SoundCloud is trying to balance two completely different bases and paradigms that are moving in opposite directions: 1) the major label paradigm which is still predicated on an obsolete business model, and 2) the independent paradigm which is increasingly embracing “free” as a big part of the future.

What the major label industry really looks like; The Big Three

What the major label industry really looks like; The Big Three

What I Said a Month Ago

On April 9th, SoundCloud signed a deal with Zefr—that same day, I wrote a post on why independents should very soon kiss SoundCloud goodbye; why the Zefr deal was essentially irrelevant for them. It seems I wasn’t the only one who’d identified SoundCloud’s prospective problems, as a day later on April 10th, PandoDaily writer David Holmes came to the same conclusion and published a piece with a similar premise. Holmes’ post validated many of my points, and cleverly brought up a few others, all to conclude, as I had, that the Zefr deal was a band-aid for a bullet wound. And now the bullet wounds are really beginning to gush blood.

This week, electronic artist Madeon released a heavily critical statement regarding he Sony-SoundCloud breakup, noting: “Thank you SoundCloud for being such a great discovery platform over the past five years. Well done Sony for holding your own artists hostage.”

Ouch. Snap. Burn.

Clearly Madeon (along with droves of other EDM artists who’ve gained significant followings on SoundCloud) isn’t pleased with Sony’s “money first” thought process and strategy. And while Sony has the legal right to pull music which it holds the rights to, in the grand scheme, it’s not exactly a play which will endear it either to the fans it seeks, or the artists it works with. Actually, it has the complete opposite effect.

Who’s the First Priority?

But what lies beneath the surface of this very public breakup is not simply an issue for Sony, but a major issue for SoundCloud. People expect Sony to act like a major label—because that’s what it is. But increasingly, SoundCloud has been chasing the major label content which it thinks could help it become more competitive with Spotify, Rdio and Apple. In the process, it’s spitting in the faces of the people who loved SoundCloud for what it was before: free discovery.

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Excerpt from my original April 9th article

And as SoundCloud moves closer to the major label paradigm, it becomes increasingly irrelevant for independent artists, regardless of genre. Independents are where SoundCloud cut its teeth, so now, moving away from the free-model will leave them somewhat toothless. Case in point: SoundCloud’s new NMPA deal, which, again, is irrelevant for independent artists.

The thing about the independents is that, unlike major label artists who are tied to the major label business model, they’re not tied to anybody. Their loyalty can and will be to whoever gives them the best service as a first priority, not an afterthought. This means the best service for the independents, not the best they can do after the major labels have had their fill. SoundCloud is trying to perform a balancing act on a razor-thin highwire and it’s 600lbs overweight. It’s trying to straddle two completely different business paradigms, and managing to piss everyone off in the process.

Free Is Here to Stay—Live With It

The free paradigm which the labels are beginning to get fed up with isn’t going away—something which Peter Kafka seized on in his article on Spotify. Free is a way of life now, and as independent artists continue to explore the benefits that free affords them, they will increasingly detach themselves from the obligations of the major label paradigm. Services like SoundCloud will eventually have to choose a side—something that’s going to be exceedingly difficult for SoundCloud now that they already have a deal with Warner and are chasing deals with the other two major labels.

Screen Shot 2015-05-23 at 3.56.48 PM

Excerpt from my original April 9th article

It seems that they’ve already made their choice, and it won’t be too long before droves of independents notice. They don’t have to and won’t settle for being second-tier priorities, and will look for alternative options. In the meantime, Sony and SoundCloud will duke it out until the former signs the latter to a major label-style contract.

I said it before and I’ll say it again: if you’re an independent, kiss SoundCloud goodbye.