Berklee today is the official alumni publication of Berklee College of Music in Boston, Massachusetts. It is a forum for contemporary music and musicians.
Issue link: http://berkleetoday.epubxp.com/i/132141
Pledging Allegiance to the Fan If you don't have a deep understanding of the pain or passion of your target customer, you have no busness talking about your solution. —The Lean Entrepreneur Benji Rogers '92 Jayce Varden '92 Panos Panay '94 20 Berklee today Created in 2008, PledgeMusic is a passionate direct-to-fan music business solution by Benji Rogers '92 and Jayce Varden '92, who started a musical partnership at Berklee in 1991. "When the idea for Pledge frst came up, I had it in my head that I would carry on playing music," Rogers says. "I suddenly realized that my actual gift was being able to help artists navigate the fscal and social media worlds and earn money that could sustain their careers. One of the frst people I called was Jayce because he had a business mind-set. I said, 'I have this idea. Do you think it will work?' He said, 'Yes, and I want in!'" PledgeMusic provides artists with the tools to understand and connect with their early-adopter, superfans, bringing them into the experience of creating a full music campaign from preproduction to commercial release. "What fans really want to experience in a world of ondemand access is being a part of the music as it is being made," Rogers says. "The focus is not on the transaction, but the experience, and making sure that the value proposition put in front of the fan is something they will respond to," Varden adds. In a recent study, the Nielsen Company estimated that $.5 to $2.6 billion is left on the table every year in the U.S. music industry because fans are not offered that musical experience. "Fans know where to get the products," Rogers says. "They want the experience. That's what's missing." Artists keep fans in the loop by producing transmedia updates that can be made available to the general public or only to pledgers. Pledgers receive special packages and artist access for their participation in the presale campaign. PledgeMusic campaigns don't end when they reach the 100 percent level. Often they exceed their initial goals. "We estimate that after 60 days of a campaign going live, an artist will make 37 percent of their income," Rogers says. "So why close it and make it just about a funding period?" One of the unique aspects of PledgeMusic is its focus on social marketing. While not a requirement, artists are encouraged to give a percentage of the money they raise to the charity of their choice. "About 98 percent of the artists add a charity," Varden reports. "It's very personal. It's not something we dictate, but something we certainly encourage. It's an amazing thing to be able to pay it forward that way." PledgeMusic is fueled by musicians and their personal attention to artists gives them a strong competitive advantage. The phone is answered by real human beings, and Jayce and Benji give out their business cards at seminars and conferences to ensure that musicians are directed to the people who can help them. Pledge works with major artists and record labels too. "The music industry has always been about risk," Rogers continues. "We do pre-sales—often months before the album is recorded or mixed. You de-risk that investment for someone who wants to come in on the back end and release it. All the data collected by the artist is owned by the artist or the label. We work as hard for an artist starting out as we do for a big artist, because each is important to us as musicians. We'll help you get everything you need done. It's not over until it's funded." "I feel that what we do is meld the best parts of the crowd-funding industry with the best parts of the direct-tofan proposition," Varden says. "Ultimately, that benefts the artist, fan, and charity." Seeing around the Next Curve Founding entrepreneurs are out to make their vision and business real. To succeed, they must abandon the status quo, recruit a team that shares their vision, and strike out together on what appears to be a new path, often shrouded in uncertainty, fear, and doubt. —The Startup Owner's Manual Panos Panay '94 grew up on the island of Cyprus. His passion was guitar, but he had early exposure to social entrepreneurship and business. His mother was instrumental in launching UNICEF in Cyprus, and his uncle was an entrepreneur. "I decided early on that I wanted my own business." Panay says. "I've always approached entrepreneurship as a creative outlet, as a canvas of sorts. If you create something of value, then you're able to share it and experience it with other people. That's the most amazing feeling on the planet." Inspired by a magazine ad for Berklee he'd seen that featured John Scofeld, he decided to head for Boston. At Berklee Panos became fascinated with Don Gorder's brandnew music business program. He changed his major and graduated with Berklee's frst music business students. "I developed lifelong habits, like reading the Wall Street Journal and The Economist," Panay says. "I realized that when you do business, you're not independent of the environment in which you operate. To me, there is really no such thing as 'the music business.' It's business applied to the feld of music, but it's still a business that operates in a broader socioeconomic environment. The Berklee courses piqued my curiosity and have been instrumental in the way I've approached business over the years." As part of his music business program, Panos did an internship at Ted Kurland Associates, an international booking agency. He worked his way to a six-fgure salary booking the artists he grew up admiring: Pat Metheny, Chick Corea, Isaac Hayes, Sonny Rollins, and others. When Panay received press kits from artists that were not big enough box-offce draws to merit attention from the Kurland agency, the seeds for Sonicbids were planted. He saw the potential of the Internet to provide a platform that could serve all artists. In September 2000, he quit his job to work on Sonicbids full time. Over the past 13 years, Sonicbids has become the premier online booking platform for independent musicians and has expanded to include music licensing and brand-marketing services. Just as eBay brings together buyers and sellers, Sonicbids connects musicians, promoters, and brand managers. In January 2013, Sonicbids was acquired by Backstage, an established company offering services to actors similar to what Sonicbids provides to musicians. With a common shared mission of helping those working in the performing arts connect with job opportunities, the deal makes perfect sense. Panay led his company from the startup phase through a major acquisition. "The two most important courses I took at Berklee were not business classes." Panay says. "One was my improvisation class; and the other a conducting class. They put a lead sheet in front of you, and you are supposed to play and improvise around it on the spot! This is very similar to the way business works. There is a misconception that building a business is a superlinear process, but it's a zig-zag process. You need to have a direction and operate within a framework, which is how jazz works, but you need to be able to course-correct as you go. It's like improvising with an ensemble. You have to work with others and learn to be as good a listener as a player. Improvisation classes taught me a lot