Downtown Records Comes Up With A Business Model That May Be A Little “Crazy”

Jun 11th, 2007 // 11 Comments

crazy.jpgDowntown Records, the home to Gnarls Barkley, Art Brut, and the Cold War Kids, is planning on launching a new label with a slightly different, slightly bloggy business model later this year:

In a move designed to upend the traditional record label business model, Downtown Records and Internet entrepreneur Peter Rojas plan to launch an online-only record label that will offer its music for free and generate revenue only through advertising and sponsorships, The Post has learned.

Dubbed RCRD LBL and targeted for launch this fall, the venture aims to merge free, exclusive music with niche blog content to offer advertisers highly targeted sponsorship opportunities. Or, to put it another way, the label marries Downtown’s ability to identify cutting-edge artists – the label’s roster includes blog-beloved bands like Gnarls Barkley and Cold War Kids – with the architecture of Rojas’ weblogs to create a next-generation online music company.

One source familiar with the project described it as a “curated YouTube or MySpace for music with an editorially driven filter.”

While this new venture hasn’t actually signed any artists yet, that hasn’t stopped investors from being optimistic:

According to a preliminary business outline obtained by The Post, the venture offers advertisers three different levels of sponsorship packages that feature a combination of contest, podcast and “single of the week” sponsorships as well as advertising plug-ins that run over the course of several months.

Sources said the idea seems to have a lot of traction judging by initial conversations with Madison Avenue.

While these sources declined to provide revenue projections for the venture, they did say that they were “confident that the Web site will generate significant revenue early on.”

While we agree that labels have to look beyond the idea of record sales being the prime source of revenue, we have to say that the label’s prospects for success aren’t certain–after all, they’ll still depend on which artists the label signs, a list that is currently empty. Yes, Downtown has a great track record as far as spotting buzzy bands that get a lot of online attention, and the music’s low cost will certainly help as far as stoking initial awareness–but the assumption that audiences will be as enthusiastic about these bands as advertisers are is a big jump, blogs or no blogs, and it’s reflective of the “we will tell you what you’ll like” attitude that’s helped larger record labels get into the mess they’re in right now.

USING ADS, NEW ONLINE LABEL OFFERS MUSIC FREE [NYP]

[Disclosure: Rojas is the Chief Strategy Officer for Weblogs, Inc., a competitor of Idolator's parent company, Gawker Media.]

  1. RepentTokyo

    good – this is the future of music – giving away tracks and making money through alternate revenue streams.

  2. JasonBob7

    I think this is a really interesting concept, and I’m keen on seeing how it pans out.

    Your complaint about the “we’ll tell you what you’ll like” attitude has a flip-side — the old-school model of record-label-as-quality-filter. Back in “the day” (i.e. the 50s – 60s), labels had a role as tastemakers, cherry-picking the best music and developing the best artists. Downtown has a growing reputation for picking good, interesting bands. I like the idea of the label as “curator” of their roster much more than a label as a “hit machine”.

    If fans trust the label, they’ll stay loyal to it (especially if it gives out good music for free). Meanwhile, the advertisers get closely-targeted customer access and Downtown gets a consistent revenue source. Sounds like a win-win-win situation.

  3. MC

    plan to launch an online-only record label that will offer its music for free and generate revenue only through advertising and sponsorships

    I liked this idea better the first time, when it was called the New Monkees.

  4. RepentTokyo

    @JasonBob7: “Your complaint about the “we’ll tell you what you’ll like” attitude has a flip-side — the old-school model of record-label-as-quality-filter. Back in “the day” (i.e. the 50s – 60s), labels had a role as tastemakers, cherry-picking the best music and developing the best artists.”

    Not only that, but independent labels act as scene filters and this is a perfect mouthpiece for them.

  5. Catbirdseat

    Props to the guy, though, for trying something, ANYTHING, different.

    [Disclosure: If Denton needs to poop out a service to compete toe-to-toe with this, I will sign on to mastermind it. I have ideas, and diagrams, and stuff.]

  6. Maura Johnston

    @JasonBob7: A fair point, and I am also interested in seeing how it pans out. But as someone who, during the first dot-com bubble, worked at a company that had a launch party for a site before it was even in beta and left said company before the site ever launched–oh wait, it never did!–I reserve the right to be skeptical of any projected claims about what’s pretty much vaporware at this point.

  7. Anonymous

    perhaps being a child of the 80s and an adolescent of the 90s has me irrevocably locked into “skeptic” mode, but i don’t see this working well.

    what’s the quantifying measure for success/failure? downloads? # of products that the song is advertising sold?

    i think my major beef with this is that, once again, music is being relegated to the status of a second-class citizen here. the art isn’t being consumed on its own merits, but as a tool to do THIS, THAT or THE OTHER…

    all i want is good fucking music on its own terms. why is too much to ask?

  8. JasonBob7

    @hypnotyza: That’s too much to ask because music can no longer be SOLD on its own terms. The realities of business require first and foremost that money be made in order for artists and labels to survive, and they can’t rely on revenue from selling discrete units of their “product” anymore. Therefore, the music itself is automatically relegated to second-class status (or at least tied for first).

  9. RepentTokyo

    why does the “class status” of music have to be tied to the manner in which it is sold or distributed? If you truly want “good fucking music” then why should it matter to you if you buy it on a cd or download it from a site with ads?

  10. d_mosurock

    Finally, someplace for the Petty Crime discography to surface! Better ask Layla, though.

  11. Catbirdseat

    Remember how you would ask your parents for a new bike, and they’d tell you to go get a job and buy your own bike? Know why they did that? So you’d appreciate the bike. I don’t think people will ever really give much of a shit about something that’s ubiquitous and totally free.

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