UPDATED: The economic meltdown has slowed venture funding, but it hasn't stopped it entirely. Discount flat fee digital distributor TuneCore has received $7 million in first round financing from Opus Capital which it says will be used to improve artist service as well as to market the service more widely.
Hypebot readers are familiar with the TuneCore. Former indie label owner Jeff Price has created a simple yet brilliantly seductive business model that sent shivers down the spines of labels and distributors. For about $40 you can put an album on all the major download stores without long term contracts. You retain the rights. You do the marketing. “We take out the filters and let everybody in," is how Price describes it.
Opus Capital's Gill Cogan told VentureBeat that he'd "screened a lot of music internet companies but didn’t find any that could do what TuneCore does." Well, Opus and VentureBeat should both hire new research departements. The flat fee distribtuion model has already been adopted by several companies. The largest, ReverbNation, offers a similar and sometimes cheaper flat fee service to 250,000 artist members. And ReverbNation offers an integrated suite of free viral promotional tools that TuneCore would do well to spend its $7 million copying. - Bruce Houghton (click below for press release)
DIGITAL MUSIC DISTRIBUTOR TUNECORE SECURES $7 MILLION FUNDING FROM OPUS CAPITAL
Capital Will Be Used to Strengthen and Solidify Company's Market Leadership and Expand Artist Services; Follows Announcement with iLike to Support Independent Musicians
New York, October 27, 2008 -- TuneCore, the rule-changing music, film and video digital distribution company, has secured $7 million in funding from Opus Capital, a leading early-stage venture capital firm in Menlo Park, CA. TuneCore's paradigm-changing universal access to distribution via an up-front fee unleashed and monetized the market force of tens of millions of music creators, film producers and artists. Gill Cogan, general partner of Opus Capital, has joined the TuneCore board of directors with Guitar Center CEO Marty Albertson and TuneCore CEO Jeff Price.
"The Internet has opened worlds of opportunity for artists to distribute their music directly to their audiences. TuneCore is helping lead this revolution, providing universal access to digital distribution for the first time in history," said Cogan.
Since its launch, TuneCore has become the leader in the music distribution space. TuneCore has acquired tens of thousands of customer accounts and albums and distributed millions of songs to iTunes and other key digital stores such as Amazonmp3, eMusic, Napster, Rhapsody, and others. Customers include Grammy winners, record labels and unsigned artists: Jay-Z, Keith Richards, Public Enemy, Nine Inch Nails, Ricky Skaggs, Paul Westerberg, MGM Studios, Warren G, Bjork, Moby, High School Musical cast members, Ali Lohan, Cirque Du Soleil, Starbucks, Joan Jett, Rockstar Games, David Byrne, MGMT, and tens of thousands more. TuneCore currently distributes between 150 and 250 releases a day (more music is released in one day via TuneCore than by any major record label in a year) and recently expanded its offerings to distribute full-length films, TV shows, live concerts, and documentaries to iTunes and more. TuneCore's own Billboard Top 25 seller chart went live in July 2008.
"Opus' understanding of the space, its track record of investing in early-stage companies, and its philosophy that great management and staff are the key ingredients for success made this a perfect fit," said Price. "Add this to the deep and specific experience of Gill and the Opus team and I could not have asked for a better investor."
The investment from Opus Capital will be used to strengthen TuneCore's market leadership, increase brand awareness, enhance its products and services as well as introduce a wide array of new offerings. In fact, TuneCore is launching its own streaming media player within the next 30 days.
The company also recently announced a strategic initiative with iLike, the leading social music discovery service to help independent musicians promote and sell their music. With more than 30 million registered users, iLike helps people share music recommendations, playlists, and personalized concert alerts.
TuneCore continues to benefit from its strategic partnership with Guitar Center Corporation, which previously made a strategic investment in the company. Guitar Center, the worldwide leader in musical instrument sales, is enabling its 20 million customers an opportunity to cost effectively distribute their music to today's most popular digital music stores including iTunes, Amazon, Rhapsody, Napster, eMusic, and more and receive all the revenue from the sale of their music. Guitar Center's multi-channel retail assets include over 315 brick and mortar locations that include 214 Guitar Center branded stores and 105 Music and Arts Center locations. In addition to the brick and mortar presence, Guitar Center Corporation's online properties include Guitar Center.com, MusiciansFriend.com, Music123.com, HarmonyCentral.com, and Woodwind and Brasswind (wwbw.com), which collectively have a commanding online market share. Guitar Center has an active and growing customer base of over 2 0 million musicians, many of whom are actively selling music to their fans. Marty Albertson, Guitar Center's CEO, has joined the TuneCore board along with Gill Cogan from Opus Capital and Jeff Price, the CEO of TuneCore.
TuneCore.com, the industry leader in digital distribution, has changed the 100-year-old rules and model of the music and now the film businesses. It is a low, flat fee service that delivers anyone's music and videos to iTunes, eMusic, Amazonmp3 and many other major download sites while taking no rights and no revenue from the sale of the music. Artists are building careers, selling significant volumes of music and generating revenue while keeping their rights utilizing the new model created by TuneCore. TuneCore has delivered the music of Keith Richards, Bjork, Jay-Z, Public Enemy, Nine Inch Nails, and thousands of others to the digital download stores. For more information, please contact Nick Loss-Eaton [email@example.com] or Matt Hanks [firstname.lastname@example.org] at Shore Fire Media or visit http://shorefire.com/clients/tunecore.
About Opus Capital
Opus Capital is an early-stage venture capital firm with more than $1 billion of committed capital under management, investing in committed, high integrity entrepreneurs building market-leading technology companies. The team has participated in the successful outcomes of more than 80 companies (including 50 IPOs) in the U.S. and in Israel including Adaptec, AirGate PCS, BlueNile, Brocade, Ciena, DoubleClick, Electronics for Imaging, FedEx, Genesys, Harmonic, Informatica, Kidaro and Vantive. Opus Capital is headquartered on Sand Hill Road in Menlo Park, California. For more information, visit www.opuscapital.com.