Hello Music recently grabbed headlines when it received $4 million from KVG Partners. But what's unique about Hello is its business model. Created as an "opportunity engine" for d.i.y musicians, Hello takes no upfront fees.
A team of professionals at Hello connects artists with service providers like Topspin and Tunecore, new media like Slacker and opportunities like Pump Audio. Hello profits only if the artist makes money. In this exclusive interview, managing partner Zack Zalon explains why he and partner Brendon Cassidy created Hello Music and how they hope to service the maturing d.i.y. market.
HYPEBOT: Can you share with Hypebot readers a bit about your background and how that influenced the creation of Hello Music?
ZALON: My business partner, Brendon Cassidy, and I have been very focused on artist-oriented services for years. He and I are both musicians; I played in bands for years and ran The Troubadour in Los Angeles as well, booking and promoting hundreds of bands. He is an active composer with an MFA from Cal Arts. We met at an early-stage interactive artist service called Farmclub as the first 2 employees. The idea was to use the internet as a tool to find and support the music stars of tomorrow – great idea, but just too early, and we soon left together to start a new business for Virgin. But we never lost sight of that original idea – that artists and opportunities will eventually find each other on the internet, that the ecosystem will go digital, and we vowed to eventually dedicate ourselves to that belief.
We have continued to stay active in the unsigned-music landscape throughout the past decade in a variety of ways, and have been waiting for the right opportunity to heavily invest in the space. We felt very strongly early last year for a number of reasons that the timing was right, and we started aggressively building out the system. Hello Music is what those efforts have birthed – though it’s a brand new service, it’s something we’ve been working on for over 10 years, and something we’re incredibly excited to be a part of.
A Digital Blueprint
HYPEBOT: Your marketing materials talk about a “digital blueprint” that you’ve used with Fortune 500 media companies. Can you explain what that is and how it can applied to music?
ZALON: The Digital Blueprint is a service of Wilshire Media Group, our design & development firm. We’ve been using this process for many years and for many clients. It’s a way of uncovering answers to generally complex questions about how to ensure a product or strategy has the highest likelihood of meeting whatever business objectives our clients might have. The process is proprietary, but the idea itself is fairly straightforward – we’re looking for answers within real data, data on the industry, data on competitors, data on the people that might use whatever products we’ve been asked to build. Once you have reliable data, it’s much easier to tease out where to take a product strategically, and it’s much easier to design something that works successfully.
We’ve used the Digital Blueprint successfully across a landscape of industries, but it’s just as applicable to music. We knew what we wanted to do with Hello Music, but we first wanted to make sure that we were building something that musicians actually wanted, something that would provide them with genuine value. Putting ourselves through the Digital Blueprint helped us to find the intersection of value to musicians, value to our partners, and long-term enterprise value for Hello Music.
HYPEBOT: One of the strengths of your business model seems to be that you chose the artists that you work with from open submissions. Can you tell us a bit more about how that A&R process works at Hello Music including who is choosing the artists and what the criteria are?
"We're providing value to artists no matter their level"
ZALON: I actually think the strength of our business model is that we’re providing value to all artists, no matter their level of expertise. Clearly the lion’s share of value is with the artists who are at the top of their game, but we’ve been very focused on making sure that we’re there for everyone and anyone.
Our A&R process is made up of 2 primary components: first, we allow anyone to upload their music for free. We then listen to every artist and every track, we rate the content and provide contextual data such as who that artist might sound like, and what an artist’s specific strengths might be. The second part of A&R for us is the connection to actual opportunities. We’ve secured really interesting and valuable partnerships, and we’re giving the access to those partnerships directly to all of our artists. If an artist is right for it, we’ll get them played on Slacker Radio or have them programmed into Yahoo Launchcast. If their music is appropriate we’ll have them profiled on Getty Images’ Pump Audio for licensing. We have partnerships with LyricFind for lyrics distribution, Audio Micro for micro-stock audio licensing, Next Big Sound for data, and many others.
Each is valuable in its own unique way to artists, and together form a very powerful ecosystem of opportunities that we believe will make a genuine difference in artists’ lives. I mentioned though that the key is to provide value to everyone – if an artist just hasn’t risen to the level of a Slacker Radio or Getty, we still look for opportunities for them. Perhaps discounts on services that exist, maybe access to workshops or the ability to find other band members. The key is that everyone, somehow, will find value by being a part of the service.
Why Use Hello?
HYPEBOT: Many of the opportunities offered by your partners like TuneCore and Getty are already open to all artists. Why should an artist get involved with these companies via Hello rather than direct?
ZALON: There are a number of reasons why working through Hello Music adds value to an artist, but it varies with each partnership. In the case of TuneCore, they are providing a 30% across-the-board discount to Hello Music artists, so there’s real money to be saved.
With Getty, we have a ‘premium content’ section exclusively for Hello Music artists, so the likelihood of being selected for a license is higher. And because our system is connected to each of our partners, musicians don’t have to upload their music over and over again. Once they select an opportunity, all of their music and data will be automatically transferred to our partners. For artists it is a one-stop-shop for content delivery, and a simple service for getting the most out of all of the opportunities that already exist in the digital music landscape.
HYPEBOT: I know that you take no money upfront from the artist and receive a percentage only if they make money. Can you tell us a bit more of the range of fees you are charging artists? Is it similar to a management fee?
ZALON: We only make money when our artists make money – that’s a key principle of our product. That philosophy keeps us very aligned with the artists, and provides what we believe is the right focus for our business. Each opportunity has its own arrangement, and we’ve kept the opportunities themselves ‘modular’ so we can protect this flexibility.
In some cases we’ll ask for up to 30% of whatever we’re directly making artists. In many cases it will be much less, more like 5%. Many of our opportunities are free, such as the ability to link in with Next Big Sound for data analysis. In those cases we take nothing since we’re not making the artist any money. In some cases we’re saving the artist money by pre-negotiating discounts on goods and services that they might need.
For us, each opportunity is its own standalone element. Some are good for certain artists, some great for others. Some are free but help with awareness for our artists. Some pay artists very well, some cost money. The key is to ensure that each provides genuine value, that each lends itself to our overriding goal of improving and accelerating the careers of unsigned and independent musicians. That’s the only reason we’ve built Hello Music, and everything we do is geared toward ensuring that outcome.
