By Eliot Van Buskirk of Evolver.fm.
We’ve been following the progress of Earbits, because it’s such an outlier in the internet radio arena. Witness how it experimented with charging bands rather than listeners. Now, the company has a new idea: paying artists in data and promotion, through a new kind of currency based on fans taking certain actions rather than paying.
It works like this:
1. A band has some music. They tell their fans to get it at Earbits.
2. In order to stream a song, the fan needs 10 “Groovies.” Fans can earn these points in a few different ways:
- 500 Groovies for opening an account
- 100 for sharing music from Earbits to Facebook or Twitter
- 50 Groovies for Liking the band’s official Facebook page or email list.
- Earbits calls them “the first social currency for streaming music.
3. The artist has a data connection to these new fans for promoting live shows, downloads, T-shirts, vinyl, and the rest. Basically, they are paid with fan data (something some of them desperately want more of) and promotion to new fans.
Earbits, which distinguishes itself by focusing primarily on the needs of artists rather than fans, will also continue to function as a sort of pay-to-play radio service. To us, that sounds about as fun as listening to Spotify ads all day, but this new on-demand streaming thing makes more sense.
If you really like a band, you’d probably create an Earbits account if it means you get to hear their new tunes. And if all you have to do is share the band’s music or join their mailing list or Facebook page — things you would probably want to do anyway — then so be it. Artists (and labels) want this stuff, and Earbits Groovies system, regardless of what you think of the name, gives them another mechanism for getting it.
According to Earbits, they might as well get this data, because it’s not working to pay them with money alone, despite the fact that “freemium” subscription services like Spotify contributed to 2013 being the first year in which global music revenue increased.
“Over 70 percent of the people on Spotify are not paying, and I think there’s a lot of evidence that the ad- and commercial-supported experience not only doesn’t generate enough value for the industry, but it makes the experience worse for the consumer,” said Earbits CEO Joey Flores by phone. “If you want an ad- and commercial-supported users to become more valuable, you have to make your experience worse by adding more commercials or making the ads more intrusive.”
Instead of advertising or payment, he says, people should pay for music with their contact information or by promoting music as a sort of street team.
“What we’re saying is, these people are already out tweeting about the bands that they like, they’re going to shows, they’re doing things that do add value,” he continued. “We think we can track that value, encourage people to take more actions, and effectively turn what is a free consumer — someone who is not paying — into a lot more value than if we just started inserting commercials into their experience and paying fractions of a cent to [the artist, label, songwriter, and publisher].”
Future plans include letting fans earn these Groovies by checking in at live shows or buying stuff, and helping bands reward their most loyal fans by hanging out with them in a Google Hangout.