I watched with interest the recent layoffs by digital music widget provider Snocap and their subsequent decision to look for a buyer for the company. For anyone who’s unaware, Snocap is a company founded by former Napster head Shawn Fanning and provides music sales platforms for signed and unsigned artists.
The sales platforms, like most widgets, are HTML based stores that can be added to any webpage, blog or (theoretically) email. Although it may sound like old news now, Snocap was one of the first companies offering music widgets to artists, and their summer 2006 deal with MySpace seemed to have them destined for great things. I thought so – I nearly accepted a position at Snocap last December. So what went wrong?
Listen to and know your customers
What’s become clear to me since last year is the growing ubiquity of music is causing a devaluation of the initial purchase of music products, which usually means recorded music. Most people are viewing their initial encounter with a band (indeed, even with a new album) as one that they should hear for free. The job of a good digital music service is to monetize this interest at a later date.
This is especially true among MySpace’s core audience of 12-19 year olds, then and now, but Snocap stores normally priced music at $0.99/track (although artists could price as low as $0.45/track). The killer was that payment was made via PayPal or credit card, a method of payment that few teenagers have access to.
Although not acknowledged at the time, possibly because of the then unique “viral” element, the stores also put Snocap in direct competition with iTunes, and the past decade is strewn with the charred business plans of companies who tread in that direction.
Worse still was the lack of a ringing endorsement from the point-of-first-contact for Snocap: Independent artists. More than one artist raised concerns with me about the service last year. The main point at issue was turning what was essentially a networking platform into a sales pitch – the feeling was that, after months of work to build relationships and fan trust via MySpace, the move would have a negative impact…of course, these same artists understood what MySpace is and is not, which leads me to…
Understand the platform
Given the volume of visitors to MySpace in mid-2006, it made sense to attempt to monetize those visitors, especially if it would provide a way for independent artists to make income.
But MySpace never was or will be a sales platform – it is the default destination to hear a band and make an initial connection but it is far from an Amazon-esque trusted vendor. MySpace is like a market with a billion sellers and no buyers. Taking a stab at changing how MySpace is used was admirable, but illustrates the immense difficulty, some would say futility, of changing users behaviour on a certain platform.
I think Facebook (with Pages & Beacon ) is trying something similar, but their success is far from assured for the same reasons.
Customer service matters
As revealed by Derek Sivers about CD Baby’s ill-fated relationship with Snocap, there was a more fundamental problem plaguing Snocap’s offering – The widget, customer service and overall service weren’t very good.
The widget couldn’t be skinned so it stuck out like a sore thumb on most pages, technical support was spotty at best and unresponsive at worst and the most obvious of features (allowing an artist to sell whole albums rather than track by track, for example) took forever to implement. Album bundling was only made widely available in July 2007, nearly a year after the MySpace deal.
Snocap’s endeavors were worthy, if only for what you can learn from the mistakes. But so many seasoned marketing and digital media folks poured their hearts into the project that it’s clear the volatile digital music space is one to be approached with caution, especially on the scale Snocap were aiming for; namely a whitelabel, viral storefront service for unsigned, indie and major label acts.
In the end, that might be the key lesson here – there is not just one solution to making money from digital music, but many, and each new music business requires it’s own unique solution.