The Rise & Fall of Snocap – What Did We Learn?

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.

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13 Responses to The Rise & Fall of Snocap – What Did We Learn?

  1. Matt @ Kurb NZ says:

    Hey cool post – I actually followed the trackback from new music strategies

    Haha I hadn’t been following this I guess I better take my widget down from my ‘space then y’all!

    Facebook doesn’t cater to bands the way myspace does . . . and music ain’t free yet – so what next for storefront widgets? Nimbit? When will a serious contender enter the market?

  2. Hey Matt,

    Not sure if there’ll be a real contender in this space – One of the key problems with the MyStore was that it was a direct contender to iTunes. The 800-pound gorillas in the digital music space are hard to move.

    That said, there’s a chance a quality service might reach some kind of critical mass. I LOVE the PayPal storefront widget (again, because it’s a trusted vendor) so I’d bet my chips there.

    http://tinyurl.com/2omnth

    As small as some of these services contribute, however, I think it’s wise to focus on a large amount of smaller revenue streams rather than one or two “homeruns” – I’m sure a lot of bands have made a fair chunk of their rev. this year from SnoCap, it’s just not enough to keep the company afloat.

  3. SWARMIUS says:

    We just barely got SnoCap to work — and tonight (Jan. 2, 2008) our account disappeared completely. Has SnoCap gone under?

  4. Sorry about the issues with the login, Swarmius – However I think that’s a product of the Snocap interface in general.

    I’m not sure SnoCap is for the dustbin anytime soon – there’s a lot of value in their “fingerprinting” catalog if nothing else, and with the death of DRM this week (YAAY!), there’s still a lot of value in the widget if it’s overhauled and repitched to the MySpace brethern. My problem is that it needs to be repitched at all.

  5. creek says:

    One artist is still recommending that folks buy her music on snocap, so I did on a whim.
    SNOCAP double charged and and gave me no music.

    After reading the horror stories at

    http://cdbaby.org/stories/07/10/19/0126457.html

    it seems like you have not convyed the full degree of anger and frustration that artists
    (and this customer) feel towards SNOCAP.

    At least it wasn’t a subprime mortgage I was sold. But the principle is the same– take advantage of people and run with the money.

  6. […] The latest buzz is about Ad-Supported music (Imeem, We7, qTrax), but evidence is arising that basing your business on whether or not people click on ads in a social network environment may be a bad idea. […]

  7. I like what you’re saying here (I’m here from NMS, too). I had looked at Snocap about a year and a half ago, and thought of going with them, but something about how they operate seems odd to me, and I guess I was right. I want to have a good online presence for selling mp3s, but I don’t think Snocap is it. Tunecore looks inviting, but still can have some big charges if you have a lot of songs/albums and the like and you may not sell enough to recoup your costs of going in with them.

    Recently I sold some mp3s to a fan using paypal, which I actually liked; I was able to create a custom package for him to download, with the song in 320kbps mp3 and OGG vorbis format, as well as the video for the song, and it seemed to work very well. I can’t control the download entirely at this time, as I don’t have a system for restricting the download; but all the same, I’m not going to freak out on that; I want more people to hear my music. If I can keep doing sales like this, I might just go this route, and sidestep the online services that have not yet proven to me that they’re up to the challenge of helping me get to my goals.

  8. David Rowley says:

    I think the original article hits a few nails on the head. I know I’ve learned a lot from te experience, and document some of it here

    http://daverowley.blogspot.com/2007/10/truth-about-cd-baby-and-snocap.html

    and here

    http://daverowley.blogspot.com/2008/02/startup-reflections.html

  9. @Brian – I had a similar reaction from many of the artists I approached enthusiastically with the idea in 2007. There was a certain reluctance in the delivery that, in hindsight, I maybe should’ve heeded more before endorsing the service so wholeheartedly. Maybe something to learn about listening to artists, there…

    @David – that’s some TERRIFIC insight you provide, David. Both of those posts are bang-on IMHO. There are no real answers in this game – I suppose the greatest revelation for me was the quality of people who’d devoted energy to SnoCap for it to still fall short. But as you so eloquently point out, and which I will in-eloquently paraphrase, “them’s the breaks.”

    In re-reading my post, it does smack of revisionism. In honestly evaluating my feelings about SnoCap in 2006, I have to say that I was convinced of it’s imminent success. I still think evaluating the company in light of events is valuable, but I could’ve been more even-handed and less “i told you so”. thanks for enlightening me!

  10. […] Week) So, One Week Later is the Album Dead Yet? (The Seminal) MP3 Cover Design (Simon Idol) The Rise and Fall of Snocap – What Did We Learn? (Penny […]

  11. David says:

    HI
    I get that artists are ticked off because they havent been paid. I tried to buy from snocap and they put me through an endless regime of registering for no reason at all. In the end I gave up and built my own sytem. it takes mobile payments the artist can move his or her cash straight to their paypal account and it does dual downloads of everything.
    Have a looksee.
    It also creates barcoded tickets if you are of the concert playing kind
    Cheers
    http://www.myspace.com/thebizmo

  12. kayashiva says:

    does anyone know how to close a snocap account and remove it fromm myspace.

  13. pennydist says:

    you should be able to hide the snocap store from your myspace page via the “edit profile” option on your myspace. There should be a “hide your myspace music store?” option on the music section.

    I’d email support@snocap.com to cancel your account.

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