Music lovers will drool over Grooveshark, the largest international music streaming and discovery service that welcomes over 20 million visitors to its site. The site is designed to allow users to discover great new music and artists based on their particular music preferences. Sam Tarantino, the CEO of Grooveshark, chats with us about the future of the music industry, the inspiration behind Grooveshark, and what the site can accomplish for up and coming musicians.
Tell us a bit about Grooveshark and how it differs from other music sites? While we started and have grown as a music search engine, we are focused on being a platform for artists and users. We believe that the consumer is moving towards paying for experience rather than product so we are doing everything we can to empower artists to find and build new fans to drive them to a touring experience. We are seeing DIY artists blowing up on YouTube and other online channels yet no music service has quite focused on that. We want to be the standard for building plays and fans.
What was the inspiration behind your idea for Grooveshark? I drove by a music store that had a sign outside that said "Buy-sell-trade" and I was inspired to get into the music business as opposed to try and build a career as an artist. Isn't it ironic that here I am looking to help thousands of artists build their careers by leveraging the democratizing effects of the internet. We definitely live in quite the times.
How did you come up with the name? My co-founder Josh would code name his development projects by favorite color and animal. My favorite color is red and animal is shark because they have to keep moving to stay alive and are fierce. That best describes my personality so it became project 'red shark.' Then we liked the shark so we tried different music words other than red like mp3shark, musicshark, songshark, and finally Grooveshark stuck and we loved it. Our designer at the time then made the fin logo and we were in business!
Quiet Company, the company's flagship band, has had tremendous success. How exactly has Grooveshark helped to launch their career? We found them at a showcase in Austin. They had great songwriting, great live performance, great presence, and they were a great group of motivated guys so we decided to test them by giving them radio 'spins' on Grooveshark. In other words, we put them in front of users that had listened to similar sounding artists. They performed amazingly in these tests (better than 10 other bands we did similar tests on). Over the next year and a half we promoted them and their album/singles and from 0 plays and 0 fans on Grooveshark and a few thousand plays on YouTube, we got them to 1.5M video views on Youtube and now over 75,000 plays per month and 27,000 listeners per month on Grooveshark sustained now. We just started their tour and have sold out 14 dates already. We've proven that we can take a band from nothing to a well-established online presence followed by a monetizable tour at our relatively small scale. That is the formula in the new music business.
What is your vision for the future regarding music and Grooveshark? We want to build an ad supported artist platform business to a top 10 website (roughly 1 billion monthly users). Realistically, on web advertising you can earn $3-4 per user per year (Facebook does $4.30/user per year) so at that scale it is possible to do $3 - $4 billion per year, 60% of which would go to content partners based on industry standard revenue shares so that is roughly $1.8 - $2.4 billion/year to content owners at scale. Subscription is also on top of that although it is harder to ascertain those numbers simply because the market for people who are willing to subscribe is sub 20 million users. I'd rather build a $4 billion/year ad business than a $200 million/year subscription business. On top of that, we are looking at taking a percentage off of artists' revenues based on providing a promotions platform. We are looking at signing acts that can grow to move 100k, 250k, 500k, 1M fans into venues at $10 - $100 ticket prices. That has the potential to grow into another $1Bn/year business for us and our partners. In the coming years the industry revenues will be based on ads, tours, merch, product deals, and some subscription.
Do you have any projects or updates on deck? Lot's of product updates are coming in Q4. We're redesigning Grooveshark from the ground up and I'm thrilled so far with the progress. More on this soon.