Wellington
Selection to showcase its 'social commerce' platform at
MIDEM
in late January is a big deal for Wellington Internet start up
MusicHype has spent the past year perfecting its business model, which reward fans for supportand interest in a band through conversations they have across various social media platforms such asFacebook and Twitter.
In turn, through exclusive deals with the bands themselves, fans are able to use MusicHype'sonline shop to purchase concert tickets, digital downloads, USB and vinyl recordings, and T-shirtsand other merchandise related to the band.
A recent campaign example was allowing fans to select, and talk to each other through socialmedia, about their favourite Crowded House live song from a recent American tour. The most popularsongs were put onto a USB memory stick, only available through the MusicHype online store.
MH is one of only 30 music related digital companies invited to MIDEM. Mitchell is to pitch toMIDEM's live audience, as well as a panel of international judges. The six day event attracts over7,000 delegates, across 60 pavilions, with 120 conferences, 3,200 companies and over 400journalists.
Having tested and tweaked its model in the New Zealand market, now's the right time to scaleglobally says managing director, Jeff Mitchell.
"Our platform and widgets and tools allow us to pull band campaigns together quickly," he says.
MusicHype's connections with merchandise partners (such as producers of USB sticks and T-shirts)mean that a warehouse of products doesn't have to be provided. Billing and shipping can be carriedout seamlessly.
Once a campaign starts running, to all extents it runs on autopilot. "We turn it on, and then letthe fans run it," he says. "For the past two months, we've had six overlapping campaigns. The reasonwe can do it is because everything's pre-built, and run through 'The Appreciation Engine'." (Seeprevious sticK explanation of the company's 'secret sauce'
Naturally, MusicHype's been talking to some senior music industry people, "all of whom can seethe potential of our idea," says Mitchell.
The company's already generating significant revenue, with Mitchell being absolutely clear in hismind that the business model "has to be about revenue."
Feelgood experiences may be good, "but there's a middle space where a band's fans are happy andprepared to pay, and the band gets the exposure it needs and also gets paid."
To get to scale, MH needs to get to the U.S.A and European markets - the places with volume. Thisis where exposure at MIDEM could provide a valuable leg up to those markets.
MusicHype would like to develop relationships with some high tier bands and run campaigns inconjunction with them.
The company's open to its long-term options, which could be being acquired by a large new mediabody, setting up an IPO, sale to a large distribution company, or continuing to do it all themselvesand growing organically.
Ironically, the old-school record label companies could also be interested.
"Things are happening very quickly in the social media space," Mitchell says. ”Labels know theyhave to adapt, and they’re interested in what we’re doing”.