Turntable.fm’s Seth Goldstein On Monetizing Music Discovery & User Engagement
Turntable.fm has gotten off to a strong start since launching in May with $7 million in funding and 600,000 users just three months in. Since then Turntable has continued to grow and catch media attention and is now developing relationships with record labels. Cofounder Seth Goldstein discussed business model and monetization possibilities with VatorNews (video below) and at Billboard FutureSound.
Turntable.fm Cofounder Seth Goldstein Interviewed on VatorNews
Following a very successful summer, Turntable.fm has continued its buzz-building run with an opening spot on Wale's "Ambition Tour" and the early signs of iconic status as other startups become known as the "Turntable.fm for [fill in the blank]".
At last week's Billboard FutureSound conference, Seth Goldstein revealed that Turntable now "has a million registered users and a passionate core of 20-40,000 daily active users…who use it an average of 10 hours per month."
But the question of how Turntable will make money looms as ominously for them as for any other music or web startup that hasn't yet built a solid revenue stream. In the above interview with Bambi Francisco Roizen on VatorNews, it's noted that Turntable has made around $100k in affiliate fees for music sales. But as Seth Goldstein reveals, Turntable doesn't expect to make big money from such sales, given what he considers a low amount for affiliate fees, and also doesn't expect to make money off low-paying banner ads.
Goldstein claims that Turntable is close to reaching licensing deals with major labels which will help open up not only product design options but monetization options as well. However, the primary mover for monetization will be the deep engagement of users on Turntable.
At 8:30 in the video, Goldstein discusses Turntable's business model noting that the "most important asset we have that we're going to continue to build is engagement".
For example, he hopes to follow the lead of social gaming companies and offer premium avatars and virtual goods. On a related note, he suggested that additional premium services might be developed for Turntable though he did not get into specifics.
Given Turntable's status as a music discovery tool based, in part, on music sales, marketing possibilities designed to monetize engagement seem likely. Though in the interview he mentions that someone like Kanye West would, of course, draw quite a crowd, at Billboard FutureSound he revealed that:
"Turntable.fm is turning down requests to have Kanye West or Bruce Springsteen DJ Turntable.fm rooms that could fit 200,000 people. Instead, the company helped Adele invite 200 'super fans' to a Turntable.fm room to debut their [sic] new album."
At FutureSound he also claimed that "music companies can make money off the audience in Turntable.fm rooms" from which, clearly, Turntable would also profit.
Hypebot contributor Clyde Smith maintains his freelance writing hub at Flux Research and blogs at All World Dance and This Business of Blogging. To suggest topics for Hypebot, contact: clyde(at)fluxresearch(dot)com.
The Turntable.fm novelty has worn off already.
As novelty always does. Any successful company has to move beyond that stage. It’s Turntable’s ball to drop and it’s going to come down to revenue.
Is it just me or is Seth painfully gritting his teeth as he says nice words about the major labels!
I’ve noticed that most of the leadership of companies that have to work with major labels tend to be rather euphemistic about what a brutal process it can be to work out licensing deals. And he’s in the midst of it so I bet those teeth are getting a workout!
Regardless of whether the novelty has worn off, the question is whether the experience provides for a better curated listening environment than something like Pandora or Spotify. I would much rather use Turntable to passively listen (with the occasional banter in the chat room). However I usually spend more time discovering music on other music platforms.