Friday, January 11, 2019
Steereo: Connecting Ride Sharing Drivers, Music Discovery, with Anne Kavanagh
In an age of online music streaming, and a general decline in people turning to traditional radio for their music, many artists have a tough challenge of figuring out how to get their music out to new fans. Los Angeles- and New York-based Steereo (www.steereo.com) has a new idea: partner those artists with ride sharing drivers, and pay those ride sharing drivers to play their music to the ever-changing variety of people who hop in their vehicles. We caught up with Steereo CEO Anne Kavanagh earlier this week to hear more about the company and its plans.
Explain what Steereo is and how it works?
Anne Kavanagh: At a high level, we're a music discovery network powered by ride share driver's. We're a multi-sided marketplace, start with the driver. Rather than using streaming services or radio, drivers use Steereo because they get compensated to do so. The product is an app, available for them. The content that we serve is all new music and releases. Drivers earn, on average, 3 cents per minute for streaming that music, with compensation ranging from 1 and 9 cent per minute. It works out to about 3 cents per minute on average. In terms of artist side, the reason they use us is an alternative to radio promotion and marketing. It's a vehicle for marketing new releases, no pun intended. A couple of reasons this is a value to them, is they can allocate marketing budget instead of spending on ads, and secondly, we track all of the engagement from the driver's app--things like pauses, skips, volume changes, and more, and we track the geolocation and the movement of the drivers. Aritst who are running campaign sees how many times their tracks are played, the average length of song, and performance and engagement. We let them see things like how much of their music was played in full, versus how much was not played fully by someone wanting to hear a different genre, or if they stopped listening because someone got out of the car. Some artists are also using this for split and A/B testing. For example, they might want to see what version of a song to put on an EP or not, or which songs they might want to put additional marketing behind on other platforms. What makes us different from streaming platforms, is that when you're sitting in the back of a car and ride share, you're sitting in an unbiased environment. You're most likely expecting to hear mainstream music, such as Top 40 on the radio, or someone's Spotify playlist. What we do, is we essentially facilitate a connection between a new listener and a potential new fan for the artist, in an environment where that's unexpected on behalf of a listener. The artists pay about 5 cents per minute to stream on the app.
Where'd you get the idea for the service?
Anne Kavanagh: One of our co-founding team members is a recording artist, and the rest of us were working on his strategy a few years ago. We recognized the struggles that artists have getting their music to market. In the product world, you build a product, craft a marketing strategy, and acquire a user or customer. However, the music industry doesn't work like that. We started to think about another way to be able to get into the market. Radio is traditionally instrumental in breaking an artist, because the listener is in a captive environment through a period of time, and they don't have anywhere to go aside from listening to what is playing there. We thought about recreating that experience. Ride sharing is a huge market, and people are now using ride sharing as their primary mode of transport, rather than buying cars. Trying to solve our own problem, we had the experience, insight, and knowledge of how much budget it takes to actually get music to market, and insights into spending on marketing campaigns. In January of 2017, sitting in a back of a Lyft at CES in Vegas, our driver was actually listening to a Latin track playlist his friend from home had sent him. We asked him what he was listening to, and he told us, his friend's music. That's when the light bulb went off. We wanted to decentralize how artists who were frustrated with having to pay radio promoters incentives to play their music. In July of 2017, we started to develop the app, and we had our pilot from September 2017 to December 2017, and went live in March of 2018.
So how far along are you on this now?
Anne Kavanagh: Currently, our network is over 14,000 drivesr, and we are active in New York, Austin, and our newest markets are LA, DC, and Philadelphia. We'll have ten more markets by the end of March this year. In terms of the artist side, we now have 2,000 artists. Since we launched, we've had everyone from brand new artists with first releases, to major label artists that are already signed. They're from all over the world, and we have a prominent base of artists from the US, plus France, the UK, Germany, and Australia.
What's your background, and how did you get into this?
Anne Kavanagh: I came through the ranks of sales and marketing. I worked with the Irish Independent, the national broadsheet in Ireland, in print ad sales. Then, about nine years ago, I transitioned into digital. That was my first time in buying and selling of digital advertising. I saw a disconnect with how advertisers buy and media sells, so I started my first startup, a media marketplace, seven years ago, and moved to New York. Over the last five or six years, I have had two other products, and about three and a half years ago, I moved to a digital agency out of New York. We worked with everyone, from BMW, Budweiser, and Guinness to seed stage startups, anyone who touches digital assets, from ad campaigns to rich media, websites, apps, and the product management you do in the course of running an agency. Working with such a wide variety of clients allowed us and my team to see inside a variety of business models, and also see problems that needed to be solved, the market challenges and technology challenges. Jennifer, one of my co-founders, had a music management agency based out of Dublin, and I started to do brand development and digital strategy, with artists coming from there. That intersection turned into a segue into Steereo and the music tech scene. We started to think about how we could build a product in the music industry, which was harmonious to all partners, streaming services, labels, managers, or artists, while providing fair opportunity based on talent, rather than being relationship driven. We also were thinking about artists coming through the platform, no matter what stage, essentially running their own business, and providing them with experience that you get when you fund a startup, thinking on how we provide those resources and insights so they can grow their career.
What part of your operations are in LA?
Anne Kavanagh: New York and Los Angeles are our base teams. We have our product and driver acquisition teams in New York, and in LA we have seven, focused on music approval, artists submitting music, and business development and relationships with the music and advertising industry.
Finally, how are you funding the company?
Anne Kavanagh: We self funded the company until June, and we partook in an accelerate program with Quake Capital, a New York fund. We spent three months with them, and August we raised our seed round.
Thanks!