FanBridge Applies the Zappos Model to Music

There’s no point in rehashing yet again what a crappy situation the music industry is in, and how it still can’t find a way to build a business around online distribution. But there are opportunities for web startups to provide valuable services around music that don’t involve self-defeating licensing deals. One successful example is FanBridge, which provides tools that service the most crucial aspect of the music biz: the relationship between artists and fans.

What 3-year-old FanBridge does is very, very simple: help musical acts email and text their fans. It connects tens of thousands of artists with more than 50 million registered fans, sending out close to a million emails per day (and adding nearly a million fans per week). In addition to countless up-and-comers, FanBridge counts among its users high-profile musicians such as Carole King, Imogen Heap, Lil’ Jon and Keith Urban.

To compete with larger music marketing outfits such as ReverbNation, New York City-based FanBridge makes service its main focus, in the “Zappos model of customer relationships,” says co-founder Noah Dinkin. As with Zappos, FanBridge’s core technology and product aren’t particularly innovative, but service is the x factor. Good service means more users; FanBridge says each new client refers, on average, three or four more. And those users often end up converting to subscriptions. Typically an artist will convert after four months, to plans that start at $7/month and run all the way up to $250.

The company turned profitable earlier this year but will dip below breakeven this month due to new hires, according to co-founder Spencer Richardson. It raised angel funding in March from Dave McClure at the Founders Fund, Jeff Clavier and Chris Sacca.

FanBridge started very small back in 2006, with just an email list tool that could target nearby fans. Dinkin and Richardson launched the company after graduating from NYU’s Stern business school (they describe themselves as non-technical, and say they ended up basing their product team in Buenos Aires after finding “a friend of a friend who knew a guy” there). They treat their customers they way they believe artists should treat their fans, giving them free incentives, measuring their engagement and creating a conversation. “If you build things people ask for you’ll always have customers,” says Dinkin. Though it is a marketing company, the company’s own marketing budget amounts to $10 per month for Google ads on misspellings of its name.

FanBridge’s master plan is to create a platform for “fan relationship management,” and to help its artists become brands themselves, building an experience around their lifestyles. Though a Web 1.0 technology like an email newsletter isn’t going to yield the viral social effects of participating in an existing online community, FanBridge says it can compete with the likes of Facebook and MySpace by integrating with them. Plus it does have the email addresses of some 50 million people.

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