

That’s a Big Growth. Better Get That Checked Out. - earbitscom
http://blog.earbits.com/online_radio/thats-a-big-growth-better-get-that-checked-out/

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rdl
I'd be pretty happy to be Turntable.fm right now (I know Seth and Billy). I'm
amazed that they pivoted so completely from Stickybits to Turntable.fm.

There are definitely licensing issues, but with phenomenal growth, and at
least some viable business model (embedded rooms, celebrity appearances,
etc.), they should be able to negotiate with content owners.

Once they hit escape velocity, they could start restricting the catalog of
music to lower licensing costs, and maybe partner more deeply with content
owners (to promote new artists, etc.) Until then, subsidizing relatively low
licensing fees with cheap VC money is a great strategy.

BTW, if anyone is an amazing backend engineer (python, streaming, etc.)
(www.quora.com/Turntable-fm/What-is-the-technology-stack-behind-Turntable-fm)
please contact me (ryan@venona.com); I think they're looking for help scaling.

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earbitscom
I would definitely be happier owning Turntable than Stickybits.

That being said, there is no reason for mainstream content owners to negotiate
with them. If Pandora has no bargaining power, why would Turntable? Pandora
has even more ability to promote at will, since they pick the music. Some
content owners may let them use the music for promotional reasons, but it's
likely to be dwarfed by the use of mainstream music by most people using the
service. Take away mainstream music and it makes it hard for most average
people to DJ anything.

I do think that they have a better chance at monetization than a standard
radio service, both by charging fees to get into popular rooms, or getting
people to pay for cooler avatars, plus by having more engagement with the
monitor (higher display ad revenues). However, they also pay even more for
their music than Pandora, since at least one out of 6 users or so is an on-
demand stream.

The major point of the article is, growth is great. Growing too fast to figure
out how you'll make money before your costs are burying you is not a game you
want to play in the music industry. In any other industry VCs will tell you to
figure out monetization later. In music, very few will give you that benefit
of the doubt anymore.

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macavity23
Nice article. Also possibly worth mentioning that if you're raising tens of
millions and hoping to exit for billions, you'll be giving away almost all
your stock.

If your valuation is more modest, you'll keep much more control.

