Trevor Hinesley, best man of Brian Hood and Founder/CTO of Soundstripe, joins Chris on the podcast while Brian is traveling through Europe on his honeymoon. Some of the topics discussed include sync licensing, Spotify and streaming royalties, and Brian’s most embarrassing moment.
In this episode you’ll discover:
- Why Soundstripe’s model is successful as the music industry changes
- Why streaming royalties might not be a bad deal for writers and artists
- How digital marketplaces democratize music creation
- What you can learn from software development companies who use Agile Software Development
- Why artists should release content regularly, rather than albums every year or two
- How artists can “hack” Spotify royalties to get larger payouts
- Why you’re giving Spotify free content if your song is more than 31 seconds
- Why you need to adapt with changes instead of becoming a stick in the mud
- How creative people will win in the modern world
- Why you should identify the jumps you can make it stay successful through change
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Quotes
“Living in a victim mentality . . . You don’t gain anything from that. You’re able to moan, but you don’t actually get anything from that!” – Trevor Hinesley
“We’re in the music industry, creativity is the currency by which we live..” – Chris Graham
Episode Links
Websites
456 Recordings – www.456recordings.com
Chris Graham – www.chrisgrahammastering.com
Soundstripe – https://soundstripe.com/
Seth Godin’s Akimbo Podcast – https://www.akimbo.me/
Courses
The Profitable Producer Course – theprofitableproducer.com
The Home Studio Startup Course – www.thesixfigurehomestudio.com/10k
Facebook Community
6FHS Facebook Community – http://thesixfigurehomestudio.com/community
@chris_graham – https://www.instagram.com/chris_graham/
@brianh00d – https://www.instagram.com/brianh00d/
YouTube Channels
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Related Podcast Episodes
Episode 36: Sync Licensing: The Gateway To Passive Income For Audio Entrepreneurs – With Travis Terrell – https://www.thesixfigurehomestudio.com/sync-licensing-the-gateway-to-passive-income-for-audio-entrepreneurs-with-travis-terrell/
Episode 59: How To Build An Audio Career 100% Online From Anywhere In The World: With Austin Hull – https://www.thesixfigurehomestudio.com/how-to-build-an-audio-career-100-online-from-anywhere-in-the-world-with-austin-hull/
Books
The Long Tail by Chris Anderson – https://www.amazon.com/Long-Tail-Future-Business-Selling/dp/1401302378/
The Innovators by Walter Isaacson – http://a.co/d/iu18fVL
Artists/Labels
Falling Up – https://en.wikipedia.org/wiki/Falling_Up_(band)
Desciple – https://en.wikipedia.org/wiki/Disciple_(band)
Willie Nelson – https://en.wikipedia.org/wiki/Willie_Nelson
George Strait – https://en.wikipedia.org/wiki/George_Strait
Chillhop – https://chillhop.com/
Monstercat – https://www.monstercat.com/
*Nsync – https://en.wikipedia.org/wiki/NSYNC
Britney Spears – https://en.wikipedia.org/wiki/Britney_Spears
Dookie by Green Day – https://en.wikipedia.org/wiki/Dookie
Weezer (The Blue Album) by Weezer – https://en.wikipedia.org/wiki/Weezer_(Blue_Album)
Lofi hip hop beats – beats to study/relax/game to (Chillhop Music) – https://open.spotify.com/user/chillhopmusic/playlist/74sUjcvpGfdOvCHvgzNEDO?si=ABLG20H-TEOVHI2Z5Q5OKQ
Wulfpeck – https://en.wikipedia.org/wiki/Vulfpeck
Videos
View this post on InstagramHappy Halloween from me and @trevorhinesley #dallascowboys #cheerleader
A post shared by Brian Hood (@brianh00d) on
Tools and Companies
Agile Software Development – https://en.wikipedia.org/wiki/Agile_software_development
Netflix – https://www.netflix.com/
Blockbuster – https://en.wikipedia.org/wiki/Blockbuster_LLC
The six figure home studio. Episode 71 wait a minute. Hey guys, it's Chris Graham. Brian Hood is supposed to do the intro, but he's not here I miss him so much. He's on his honeymoon with his wife Megan. They bought a one way ticket to Europe. They're having fun. They're posting pictures on Instagram to make the rest of the world jealous of all these fancy restaurants they're eating APP. And so today we have a special episode with Mr Trevor Hindesley Trevor was the best man at Brian's wedding. He is one of the cofounders of a company called sound stripe. And Trevor had a lot of really amazing things to say as I got to know him at Brian's Bachelor party at Yosemite National Park and at Brian's wedding, one of the things we talked about a lot was Spotify. What's going on with the whole streaming thing and how does this affect our businesses, audio engineer's moving forward.
So Trevor's perspective is really interesting because sound stripe has an interest, a vested interest in thousands and thousands of songs, many of which are already on Spotify. So they are really tuned in to what's going on with Spotify, what's coming next around the corner and how our industry will change as Spotify really dictates the way that records are being purchased slash stream slash listen to all that freaking stuff. So Trevor is just brilliant and I think you guys are going to really dig this interview. As I was listening back through an editing app, I was just blown away with all the wisdom and knowledge that Trevor was dropping on us. So stick around guys. Without further ado, here is my interview with Mister Trevor Hinesley.
Well,
the six figure home studio number one resource for running a profitable home recording studio. Now your host, Brian and Chris Graham. Trevor, welcome to the show, man. Hey man, thanks for having me, Chris.
Absolutely dude. Well, I'll tell you what my favorite thing in the entire world is hearing people's stories. So man, why don't you just sort of dive in, just sort of tell us your story.
Yeah. So uh, oh gosh. Let's see. I was born in Alabama. Probably can hear some of that little Twain's still in my voice. Born in Alabama, moved to Nashville, Tennessee in 2008. And I originally I was going to school for audio engineering and at the time I had to take a math class actually and realize that there was a programming one course I could take that would take my math credit and I was like, sold love computers, let's do it. So got into programming that eventually led to just like a huge passion for software and software development. But while I was in college, I was playing around in bands. I had toured a little bit. And then towards the end of my college career I got in a band that was signing a record deal and doing like a development thing. And so actually I got the call that I got in the band while I was in cap and gown doing graduation rehearsal.
So I went straight from college into that. So I um, you know, got this degree and then was like, cool, I don't get to put it to use, let's go. But I did actually, I had, since we had like a year development deal, I knew I needed a job in the meantime. So interviewed around a couple of startups. I had some offers on the table from some really cool companies in town, but as soon as I brought up like, hey, in a year or so I'm probably going to be on the road and need to work remotely. They, they all rescinded their offer. So yeah, that happened. But I also knew that obviously wasn't gonna give up on that, but I needed a job. So I like went around applying to restaurants and just trying to do the, you know, I was willing to pretty much do whatever I could just to get on the road.
So I no joke though, it was like days after three of my job offers had rescinded after the tour and conversation, I got an email, it was an intro email from a guy that I had worked under at an internship in college at a startup and he introduced me to the CEO of a, it was like a sports focus start up in Nashville and just recommended me. And so I went and met with that guy. His name's Rob Humphreys and credible individual. When I met with him and shout out to Dennis [inaudible] who got me that connection because it was life changing. I went and ate with rob and when we sat down or it was coffee, actually when we sat down, I kind of told him my predicament. I was like, look, I'm going to be honest with you. I'm not trying to screw an employer over, but I want to be, you know, I've got these two passions I want to pursue and I want to be up front about it.
And he was like, tell you what, I need a developer. And he was like, I like you. And I think I would like to help you pursue both of those dreams. So he gave me, yeah, it was awesome. He gave me a just dreamy it very much. He gave me a job doing development and then he kept that promise about a year, little less than a year into that I started touring parttime which went to full time and he let me work remotely. And that moved into eventually migrated away from that position to doing just freelance development. And I was still touring full time and throughout that. And one of my freelance clients introduced me to my current business partners, Micah Santa Ana and Travis Terrell. And you know, he said, I've got these two guys I think you should meet. They've got this idea. And of course everybody has an APP idea.
Right. So I was actually working on a side business with Brian and I don't know if he's ever told you about this, but we were toying with doing a bail bond management application. Yeah. And it's awesome. Yeah. You should ask him about it. Yeah, definitely. So I was working on that on the side so I wasn't looking for something and kind of already had a side hustle I was pouring my time into. But the guy that I had done some freelance work for, who's a good buddy, he was really adamant about like, I think you should just meet with him. I was like, for sure I'm always down. So I went and kind of had a lunch or dinner with Micah and we just like hit it off and for the next like three months or so we just kind of business dated because they had been burned by two technical co founders before that.
So they weren't really looking for anyone on that side. They were just going to do it themselves. But we hit it off and I realized that like one, I really liked them and to the idea for the business was really growing on me. I wasn't as familiar with the sink market, which is pretty much what sounds stripes, focus is in or really the micro sync market. But I wasn't as familiar with it. But the idea was really growing on me and I liked them a lot and I knew that if anybody was going to do it, they were the right guys for it. So I was like, okay, let's do this. I have put together, built like an MVP product and then in February of 2016 we launched it and that was the birth of sound, stripe.com which is my baby now.
That's amazing. So Mvp for you guys that aren't familiar with that term means minimum viable product. So do Trevor, tell me about sound stripe and a little bit more about how it works and what you guys do.
Sure. So when we started sound stripe, really Micah and Travis just kind of had the idea out of a necessity. They were both touring musicians, very humble guys, so they would never tell you this, but I like to dote on them. Micah, he was picked up to go on tour when he was 16 years old, played guitar for some old Christian rock bands falling up. He was their guitar player for a while and then disciple for like 10 years. And so he toured it. If you Google it, he'll kill me for saying this. If you Google Micah Santan backflip, you, there are so many videos of him. Dude, this is what's incredible though. Especially for all the musicians listening. He's one of the only people I've ever seen in the music industry. I'm not the greatest guitar player in the world, but I consider myself a performer.
So I always loved people who could spice it up on stage. Right. And he would literally with his guitar on backflip off of like fullstack cabs and stuff on stage. Yeah. So I'd seen story of the year do that, a bunch of other bands, but they would always toss their guitar to their tech and then do it. And then he talks it back. No, this is like, yeah, it's worth watching. So anyway, Mike is an incredible musician and Travis also, we always joke that he's the real musician of us three because he is like literally a prodigy. The guy's incredible. Just one of those people that can play anything he touches. He can sit down at a piano and you play a song and then he having never heard it before could play it right back to you. He plays fiddle but he flips it, takes a right hand violin and flips it upside down and plays it.
Lefthanded he toured with like, I think he's played with Willie Nelson, maybe George Strait, bunch of big artists like that when he was younger. I say younger like all of us or 30 or under. So he's very successful for his age. Both of them. They had the idea because they had moved out of touring and literally had moved into driving tour buses because they were making more money doing that than they were playing for the band. It's like Mike, I actually went from being the guitar player in his band to being the bus driver because he was making more money. So from that while they were driving on the weekends, they were kind of like also running the production studio they were doing, you ever seen those like houses for cash signs on the side of the road? They were doing like a wholesale that of thing.
They tried a bunch of different stuff, but while they were doing production, they did a lot of jingles and things for film and TV, that kind of stuff. But they realize like it's such a slog because you'd get an agent, but then you'd get an email at like, you know, 11 o'clock or midnight from your agent. That's like, Hey, x business needs a song by 8:00 AM tomorrow. Can you put some together and needs to have this kind of vibe? Sounded maybe like this song a little bit. Not Too much. The lyrics need to be somewhat in this theme, but not too specific. And you know, it's 11 o'clock you're starting on a track and you're like hitting up all your friends to see if anybody's awake and willing to sing on this thing and you split the points on it or whatever and try to get royalties together.
Well, the problem is is by the time you stay up all night and submit that thing, the next morning you in 300 other people got that email. So you're essentially pitching against all these other very talented people you would land. You know, one out of every 30 40, 50 of these and it would be enough to cover your bills for a few months. But it's just like constant stress, living paycheck to paycheck. It's a tough business. So they took all the tracks that they had from the pitches that didn't make it like it's still be great songs, but there could be, you know, one word and the lyric that they didn't like with the theme or whatever. And instead of them having you redo it, they just pick another song that fit perfectly from all those submissions. So they had this essentially a catalog of music that had no real value outside of a video. So they were like, okay, surely our friends, because obviously they had connections in the industry from being in it for so long. Surely our friends had the same problem. So the original idea was like, let's just put this stuff online and see if anybody will pay for it. And that slowly moved into an idea for a subscription service for it. And that's Kinda when I came into the picture.
Man, that's wild. So I know a lot of you guys listening that this idea of somebody paying you money to make a song is super compelling. It's super interesting and it's sort of this mysterious like fabled creature. You know, everybody has a buddy that's like, oh yeah man, you know, I was in a band and then you know, Mcdonald's had me make a song for them and oh was like $70,000 dude. And you know, we hear these stories and it's just this really like, oh, I want to do that. But what you don't see behind the scenes is exactly what Trevor was just explaining. This idea that you make these songs again and again and again, and it doesn't, most of them don't sell. This is near and dear to my heart because my first experience in a recording studio was in what was essentially like a licensing studio in Columbus.
And it was like a, you know, four or $5 million facility that this guy I, one of my best friend's dads had built and he was a composer and you know, corporations would come in and their art department and creative director would come in and sit in the fancy couch and like watch them operate the board and record the song and they went nuts for it and they made a bunch of money doing it again. It was like a really weird thing to like I would come by all the time and you'd hear like some art director like Yo it's an okay song but could you make it like more campy and they've just usage
really weird adjectives like that sounds about right. Yeah.
And it was crazy cause like you would see nobody had a nicer studio and you would see like the gear and the room and it looked like an aquarium because there was so much glass and it was so thick. But it's interesting because the industry's really changed and businesses like sound stripe if really kind of taken the torch, at least I feel like you guys have taken the torch of, it's a little easier to have a library of songs and to be able to explore how we could go this five or we could go that fiber, ah, that's a little too dark. Or what if we had something that you know was a little more in this genre. It's an interesting thing that there are these businesses out there that are creating a ton of content and our licensing the music to people that want to put it in videos or commercials or what have you. And then Trevor, you guys have must be thousands and thousands of songs on sound stripe and it's nice when I am making a video and I can look through there and find really whatever vibe I'm looking for. And not only that, like I can find a single artist. A lot of times I'll use like three songs from the same artist and a video. How do you guys get all this music? Where do you get it from?
Yeah, so it started with us kind of tapping our friends, like I was talking about earlier, because we knew a lot of people who are extraordinarily talented, but again, their music had no value outside of the video it was in, if it was a pitch that didn't make it or something like that. And we also had friends who were in bands before the bands broke up. They owned the rights to the songs, but no one was doing anything with them. So that was kinda how we got started. We just, you know, put their music on the site and then figured out a payment structure that would work for everybody. And as we kept going, our passion really for, obviously we needed music to supply our users and our customers were number one to us. And we've never been shy about that. And some people may have pause at this at first, but I had truly, and I could go on this for awhile, I feel like that's kind of unfortunately been ingrained in the music community, but we put our customers before our artists and we've fundamentally do that.
Like, and I am pretty confident in saying we're the only business in this industry that does that. And we like our artists know that they're on board with it because if we take care of the people who are buying this music, everyone wins, including our artists. Like we are artists first and foremost. I mean, that was my passion since I was 11 or 12 years old. Our desire is everything but to screw an artist over. But the whole point is if our customer wins, everybody wins. So back to that, you know, we put our customers first and we wanted to figure out a way where we could do that and still make money for everyone. And eventually, you know, it got to a point where we were able to, um, provide stable incomes for, um, for musicians and artists that were doing this. And I'm very proud to say that we've been able to do that and we have some of my favorite producers, artists and writers on staff now. Some that produced some of my favorite albums growing up. Multi-Platinum producers like just very honored that people trusted us with that. And I think it's been a very healthy relationship, but that's really how we started finding music was through friends.
That's awesome man. Well I know everyone listening right now is probably thinking like I could make music as a job. That sounds really cool. So is that something where you guys are looking for more composers?
It's tough because we've gotten so many submissions at this point that we don't necessarily have like an open call right now, but always check sound stripe.com because whenever we're looking and we've kind of maxed out our resources, we always kind of open up the search a little more and we'll put a link at the bottom of the site that you know, something like become an artist or submit your stuff. But Yeah, whenever we do that, it's basically just like, uh, send us your stuff and we'll talk through it type thing.
Gotcha. So it's almost kind of like a publishing deal or something like that where you've got as an artist, like you're a composer, sound like a a quota or something where they're supposed to make a certain number of songs each month.
We have like a couple of different structures that we use, but really they're all centered around the fact that like we want something that provides the artists with a sustainable income and us with a sustainable source of music. And that's really what it's based around.
That's awesome man. I can't think of many people that are musicians or that our audio engineers that aren't fascinated by that, that aren't fascinated by the idea of like, wow, my mom would actually think that's kind of cool. Like I wouldn't be embarrassed about my career choice if I had some sort of like Dior, you know, I make a certain number of songs, but I'm fascinated by sound strape because of the incredibly high quality of the music. And it sounds like you're sponsoring this episode or something cause I'm gushing. That's not, that's not the case. Like well I appreciate it. Yeah, we just, you know, you guys are our friends of the show. Obviously you're the best man and Brian's wedding. So the conversation we're having I think is more of just an extension of like a natural conversation that we were having, you know, as we've gotten to know each other. So I think this might be kind of a good place to segue. You know, one of the things that you've mentioned in the past is that sound stripe is moving a lot of its library to have integration with Spotify and iTunes and all that stuff. Tell me about that. What does that look like for you guys?
Yeah, for sure. So you know, now when we go to upload songs, it's pretty simple. We just basically tried to link them to Spotify and our back end a little bit. And really what that does for us is we're not doing anything with that at the moment to be truthful. But it's the longterm vision there is. You know, we want a lot of the music that south stripe has is on Spotify and we want like we get requested actually by customers all the time. Like, hey listen to this on sound stripe, but it'd be just easier if it was on Spotify. It turns out a good chunk of it is on Spotify. So you know, we obviously like that to me and this, you know, maybe going where you're going with the question, but I think Spotify is like the wild west right now, streaming in particular and it's easy to get nailed to the wall when you start talking about Spotify and streaming royalties and stuff because people just look at the bottom
number on the sheet and it's like, you know, 0.03 cents per stream or whatever it is. You know, it varies. And while that's an easy argument to make, I feel in many ways it's a cop out because it's not a holistic view. And I think even just looking at the macro economics of streaming as compared to physical sales, like for the first time I think and I think it was 2017 I could be off by a year or two there, but streaming past physical sales for the first time and that is not slowing down anytime soon. I think that, you know one of the reasons we want to integrate with Spotify as, because that's where people are going to listen to music and no matter what people's opinions are on it, which again I have some that I am from Irvington about Spotify and streaming, but no matter what people's opinions are, that's where people are listening to music. So we can either, you know, fight and argue over it or figure out a way to make money there.
So this is the reason I had Trevor on the show guys. Trevor is a part owner in sound stripe and as a result he has an interest, an ownership interest in thousands and thousands and thousands of songs that they are putting on Spotify. What I think is so interesting about this conversation with Trevor is typically when you talk to somebody about Spotify, their opinion stems to, my band has two records and they're on Spotify or I've worked with 10 bands and they have records on Spotify and this is what they've said. It's just not a very big picture of Spotify. There's not a whole lot of incentive for a band to really sit down and figure out Spotify, what's working, what's not, who's killing it, who's not. Someone like Trevor on the other hand who is part of this really, really quickly growing company has a really vested interest in understanding Spotify and having a reality focused outlook on Spotify and trying to understand what's actually happening. So man, I think it would be really interesting, Trevor, just what do you think about Spotify?
Yeah, Gosh, let's see. I think the most interesting thing about Spotify really is that it is very much, let's just take a dollar. Okay, so a dollar and physical sales and a dollar in streaming royalties. The difference there is quite substantial and it might not look that way on the surface. Especially because at face value it might look like it takes a lot more to make the Spotify dollar, right because one album you get 10 of those dollars but listening to an album on Spotify you'd have to do that dozens of times to get a dollar. Right, but not quite the case. So what labels have realized, like if you look at uh, I think Warner in Q four of last year profited 300 million cash and I don't think that, obviously that's not all from streaming by any means, but they have a huge portion of the revenue that does come from streaming.
And the deal is, is that instead of looking at, okay it's point whatever cents per stream, look at all these sides. How much is it costing me to make this? How much is it costing me to distribute? How much is it costing me to reproduce it? All of those things are wildly different from physical because a dollar in physical sales, that dollar is split among a bunch of stuff. Obviously you've got rights holders, which you still have with streaming that you have to divvy up. But all of that is net after covering stuff like manufacturing of a CD, every time you sell a CD you got to make another one and sell it. There's no such thing as sharing or used music anymore. When you share it with someone, they're just going to stream it and you get more money from that. There's also this, you know, idea that role t is evergreen.
So for instance instead of 30 years from now you're having to keep a manufacturing plant to produce your 30 years worth of albums. You just had put it in Spotify 30 years ago and it's still generating money as devoted fans listen to it. So it's just a very different way to look at it. But again, I think people get hung up on the actual value of a stream itself. But miss the fact that the barrier to entry for that one stream as wildly different than the barrier to entry for someone to pay $10 for your album and buy it outright.
Totally man for you. Kinda like younger guys, younger girls out there listening to the show that might not remember music when CD was the king. So my sort of entry into recorded music was right sort of at the peak of CD, right at the very end of CD. Really. And so when I was a musician and I was touring and I was trying to sell, you know, make a living selling music, what I would have to do is raise about, I want to say it was like 13 to $1,400 per 1000 cds and most guys, you know, most sort of independence would get a manufactured about a thousand at a time. And it was really stressful because you had to get $1,300 in cashflow to spend on manufacturing and then it took 10 to 14 days to get the CD manufactured and then you had to wait for the shipping. And it was this crazy thing of like, oh shoot, we have a big show in 17 days and we're out of product. And then you'd have to like place an order and I'll like talk to somebody on the phone and figure out shipping. And it was this whole song and dance. And I think like one of the interesting things that you're pitching here is just the ease of having streaming as a system of distribution.
Yup.
Compared to physical that you could come out with a CD and you know, let's say there's two bands. One band comes out with a CD and they're rehabing constantly, they're saving money and then there are occasionally missing a show. They're showing up to a show with no product or they are showing up to a show with not enough product considers. Here's the other thing, like do I have a Subaru station wagon and I would have to fill that thing full of merge to go to the show. And the cds were the worst part cause they weighed a freaking ton. Yup. And so it was like a foot and a half by foot and a half by two and a half feet box of 250 cds that you would slam in the back of your freaking station wagon and hope that they didn't get damaged because if they got wet or you drop them each one of those cds, you were out cash and you paid about, you know, as a buck 20 bucks, 30 per CD. So I love this sort of angle you're looking at of like, yeah, the streaming doesn't seem like it's that much, but there are many other benefits and you don't see people posting about like, oh my gosh, I'm just so glad I don't have to bring cities to the show or anymore.
Well it's also like I think people got hung up on the old model, but the reality is is that the old model is built around a lottery system. Like it was foundationally set up for, this is getting a little Meta here, but I do, I think it's important to note. Are you familiar with Seth Godins at Kimbo podcast?
Oh, absolutely. I'm not caught up, but it is my favorite podcast.
Okay, so great stuff obviously and one of his like between his little Seinfeld baselines in there wanting one of those little ditties, he talked about exit the whole, I think the whole episode may have been about it, but he talks about distribution channels and how distribution influences what's created and it is freaking fascinating because if you look at tons of major industries, think about how back when bookstores were a thing, right? I mean obviously they still are, but very different with Amazon and kindle and all that stuff. So back when it was just local bookstores or whatever, they had a limited amount of shelf space. So the stuff they put up on the shelves is what got sold period. So when they would have a relationship with publishers and stuff like that, then publishers would go look for certain writers or books or whatever to buy and distribute to these bookstores.
The bookstores were saying they need it. So if the bookstore says, yeah, we sell more Scifi than anything, and that's what they hear from all of their bookstore partners, then the publisher is going to sign Scifi riders, right? So that same thing is with record labels. I mean you can extrapolate that over multiple industries, but just like with many other industries, when you start to democratize and level that playing field, what's created has changed drastically. Think about how many genres have been created in the last 10 years. Like all the tons of different types of Edm. And you've got like there's this huge resurgence of retro synth wave. Like no one would have signed that and put it on the radio 20 years ago or 10 years ago or even today if streaming had not become a thing. Right? So I fundamentally think that the democratization of the distribution itself really is a healthy thing. And I think looking at it through that lens is something to one take into account. Like when you're making music, because I think that, I'll say this, if you notice trends and, and they're massive, like for instance the switch from physical to streaming. But the way in which you make and release music doesn't change. You're doing it wrong because it is essentially that is the idea behind the whole adapt or die principle. Like I mean it really is. Yeah.
Oh my gosh. It's for nuggets of wisdom like that that I wanted to have you on the show and that concept that, I mean say that again. What's that quote? So if the channels of distribution change and the way you make music doesn't change, you're doing it wrong.
Yeah, basically I the idea that if the distribution is changing and your methodology for creating or distributing or whatever music is not, then you're behind.
I love that. Well, we talk about on the show all the time, the power of feedback loops and the power of back in the day you would make a record and you would work for like a year, you know you would work and work and work and work and work. This is like seventies eighties nineties and you'd work and work and work and work maybe like a month at the absolute least. And then you would release the record and you would promote the record and it was an all in gamble, gee, I hope her fans like this. And you didn't really have a whole lot to go on other than like, well we played some of these songs live at the concert and uh, it seemed like people liked them even though they never, like when we play new songs at the concert and this idea of a feedback loop is so different because now you can release a song and it can be live that night. You can make a song and that night you can have it out there in the Internet, getting feedback from your customers and you can let that, I would use the word dictate, but at that seems too intense. You let that inform your decision on what sort of art you want to make next.
You nailed it because I'm going to bring some more like startupy buzzwords into here, but okay. Have you ever heard of like an agile framework for working? Yeah. Okay. So the idea behind the counterpart to that is waterfall. And that's basically like if you think of old corporate setup, so where like they'd released the new version of windows once every year or two. What they would do is it wasn't agile. They would plan out this whole build to make the new windows system and then they would spend two years doing it. But by the time you're at the end of that two years, stuff has changed so much that because you weren't iterating on your initial plan for building whatever this was, it looks like it should have been had you released it two years ago, but now it's two years forward and you released what's essentially an old product.
So the idea behind agile is instead of making these long plans and following them through to completion with no changes, agile is a sure, make a roadmap, make uh, you know, this is our year plan to year plan, five year, whatever. But the idea is you stay agile enough to where like it sounds stripe. We work in two week sprints, which basically means we plan out two weeks of work and then at the end of it we look back and we do a review. So we show the whole company the work that was done and then we do a retrospective, which is what worked, what didn't work. And that's talking about like the process we use like well we weren't good at communication on this or we tried a new way of designing before we got to building the product and it didn't work. So we'll do that different the next two weeks.
What if you realize like that's just stuff we realized over the course of a week or two. What if you, you know, never changed any of that. How many problems do you have two years into a project? You know what I mean? So that same thing should be how I believe people release music in a democratized system. So with Spotify for instance, like I think artists get a little too hung up on and rightly so because I think we were kind of like bred into this, but artists get hung up on this idea that like it has to be perfect before I put it out. Right. And so they spent, there's nothing wrong with spending a year on an album, but if that's the only thing you're releasing and it's once a year, I do think that's a problem because you know, look at artists like I think Drake put out like a 30 or 40 song album.
Like that's the kind of stuff like if you're going to do an album, it should be something like that. And otherwise you should be putting out multiple songs a month because agreed attention spans are lower, you've got more competition, you want to keep people interested in your project. Even outside of the attention span thing. Like just because the world is moving so fast, they may just straight up forget about you if you don't. So all of that too. And the other thing is that if it's your baby and you put it out and everyone hates it, you spend a year on it and you didn't collect any money from it because no one liked it. So, you know, again, art is art and it's created for a reason and people like artists because they have a unique perspective. All of that is important. But if you don't iterate on your music the same way a company or a business would iterate on a product, then you're one leaving money on the table and you're setting yourself up for failure and if not that risk.
Well I think this is super interesting for us as audio engineers as well. I really believe that all of us as audio engineers are going to either be a part of this transition towards a more iterative model for musicians or we're going to be laggards were going to be the slow to adopt. And I know for so many of us, especially those of us that are older than 35 that were just like fixated on like but, but, but, but albums and I hear Ya, albums are great, but the power of an artist's releasing a song and getting feedback and letting that adjust how the artists perceives themselves and what type of art they're going to make is massively powerful and yeah, the royalties not great and yes, Spotify as super jacked up, especially with the stuff that's been in the news with them suing songwriters for more rights and stuff. Yeah, that's all terrible. But we've got to keep in mind the flip side of this coin and that is that there are artists who are going to make it over the next couple of years who would have never made it in the old because they never had the benefit of feedback in the old model. Yup.
And the reality is is that maybe some of those, I mean think back to all the artists in the old model. There may be some that just made it because distribution was siloed and a label put them out because that was the only thing you could listen to. Right. So yeah, it's just a different way of looking at it.
Well to me it was a bummer for me when iTunes came out because I was selling cds and it was great. I would go and play a show and then like, you know, some kid will be like,
I like that one song, here's $10
and I'd be like, yes, this is awesome. That's the only good song on the album sucker. And it was like really frustrating when iTunes came out. This is a little bit of music distribution history for you guys because all of a sudden, like over the course of a couple months, you know the iPod started to get popular. So it was like the winter after the iPod started selling like crazy because everyone got one for Christmas. I think it was when the Ipod Nano came out. So it was like a really cheaper version of the iPod that you know was, I don't know, 200 bucks or something like that. And it was such a bummer where like before it was, you know,
I liked your one song
bucks instead it was like, who though? No one song was pretty cool. I'm going to go, we'll spend 99 cents for it tonight if I remember too. And it was like, oh no and then apple is going to take 70% of that and I don't get to make the other the, so it was a bummer but it was also a bummer because it was the worst of the digital era and the worst of the old era. There is no feedback. And while there was less feedback than there is now, and you still had this sort of like weird physical component, you still have to bring cds to shows and it took me a long time to sort of adapt and lean into that. And for, you know, we've, I think we've seen the end of this, but a lot of artists for a long time wouldn't even like let their music on Spotify, you know, Taylor swift was like, you know, wouldn't put her music in apple and stuff like that.
So I think this is a really interesting conversation for us to be aware of for our community to be thinking about. Because the best thing that could happen to us as audio engineers is that we work with an artist and then that artist explodes, right? You know, you work with Xyz band and then all of a sudden xyz bands, world famous, that's a good deal, right? So that's the best thing that could possibly happen. But in order for that to happen, you would have to get the band, work with the band, make the record, and then gamble with months of your time to see if it resonated with the market. The difference now is that in the same period of time, you could work with 12 bands, do a single from each of them, release them all and see which one is going nuts. And that's super interesting to me and this is just even a small piece of why I wanted to have Trevor on the show to talk about this stuff.
As our industry changes, the way that we make music has to change too. We have to become more agile and respond to that feedback because the only people that are going to be winning in the future. I think this is like the only prediction you can you can make with certainty about the music industry is that the people who are winning in the future are the people who respond to feedback loops. So speaking of feedback loops, we had a really interesting conversation around the kitchen island at our airbnb in Yosemite and you told me about low five study beats.
Yes sir.
Low Fi study beats for those of you guys don't know. It's like the picture of the girl, like studying on youtubes recommended videos that they show you every single time you log into youtube. Sometimes there's like a raccoon, it's like a little like Japan animation thing and it's primarily one company making these like really short, obviously low fi sort of like
jazzy hip hop kind of. Yeah,
jazzy hip hop things. So you had a lot of really interesting stuff to say about this company. What does it cool cat media or something like that.
She'll hop and monster cat. Both of them are doing cool stuff.
Awesome. I would love to hear you talk about how they're killing it and how they have hacked the Spotify game.
Well it's interesting because the way Monstercat does business is the way that a mini labels are going now where they're doing single releases, right? So like a lot of the releases Monstercat puts out if you follow them on Spotify, it's like one song or two songs by specific artists. And that goes back to the distribution conversation I was talking about earlier, like changing how you release music with the way it's distributed, you know? And then with chill hop. This is interesting too and I'll, I kind of want to tie, she'll hop into something you said earlier about the iTunes debacle. When you would go to a show, he had one good song on your album or you failed that way and someone would buy it and you'd get 10 bucks essentially for one good song and nine whatever others, you know. Well, what's interesting is chill hop is another example of how the democratization of music and it being more easily accessible has actually produced new revenue.
And I would argue better or more interesting revenue streams then were possible before. So to your point, I'll address this before I get into the nitty gritty with like chill hop's thing, but basically like with iTunes, think back to that situation in particular and think about like, yes, it probably was an initial shock when iTunes came out compared to how you were used to releasing music. But, um, and this is very much the free market fanatic in me, but think about how much that pushed you forward because your option at that point, it was either to make better music for the consumer all throughout instead of one good song on the album or suffer the consequences. Right? And that pushes everybody forward. It's a tough rub because especially I'm in a very competitive industry and there are good businesses out there that do what we do.
And like I would never just say that, you know, like everyone else sucks and we're the best and there are great businesses that do this stuff and they think about this and sleep on it just like we do. You know, they think about it all the time, but that's what makes all of us better. That's what makes us drive forward. That's what makes more consumer friendly business models, all that kind of stuff. So take all that to the chill hot conversation. So what they have done is produced something that historically it would have been possible through them releasing, you know, like compilation albums or doing their own type, you know, kind of like kids bop did or things like that. Like it would have been possible for chill hop to put out this kind of like almost meditative focus music or whatever. But think about this with chill hop, their revenue stream is better than it would have been with physical sales because you listened to it for hours a day over and over and over. And every time you do, they generate money. Instead of you bought the album and you listen to it for thousands of hours and they get $10 out of it.
Oh Man, you're blowing my mind here. So let me see if I can kind of break that down. So for a certain type of music in today's market with Spotify and with today's technology, if you are the type of music that a listener will listen to again and again and again and again and again, you win in this market. If you're the type of music that's like, you know, I'm going to download that record, I'm going to listen to it two or three times and then move on with my life. You do not win. You lose. And that's interesting because you know, we can complain about Spotify royalty all we want and obviously it's terrible, but it is making music better from what you're saying. You can objectively say that music is better because wow, people are listening to more and they're listening to it more times. You know, if I was into the low fi study beats type thing, I'm not going to like walk over to my little CD boombox and have like 10 cds from the same label and just like put them in one after another. That would have never happened. And if I listened to each of those cds a hundred times, I got a lot more than $10 for the value out of that CD that the label didn't capture.
Sure. And that's the thing, it's like I don't know anything about chill hop's model in terms of like how they actually make money from that. But I do know that the way that they put out music is appropriate and really well done. Like hats off to him for the way that Spotify distributes because they started on youtube, I think you mentioned that a minute ago, but before it was just like a youtube thing and there's a role teas there from youtube. Same with Spotify. So like their business model works fantastic with platforms like that. But the income would have been substantially less, most likely with physical sales or it just would have the business model would have had a look quite a bit different.
Yeah, that fascinates me. So there's a book that I love, I want to say it's by Chris Anderson. There's a book called the long tail. And this book is super interesting. It's basically predicting what we're talking about, right? It came out like 15 years ago or something, but the idea of the long tail was that technology is going to enable businesses that wouldn't be profitable 15 years ago to work because they can reach an audience. And one of the examples that Chris Anderson uses in this book is Bollywood movies. So if you are an Indian American living in Columbus, Ohio, you couldn't watch Bollywood movies when they came out 15 or 20 years ago. It wouldn't make sense for a movie theater to have a Bollywood movie because like 15 people would come, they would have lost money on it. But with streaming all the sudden it makes a lot of sense to be pushing Bollywood movies in America because you can make money even though the saturation of people that want to watch those movies isn't that great.
And the idea is long tail is the opposite of short tail. So back in the day we all watched friends, we all watched Seinfeld, we all watched Beverly hills 902 [inaudible] and generally everyone consumed the same media we all had in sync and Brittany Spears and green day's Dukie album and wheezers blue album, we all had all these things that we all listened to and those were short tail. And what technology is doing is it's making it profitable to make really, really, really niche stuff that can build a following and can grow into a powerful force in the industry. And chill. Hop is interesting. So if you guys want to check this out, if you go on Spotify, it's called low fi hip hop beats beats to study slash relaxed slash game too. And in parentheses it says chill hop music. It's got about a million followers. And heres the thing that's interesting that me and Trevor have talked about it a little bit on this as, I don't know if you guys know this, but for you to get a full streaming royalty on Spotify, you need a 32nd play.
Someone needs to play your song for 30 seconds and if they hit skip after that doesn't matter. You get a full royalty. So back to this sort of illustration that we were talking about before, where if someone listens to your CD 100 times 20 years ago, you kind of got ripped off. You provided way more value than what you provided to the kid who listened to it five times. And what's interesting about the low fi hip hop beats is they're making great content. The music's all amazing. It's incredible. I have a hard time working with music in the background because I'm an engineer so I like inherently tune into it and I'm like evaluating the stereo width and the spread and the balance of the mix and like all this stupid nerd stuff with chill hop for some reason it doesn't do that to me.
It just like keeps me rolling as I'm working on stuff. And what's interesting about chill hop is the songs are really short. You know a minute or two in most cases and one you'll listen to chill, hop for hours. It's just compatible with that sort of background music. But also because it's really, really short, they're maximizing their revenue because all they need you to do is get 30 seconds of a stream. So essentially if you wanted to really game Spotify, if you can find a way to make a really long record with 31 second songs on it, you will maximize your revenue.
Yeah, that's very true. It's funny because they to an extent, like they actually, they're aware obviously that people could or would take advantage of that. And they actually, I think it me and you were talking about this, is it
full peck
Volk Beck? Yeah. They put out an album of like, you know, 10 or 12 silent 31 32 seconds songs and just had their fans put it on while they were sleeping and they made like 20 grand from it. But they, you know, Spotify shut them down cause obviously that's not actually listening to music. But it is interesting that concept and it's also like, you know, used to for years pop songs would get shorter and shorter and shorter on the radio because attention spans are getting tighter, you know. Well it's not that that's actually changing anymore. It's that like songs, you know, what may wind up driving songs to get shorter is the role of these themselves. Like, why, you know, if you can make, this is the thing, it's a tough balance because a 31 second song doesn't have enough time to take you through the emotional rollercoaster that a great song does for the most part. Right, right. So if someone however figures out how to do that, if it's possible, I don't know or even do it like chill hop does, you know a minute, minute and a half, two minutes like that may actually be what winds up driving the length of songs down. Yeah.
I had thought about, so like we've talked about this a little bit as well, but as a mastering engineer, a lot of times someone will come to me and say I want track one, two seamlessly float into track too. And then I want to track three to like sort of fade out. And as it fades out, track three fades in. And these are called gapless transitions and they're kind of a pain in the butt to make. And especially because they don't always work on streaming. Sometimes they seem to, and other times they don't. But if you could take like a 10 song record and break it into 31 second chunks with gapless transitions, you conceivably could make an awful lot of money on Spotify because instead of, let's do the math here. So if they're all three minute songs, instead of getting royalties for a 10 song album, you would actually get royalties for do the math here for me, I'm so bad at this. So
are you saying ten three minutes and then however many 30 seconds songs would make that up?
It'd be 90 streams. Yep. You'd get 90 streams for 10 songs if they're broken up into 32nd pockets.
That's very interesting. Does their gapless playback do the whole negative space type thing?
I don't think it does. It's weird because with streaming, honestly I should be more of an expert on this than I am, but with streaming it's weird because there's buffering involved and depending on whatever is going on in the device, the device might not be quite ready for the next song. And like I've had mixed experiences. There'll be some records I listened to on some streaming services are, I'm like, okay, sweet, my pink Floyd record did playback gapless today, but then tomorrow it's not going to, if I listened to the same record again. So it's kind of all over the place. And again, I should know more about this than I do as a mastering engineer. I'm kind of embarrassed by that, but, well sorry I put you, you're fine. We get more downloads if I'm honest. So
I love it. There you go. I love it. Ethics.
But yeah, I mean somebody is going to game the system even more than it's currently being gamed and they're going to find a way to massively increase the money they're making on streaming. Because here's the thing, if you get paid for a full royalty at 30 seconds on Spotify and your song is three minutes long, you just gave Spotify two minutes and 30 seconds of free content and that stings more so I think than the low royalty.
That's interesting.
It's not that they don't pay enough, it's that a huge percentage of what you give them ends up being free. And I wouldn't be surprised if Spotify at some point switches their algorithm and pays out royalties by the second. And if that happened all the sudden people are going to be like, like it's going to be queen all over again with like huge songs. So it's interesting because that could change overnight. You know, we could wake up tomorrow morning and be like, you know, get an email from Spotify or you know, we read some buzzfeed article and it's like, oh well the game has changed.
To your point there is it actually. So let's take a look at like the value of a stream. Is the stream itself actually priced too low?
Do you think that yeah, I mean I definitely wouldn't go on a podcast and say that if I thought it was appropriately priced. Like I think it's, it's way too low.
See that's interesting cause I would disagree there. Oh
please do. I love, I love when people have different opinions. So tell me why you think it's appropriately priced.
Same. I love it. And again, I don't know, I can't say that that's the exact amount it should be, but I don't think it's grossly under priced. And my opinion could change on that. It's not because, you know, I'm like corporate over everything. That's not what I mean. Uh, the, the idea for me is that you've got that stream could come from free users, it could come from people who are paying, it could come from people who would not have bought your album otherwise. And it's like we talked about every single stream brings in money opposed to you know, buying the album one time and it just being an all in compassing licensed to listen to the music essentially. Yeah. So to me it's that it is fundamentally a different thing to play and stream a song than it is to purchase a license to listen to an album, which is what you do when you buy a CD. Yeah. Anyway, I just, I thought that was interesting to note cause like I love
that too. I love talking about like the different perspectives on that. Yeah. And I think what's interesting, I think like the weird thing here that you have to bring this back to, not to like take a really heavy like altruistic like angle here, but regardless of whether the streamings priced appropriately or not, is it better for us? Is it better for society? Is it better for music? What do you think Chris? I think probably, I think it probably is, and again, like to your point like we're both extremely pro free market, you know Weirdo. Yup. I'm with people. And so from my standpoint of like it's a completely free market and I hope I don't get crucified too bad for this. But like when people complain about the Spotify royalty, I'm like, dude, didn't you choose to put your music on your music on it?
Yeah. Like that was your choice. If you're not happy with the Spotify pays, take it off. Sure. And you know, the devil's advocate, there's obviously like, well I have to cause that's the only distribution channel where I can make money now and they broke it, blah blah blah. Like I get that for sure. But I am very much in your camp on that. Yeah. And I think what's interesting about that is there's an adapter diamond tality that we as audio engineer's our audiences, audio engineers, this is not the thing that we're the best at. We don't adapt quickly and we whine and cry and stomp our feet when the industry changes in a way that we don't like. And I think what's interesting about Spotify is it is this sort of like cattle prod to get us to adapt, to get us to change and to grow.
And that's I think an inherently good thing. So back to sort of like my, you know, lame little music career. When I was in my twenties when I was playing sort of, my model was I was trying to build sort of super fans. So I would go to these like summer camps and I would like stay at the summer camp and play for these kids. It was a young life camp and it was great because kids would really get into the my songs and they would be really intense fans. But in a situation like that you don't win in Spotify because you only went in Spotify. If you have a lot of listeners, it's not friendly to you unless you have a humongous number of monthly streams. You could probably even say like I was cheating as a musician because I was trying to build a relationship with these kids and have my music sort of be the soundtrack to this experience that they had.
I'm like, I know guys that sounds lame as I explained it, but that sort of experience, it doesn't really work as far as like a song going viral on Spotify or something like that. You need something that's more accessible and it's more shareable and it's more compatible with like getting on playlists and stuff like that and so it's weird. There are certain niches that are getting slaughtered on Spotify and there are other niches and like this chill hop is such a perfect example where like what kind of a frequent, you have had to be in like 2004 [inaudible] into Whoa, these like low fi or hip hop story beats like people would be like, you're a weird man. Like that's, that's so strange. And it's interesting that there are certain niches that are, I guess it's like a wave, you know, like it's a change in the industry and like any wave in the ocean, you know, if there's a bunch of surfers out there trying to ride it, some are going to get on that wave and they're going to ride the heck out of it and it's going to be glorious and others are going to get smashed into the coral reef.
And our job as music entrepreneurs, as audio entrepreneurs is to figure out how to ride that wave instead of being like, oh, Whoa, oh, oh, oh so a woman, Rudy, and the whole like making excuses thing doesn't work. Like we have to figure out how do we ride this wave and no matter what you think about streaming or where you fall on the spectrum with your opinion on it, you have to recognize that it's dictating everything. In our industry. If you're struggling to make enough money as an audio engineer, it's because musicians on some level, the musicians are struggling to make a living as musicians because they're who typically pay your paycheck, you know, that are paying to record with you. So them not being able to ride that wave. Inherently apps with us as audio engineers, as audio engineer's as producers, as mastering engineers, mixing engineers, you name it. Part of our role is to participate in the feedback loop with the artists for some of us, much more than others. You know, for producers like you are the feedback loop. You're like a little mini, my opinion represents all of society and I will share it with you in order to craft great songs that will sell it to people. You know? That's really what a producer was back in the day was somebody who knew what people would pay for and that can help make a record that would resonate in the marketplace.
I was thinking as you were saying some of that, like there's three things I noticed in what you just said. One being you know how 2004 like jazzy hip hop, how that would definitely wouldn't have been a thing, but then now it's like a revenue generating awesome it cool little niche or whatever. The cool thing to analyze there is what changed and the answer's distribution and that's what we were talking about earlier. And then the second thing was kind of addressing the excuses you were talking about earlier like and to anyone listening like do not mishear me. They're always like room for improvement. There's room for scrutiny. That's the beautiful thing about a free market. Like all that stuff is important. But on a personal level, like if you take anything away from that, it should be that no matter what your issues or qualms or whatever, whether they're justified or not, you should still be working to adapt because living in a victim mentality, I mean, you don't gain anything from that.
You don't, you're able to Moen, but you don't actually get anything from that. And again, that's not to say you don't have a reason to. Like if you, that's why it's called a victim. There are people that actually have a reason to be a victim, right? But there are also people who have more of a reason than anyone else to be a victim who have come out on top of it. And people from, you know, whether they never had an opportunity in the world and still wound up being millionaires or whatever. So that's something to consider. And then the third piece was, you know, you mentioned kind of how musicians, you know, they may not be making as much money and that influences everything else. What we're not talking about with the Spotify conversation is the entertainment ecosystem as a whole because it's not just that like, you know, this thing affected musicians like the Spotify rotate and blah blah blah.
What about Netflix? More people are staying in and going out to shows, then going out to shows. Even Netflix has said their biggest competitors fortnight, so like everyone is fighting and entertainment. It's not just music being its own bubble like you're facing all these other things, but I think the problem is is because it was built on a lottery system and the victim mentality. I feel like a little bit has been baked into music somewhat, which breaks my heart because it's like I'm a creative and I don't want that to be the case. I think because of that though, it's easy to latch onto one thing and say this is the problem, but miss the forest for the trees,
I think you're totally right. I love your angle about like I just had this moment of like a zoomed out and saw the bigger picture for a moment and that was awesome. And the cow. Oh my gosh. It is like the whole fortnight thing versus the Netflix thing versus live shows or whatever. Yeah, yeah. Live shows like all of these things interact and I definitely have been in that position where I'm like, just the other night was like, well I could stay in with my wife and watch broad city my favorite show or I could go out to the show with my friend and it's awesome to stay in and watch to binge watch awesome shows, especially comedy ones. And that definitely affects like who's going to shows how much they're making it shows and it is this whole giant ball of wax that everything is affecting everything else. It's not just, well it's just a Spotify or a rural two votes. The probe and the food, just fix that. Everybody would be happy again. No, it's so much deeper than that.
It's also very easy to like, I mean we're humans, like even stuff I've said, I know for a fact that like, you know, I've just like with everybody else, I've got my own biases, my own tunnel vision on certain things. But you know, the more you can kind of just like with, you know, trying to train yourself not to be a victim to victim mentality. There's also trying to train yourself to embrace that whole adapt piece and really take a step back and say, yes, this may be a problem or yes, I feel like this is a problem or no, I was wrong. That's not a problem. Being able to step back and do that and say, you know, even if that is the case, okay I'm going to supplement it with this. Or you know, looking at like the thing I mentioned earlier, like I know for a fact that festivals are struggling because of Netflix, because think about all the introverts in the world who, the only way they got to see their favorite bands was to go to festivals before. Well now you can see concerts on Netflix and stuff and that's just going to get more and more. So, yeah, like I said, it's, you can go down that rabbit hole as far as you want, but it is interesting to think about entertainment holistically instead of just laser focusing on these things that can really be red herrings to what's actually going on.
Gosh, I love it when you use big words.
Oh my gosh.
Yeah, it's true. I'm even thinking now about like comedy specials, you know like that's a whole industry that's tying into this as well. It's like, like I've never been to a comedy club, but I watch comedy specials all the time and I wouldn't know who a ton of comedians are if it wasn't for like the Netflix comedy special,
so laser in on that. There's two ways to look at this and I hope people can see the difference here. One is, wow, that's killing comedy clubs because now everyone's just watching whatever. Or these people are generating money from people who wouldn't have gone to a comedy club before. Yup. Again, it's just a different perspective on like, and maybe that's not the case. Maybe it is killing comedy clubs. Okay, well then how do we make money doing it through a platform like Netflix and it's just trying to think through like this is the reality. We can complain about it all we want and maybe there is a better way and if there is do it and if not, figure out a way to capitalize on what's in front of you.
Yeah, I freaking love this and I think what's so interesting and I want to pound home for you guys is the problems we're talking about this victim mentality. This we're living in a time of extremely fast change. You know what? You know what sort of problem that is. That is a creative problem. That's a problem that can only be solved by creativity and gosh darn it, we're in the music industry. Creativity is the currency by which we live. Oh baby, preach. So all of these issues are going to be solved by people that are creative. People that don't fix it in the past and don't fix it on what you would call it, quote unquote sacred cow and that are able to get past this stuff and think outside the box. The people that struggle with that and I do. I think we all do to some degree.
I know I definitely do this sort of like, oh, used to be better. Like that whole mentality. I love what you're saying Ciara. It doesn't help. It doesn't get you anything but like moaning and it's interesting to consider the people who are going to be really successful in the music industry moving forward are the people that are going to be the most willing to adapt and to change and to say, you know what, this sucks but because this sucks. It also means there's an opportunity and this is going to be so cheesy and like there's this idea of like when there is change there's an opportunity to win.
Hmm. That is so true.
Yeah. You've got all these old gatekeepers that are fat and sitting on there, you know, a pile of money who don't want to change, who aren't interested in, and then you have all these young millennials who have known nothing but chain since the day they were born who are going to come in and be like, the way that we're doing. This is stupid. I have a new idea of how to do this and case in point with freaking sound stripe, it's different. It's new and that's why it's working. You know, you guys looked at it and said, Oh, you know what? $39 a song. If you in a license, a song, it's stupid. What if we had a subscription and then it, you know, for someone like me that was really appealing after we had Travis on the show, like I pretty much went on immediately bought a subscription because it was like this. Oh Wow. Like for me, if I'm going to make a youtube video, I can't drop 120 bucks in licensing to get three songs on it and I can't just use those same three songs on every video. And so you guys served a part of the market that wasn't being served, that wanted to participate in this whole micro sync thing and now suddenly Ken and you guys are monetizing the crap out of those people.
Well it's also like we always say to our employees in particular, but there's three of us that founded it. Me, Mike and Travis and like we're not the kind of guys who are going to come down from the top of a mountain like Steve Jobs or Elon Musk with stone tablets that tell us what the feature is going to be. You know. But I think one thing we do do a decent job of is keeping our pulse on like where are things headed? And you know, we kinda got lucky with the timing of this video market up surgeons and we got a little lucky there but are very lucky. Really. Like because it was booming quicker than we thought it was. But at the same time, we were just willing to change. We're willing to like, okay. Again, there was actually two years before I met Mike and Travis where they tried out different business models and all of them just kind of bombed until they landed on the idea for a subscription.
And I mean, I remember they met with publishers who we vetted the idea through multiple ones and there were, we got like, this is the dumbest idea. No one's ever gonna pay whatever per month for this. And it's the same people who want to be involved in it now. And that's not, again, it wasn't a rocket science thing. It was just an obvious next step because it was easy to see that consumers were missing this. And instead of complaining about the fact that sync licenses were going down, we just took it down even further and found a way to make it a sustainable model.
That's freaking awesome. So take homes for people listening as you're listening to a podcast, that's a business podcast for the audio industry. If you're not aware that massive changes happening in all parts of our industry. Streamings dramatically changing streamings like music sales are up this year for the first time in a long time. Um, there are technology changes. You know when I got into the mastering business there was no such thing as lander and you know, that's interesting. It's not very good but it probably will be someday. And there are all these technology changes that are happening that are us just about everybody I know that's recording music is using, you know, some sort of like universal audio Apollo twin or something like that. These devices that can do pre amp modeling, that wasn't a thing 10 years ago, but it's a huge portion of the Internet back in the day. Everybody use pro tools. Pro Tools is like dwindling in popularity, deal with it, stop whining. It's true, it's dwindling and popularity.
Well and think about the UAE thing, like are they the bad guys because they're doing this preamp modeling and putting all these preamp people out of business or is that a better way to do it? And we're just headed that direction now.
Well, and it's interesting you raise a good example because UAA is bread and butter was hardware, right? It was like, you know, by this rack mount to preamp and it sounds freaking awesome. And like that was like, what I kind of came up on is an audio engineer. Was that six 10 pre. I just freaking was obsessed with it and now they have eaten their own lunch by coming out with an emulation of the very same thing. And it reminds me of, there's a story in the Steve Jobs biography that came out, the Walter Isaacson book, you know, couple of years ago, and there's this amazing story about Steve Jobs talking to his team about the iPod before the iPhone came out and he came into a meeting one day and was like, Hey, I know we're killing it on this iPod thing. And it's doing really, really, really, really well.
And it's like quickly becoming the best part of our business. It's definitely the fastest growing. However, somebody is going to take this technology and they're going to put it in his cell phone and when they do, we're going to stop selling iPods. Nobody's going to want to buy an iPod when you could just buy a cell phone with an iPod already built into it. And so Steve Jobs said, we need to eat our own lunch rather than have somebody else eat our lunch man. So he cannibalized his own business to come out with a new product line and man, the emotional maturity to like look that in the eyes and see that reality was what it was instead of just wanting to bury your head in the sand is fascinating. And I think it's that spirit that I think we need his audio engineers to say, hey, the world's changing.
The industry's changing. We need to take advantage of these feedback loops. It's opportunity to learn faster from the marketplace and let that inform how we do business and how we create music. And let's call a spade a spade, or even if we create music, there are all these opportunities opening up because of technology. What you're listening to one of those opportunities right now, podcasting, podcasting is having a freaking moment right now. It's exploding and as it continues to explode and you see Spotify buying gimlet and Arrow, two of the largest, let's call them podcast labels, their podcast networks, that starts to get interesting where all the sudden this different component of audio is out there doing other stuff and your skills as an audio engineer, Mr audio engineer listener, are valuable in more areas than you think they are. And I think it's important to just kind of take some time and consider that and to just practice embracing reality and having those tough thoughts about what is the future, are my skills becoming more or less valuable and are they be coming more or less valuable in different industries or different pockets of my industries are.
You know, we had that interview with Austin Hall a couple of months ago. It's one of our most popular episodes ever. Austin Hall made his genre jump. He went from like heavy music to pop music and he's crushing it. What are these jumps that you can do to get on top of this wave of change that you can ride that to success rather than just to be like, you know what, I'm just going to stick with my, uh, analog console and my aide debts and you know, bit I'm just going to do the same thing again. I'm gonna keep my head down. And I think there's a temptation to do that. And just to work crazy hours to not embrace the fact that change is happening and so that you don't feel bad about yourself because at least at the end of the day you can say, well, I've been working harder than anybody else and that's not a healthy outlook. And I don't think that breeds success in the longterm.
Wow. Well, you know, to that same point, we have a list of 10 core values. It sounds stripe and one of my favorites is facing harsh realities with optimism. And it plays into what you were saying a minute ago. I think this is also kind of another add on to the Steve jobs piece. Another business that famously cannibalize themselves was Netflix. So when they were getting started, they were a DVD rental business, which is still dvd.com and they knew that, feel free to research this and correct me, but I'm pretty sure either when they started or shortly after they had the idea that like this is going to go to streaming at some point. But I do know that once they had that idea, they watched the market, kept an eye on it, and then as soon as youtube came out they said, okay, the tech is ready, we're going to move.
So as soon as youtube started blowing up, they took that opportunity to literally kill their only vertical, which was DVD sales. And they started up streaming and slowly over time it just ate and gobbled up their DVD business, which is still a thing and has its own employees and everything. But it's very tiny compared to Netflix. But what they did, and what I think is interesting, we've talked a lot about adapt or die. And I think something people can take away from this as well, is preparation is equally as important. So if they kept an eye on the market knowing they were going to adapt, but waited for the right time and were prepared when it happened.
The Netflix thing, it hits home with me because I was obsessed with streaming and then like 2006 I would like build media computers and do anything I could. And it was frustrating because I'm a Mac and Netflix launched via windows first. Right. And so I had to kind of like wait around. And so to this point, like we've talked about denying reality and refusing to accept, you know, what actually is happening and how change is happening. I don't know if you guys know blockbuster had an opportunity to buy Netflix for $50 million.
Oh that's this. Cause they're worth like, well I don't fifth 20 billion or so. Let me go over that real quick. Yeah, it's way up there.
I can't see that their stock price says it's a lot.
Well to put it in perspective, they're spending 13 billion just on original content. Pretty absurd. And it, yeah, it looks like they're worth over 100 billion, I think.
Yeah, that sounds about right to me. So yeah, like thing about that. So blockbuster had the chance to buy Netflix for 50 million, which 50 million. It sounds like a lot of money. Netflix has 50 million in like their couch cushions right now. It's nothing. And instead of buying them, the blockbuster CEO is like, Nah, whatever. There's one blockbuster store left. There's one blockbuster stuck its head in the sand and refuse to accept the change was coming and blew it. I think that there's a huge, you know, we've kind of got to kind of epic business stories to apply to our industry. We've got, you know, Netflix cannibalizing its own market. Additionally, we've got Steve jobs and apple cannibalizing their own killer product. And then on the other hand you've got blockbuster sticking their head in the sand. Another fascinating story is the year that Instagram sold to Facebook, Instagram had 18 employees. They sold to Facebook for $1 billion and Kodak went bankrupt and the same year, like the most epic, most successful photography business of all time freaking tanked at the same time that a crappy little startup with a fricking cell phone camera app sold for $1 billion and the same year and like it's wild. And I want to understand that psychology of like, why are we as humans stubborn? Yeah. How does that play into adaptation? How does that play into like, this helps me survive as a caveman because I can deny reality. It doesn't make any sense.
It's just something to consider because like it's going to look different in every industry and with every problem that comes up in an industry or with every new innovation or distribution channel or whatever. But with your audience in particular, I think the important thing is to, it's fine to have opinions again and but face those harsh realities with optimism, whatever they may be. You know, it may have nothing to do with Spotify, but maybe it's someone local in your area who's charging way less and everybody's going to them and it's just eating you up. Like there's always going to be things you have to do to adapt and it's, you know, looking at the harsh reality of the opposite of adapt as die. How do you prepare for that and how do you overcome that natural human inclination to say, I'm going to sit on my laurels because reasons or how do you figure out how to overcome that? And I think like there's not a golden ticket for that. Like again, even though I've sit here and harp on this, I struggled with that many times too because like, like with sound stripe, I love the way we do business. I think the model's great and stuff, but there could always be someone to do it better. I just hope that we're the people that do that and I plan on being that whenever the next model comes along,
man that's freaking awesome. I think that's a really great place for us to wrap up in partying. Do you have a funny story about our beloved Brian Hood that you could share with our audience that would embarrass him?
Yeah, I've got plenty. Trust me, but probably one of my favorites was there might even be a picture somewhere on his Instagram. You probably have to dig back a bit, but where we a dressed as Dallas cowboys cheerleaders for her Halloween a couple of years ago and you'll see Brian Harry in all his glory in a two piece Dallas Cowboys Bikini with me. It was great.
Oh man, that's amazing. That's the most aggressive of all cheerleader costumes that you could have adorned.
Oh, it's next level. It was discussing enough that people wanted to take pictures.
I'm looking through right now. I see a picture of you guys and a snake.
Okay. That happened. Yeah. We got wrapped in a python.
That sounds terrifying. It was something, oh wait, wait, wait. I found a video.
Oh, that one's, that one's one where we're just being sassy. Yeah. We had, we did have the outfits on.
Unbelievable. I frigging love it. Trevor. Thank you so much for coming on, man. Like, honestly, we had such a fun time at Brian's Bachelor party going out to Yosemite, which was just like one of the most amazing trips in my life. That was mind blowing. I'm still like buzzing from it and then we get to hang out at Brian's wedding. Yeah man. Like our whole kind of crew. Frikking miss you guys,
man. Miss you too. Thanks again for having me on this man. I love you. I love your brain. I love Brian Obviously, and I love what you guys do with this podcast. So honored you invited me on. I'm going to say it. I love you too, man. Huh?
You didn't die in a mountain in a six feet of snow.
Me Too. It was a, it was TBD for a minute there. It sure was when you guys kept going
going, I was like, oh boy.
Okay,
I'm glad I'm a week and half to turn.
Choices were made and we adapted by turning around.
There you go. There you go. Well, Trevor, thanks for coming on the show. I guess the last thing, is there any ask that you would have of our audience?
My biggest ask would be, and I think this goes for any industry and this is part of my free market side, but leave your industry better than when you started in it. I love that. It makes me feel warm and fuzzy. I like that it's less of an ask in more of like a call to action, but I think it's important and I think that that is what drives innovation and new channels of distribution and what makes industries better. That's awesome. Amazing.
Well, I
hope you guys enjoyed this episode. I know I freaking shirt yet. As you guys can tell, we will see you guys in the next one. Hopefully Brian
will be back. Brian is on his honeymoon kind of until further notice, which is amazing. They bought a one way ticket to Europe. He may or may not come up for air with a microphone to record next week's podcast, so stay tuned for that. If you've been listening to the podcast and thinking, man, I wish I could get some one on one help with this business stuff. I have been taken on just a couple people as one on one coaching clients. It was something I just wanted to kind of dabble with and it turns out it's like my most favorite thing I do each week. It's Super Fun. So if you would like one on one business coaching to help apply some of the stuff you're learning in the podcast, checkout Chris Graham, mastering.com/coaching to fill out an application. I would love to hear from you and one last thing before you guys go.
This is a really important piece of the podcast. We need a favor from you so that we can help you more. We have a survey that we have put together to help us get to know who you are, why you listen to the podcast, what we're doing well, what we could be doing better, all those things and you can reach it at the six figure homes, studio.com/survey or six F h s.com/survey it's really easy. It's really short. It's going to help us get to know who you are, how we can serve you better. What we can improve all those things. So please check it out. It is absolutely, I mean this from the bottom of my heart. The biggest thing you can do to help this podcast get better, to help us get you better information and hopefully to help us get guests who can blow our minds with awesome wisdom, bombs of knowledge and stuff. So check it out. Six [inaudible] dot com slash survey like I said, this is a big deal. This survey can really help us take it to the next level and apparently it's a normal thing to do on podcasts like this and is super duper helpful. So check it out. Six figure home studio.com/survey thank you so much, guys. Have a great week.