GD Worldwide is an online resource for independent bands to help establish an internet presence and manage the distribution of their material. It also allows bands to create a ‘backstage area’ via its Usync tool.
We caught up with UK MD Mark Clark to discuss plans and progress to date…
When, how and why was the company formed?
The company is called GD Worldwide, and was formed in 2001 by the Australian band Gabriel’s Day – a touring, working band. They’re relatively small in the global scale of artists, but in Australia have got a core following and a sustainable fan base.
The music business in Australia has, to an extent, been overlooked by the big record labels, at least relative to other markets, so it has spawned more of an independent, self-managed environment. The artists have much more of a sense of community about them.
So the idea behind GD Worldwide was to take the experiences of Gabriel’s Day and give other artists the tools they need to create self-sustaining careers outside of the traditional, major label system. It gives them an alternative route to market – they don’t have to go through the existing model.
In that model, the creative group behind a band have to go through a series of gatekeepers in order to reach their audience – the distribution, the rights organisations, the retailers and so on.
There’s a whole load of people that get in between the artist and the audience and are taking meat off the table. Those people aren’t really adding a tremendous amount of value – they are normally taking it away – so the artists find it difficult to reach their audience in a sustainable way.
The other side of it is that the gatekeeper model only represents what we estimate to be 3% of the total music marketplace. It’s the short tail and the market is set up to create and feed that, rather like the Hollywood star model. There is the other 97% of the market – the long tail, and we are a company set up to operate there. We put the artist at the centre of things and reorientate the resources around them.
The other thing is that it’s no secret that record sales are declining, and while the music is predicting that there is huge growth to be had in the future, nobody seems to know how to get their hands on it.
In Myspace, there are up to 3m artists but very few have worked out how to monetise their presence or commercialise the interest they have created.
We think of our Usync product as the next step on from Myspace, where an artist can interact, manage and learn from their audiences, as well as commercialising them.
Bands need a Myspace profile – it’s a great way to attract interest – but once you have brought people into your space, how many of those are true fans? You want to take the 20% of those that are, and bring them into the backstage area we create for you, where they get treated to exclusive content and so on.
In any business, you segment your high value customers and you treat them accordingly, but in the music business that doesn’t really seem to happen at the moment.
In terms of visibility, we are looking to build this as a strategic business and we know we are not for everyone. We are in that long tail and finding those people is going to be important. We are looking for other alternative communities. Our marketing will take a kind of grassroots approach, in the venues themselves.
How do you earn your money?
We don’t want to be in the business of horse-trading an artist’s audience as that’s the most valuable thing the artist has, so we create an audience community but don’t hit them with advertising or sponsorship.
We take a 20% cut of every transaction that happens in the Usync channel – which is a recognition that we give the artist as much money back as we can, so they can decide how to reinvest it.
We don’t ask for exclusive rights deals or touch their copyright and don’t ask for a share of future earnings, and don’t ask for a cut of sales outside of Usync. They can also set the prices they want to. If they want to give their material away for free, that’s fine by us.
How much have you generated in sales so far?
I don’t have specific figures I can share at the moment, but the situation we are at as an organisation is that we have around 30 artists that are either active or building their backstage areas with us.
We’ve only just enabled people to come to the site remotely and sign up, and we’re signing up around two or three people a day at the moment. And we haven’t really started any heavy promotion of that yet. We’ve started to work with companies like Sonic Bids [which allows musicians to produce electronic press kits] to promote ourselves to the artists in their database.
But we’re also not overly aggressive in terms of acquisition – we don’t want the 3m Myspace artists, we want the hardworking, independently-minded artists who want to put the effort in to make it work.
What’s your position on DRM?
We use MP3. Everyone’s started to talk about it but we’ve heard from various people over the last few months that DRM is dead, and that consumers are starting to vote with their feet. DRM has definitely run its course and I don’t think it has a future. There will be much more sophisticated non-DRM models that will emerge in the future.
How can bands get access to financing outside of the label system?
We are looking at different tools that we can use to support artists from a financial perspective.
We feel that copyright needs to be supplemented by some other device or right, and we are looking at ways we can bring those tools. We have looked at Creative Commons and it is interesting, but it is focused on bringing flexibility to current copyright law. We feel that there is another step we could take that is completely outside of copyright, and we are talking with some top entertainment lawyers here in the UK and in the US to help us develop that, and we will probably bring that to market in around a year’s time.
In terms of financing, for a small band, getting money together is difficult. So we are working on how to solve that problem. We are thinking that in an artist community, other artists may be willing to put up some money to help other artists, maybe in the form of a levy on some of the transactions.
How can a band use the site as a marketing tool?
The fact is that 45% of new music is discovered through personal recommendation – word of mouth. It isn’t about watching TV ads or looking at who’s bought the front window of HMV this week. If you look at the online communities and sites like last.fm and Pandora, there is a lot to be said for recommendation as a means of discovery.
What we’ve done on the site is to help you develop your fan base. There are tools to allow you to share tracks and you can give fans rewards for doing so. I think it’s a far smarter way of marketing artists and creating that buzz.
Very often, marketing money is spent against things that are certain. With a new album, people will say ‘let’s do a huge advertising splurge’ across the UK but noone will get fired as they know that album will be successful. They very rarely use those tools unless the artist has already become a success and they want to sustain that success.
Why have you gone down the route of e-commerce rather than ad-supported content?
In some ways, you need to have an integrity in the relationship between the artist and audience, but at a certain stage an artist may say that he or she is prepared to work with a brand or brand owner if I think they can add value to my community.
For example, if a brand does want to sponsor an artist, he or she can talk to the audience and ask what they think. They have much more commercial control over those relationships.
For us, we haven’t ruled out the advertising route but we would never do it exclusively inside the artists’ backstage areas. Where we might do it is in the Usync community itself – if a last.fm or Pandora wanted to create a Usync radio with Usync artists, we may look at a sponsor to bring that to market.