Indie music discovery service OurStage decided to fill me in on how well they’re doing as a startup in the difficult online music business, and I was quite amazed to see how much they’ve progressed over the years. On a financial level, the company has fantastic prospects; they expect to hit profitability sometime next year if all goes well. That should sound like music to the ears of their investors: OurStage raised a healthy $17 million in Series A when they started out in 2007 and went on to raise an additional $3 million in Series B earlier this year.
OurStage says it intends to double the amount of financing for the Series B round, which would bring the total investment put into the company to $23 million by the end of 2009.
Since launching publicly back in April 2007 the company has been steadily attracting users to join its service, which enables people to discover new independent artists, rank and share music with others and communicate directly with upcoming singer/songwriters and bands. Thanks to viral growth in combination with dozens of partnerships with music festivals, radio networks and media companies like AOL/WinAmp, OurStage is currently nearing 1 million registered users. The company has also managed to sway 95,000 artists into joining the platform, and in combination with the strong user base they currently receive about 3 million unique visitors on the site every month.
So how do they monetize the service? By focusing on three good old revenue streams that seem to work well for them: sponsoring, advertising and data services. The latter I think is interesting: OurStage is beta testing a service called TRAViS (shorts for Track Validation Services) that is currently being trialled by divisions of four major record labels and will be publicly launched in Q4 2009, and expects to add some more services targeted at industry professionals soon.
Somehow OurStage has also found a way to get close to running a cash-flow positive business with classic advertising (powered by ad platforms like MTV Tribe, AOL’s Platform A and IndieClick) and sponsorships from major corporations like MTV2, JetBlue, Radio One as well as notable artists like Bow Wow, Busta Rhymes and John Legend. According to the company, ad revenues alone have grown tenfold year-over-year compared to the same period in 2008.
Not enough to impress you? Maybe the startup’s board of directors will convince you the company is onto something great here: it includes a former CMO of Yahoo!, David Moore (founder and Chairman of 24/7 RealMedia), the founder and CTO of Maven Networks, the former Chairman and CEO of Interpublic and since last month, former Chairman and CEO of Sony Music Don Ienner.
Refreshing to hear this type of update from an Internet startup these days.
I’ve always loved them. Great service.
Not a bad service, however, not a fan of the design.
”So how do they monetize the service? By focusing on three good old revenue streams that seem to work well for them: sponsoring, advertising and data services.”
Wonderful. Another music website utilizing old revenue streams. Ask Myspace how that’s working out for them…
Have you guys checked out a website called Mybandstock.com? The website has an actual purpose for artists, and its not just another social network. Artists need funding for recording albums, and most of the funds can be raised from their fans through a pre-sale of the album, or other exclusive artists services.
One artist on the site said if you bought 100 shares ($100) that they would write a song about you!
I’m more impressed with their ability to raise $23M than what they do. I’m curious how much cash reserve they have, their allocations and how they determine profitability.
Love the name–it’s literally a platform for people who need one!
Previously, I have written positively about OurStage on Music Think Tank (I still like the effort). However, I have come to believe that consumers as a crowd can’t ‘make’ hits. Falling in love with music is a complex imprinting process and most music consumers would (sadly) just rather have songs fed to them (as in FM radio). It’s one thing to use crowds to pluck out decent songs (I’m skeptical of this also), it’s an entirely different challenge to popularize a song afterward. I would love to see a list of songs that were crowd-picked on sites like OurStage (and with no label support whatsoever) that sold more than 10,000 downloads.
the hits mentality is the problem…an artist doesn’t need a hit to be successful, many don’t realize that.
How much the users will be benefited by this venture?
Just another group of jaded industry guys trying to throw money at something for a corporate write off. The name and branding are pathetic and amateur, and it’s a joke that these puppets actually think partnering with all the other ahole corporations (that don’t give a crap about creative expression) to promote another corporate machine to force feeds music they control down the throats of a ‘passive music interest’ consumer profile. It sure isn’t worth $23M. Dumb. The process is completely unorganic and lacks soul- the two things that are essential to a true independent movement.
Here’s a company that doesn’t suck the corporate popsicle, if you know what I mean- http://www.101d.com Just read their mantra at the bottom of the page. Pure organic, anti system and real as hell. It’s just a matter of time before companies like this invert the music and film industry.
It impresses me
why i can’t reply my comments ?
For the love of god, that’s the worst design I’ve ever seen. How are they spending all that money? Come on, they’ve been spending almost $1m a month during the last two years.
Because their revenu models are those that don’t work anymore. Pleanty other sites depending on those revenue models have long-gone.
A great idea and execution!
I love what they did for the music industry. They let you vote for music by choosing which of two songs is better, thus creating a user-generated chart.
A funny song on there, My iPod Killed My Girlfriend.
http://www.ours...d-my-girlfriend
That algorythm concept completely SUCKS. Is not 100% democratic but rather an application that allows shitty music to win some of those contests.
If the voting system was actually democratic and allowing great talented artists to earn their win I wouldn’t be so against Ourstage. Although the design makes it difficult to navigate too.
What ever happened to the VC backed Music Nation?
If I had a nickel for every time I’d heard that a startup would be “profitable sometime next year”, I’d have a good start on a nickel mine.
Many of those startups were companies I actually worked for!
Based on what you said Robin, did they get the $3 Million earlier, or are they still trying to close the series B and have started looking for a larger round?
I’m a bit curious if this is them needing the money (doesn’t sound like it if they are so close to profitability) or if this is the VC’s trying to grab a larger share by getting the company to raise more.
I was hoping to hear more about TRAVis, and what it’s all about.
Hello,
I have used ourstage for a while. I want to share my experience.
After the Spoken Word/Poetry channel and a dozen others were deleted, many artists were forced to enter their tracks in other categories. It was obvious that the choice that was left us was very limited. But we tried to compete nonetheless, because we live for our art.
As soon as one of my tracks started ranking in the top 50 of the new category it was in, I received a pre-formatted email from staff at ourstage explaining that many people had complained about my tracks not being a good fit. It was removed with no warning. This happened twice in one week.
I discussed this situation with a few other Spoken Word artists and they told me that they had encountered the same issue.
Ourstage is a money-hungry website that uses hypocritical ideas to get publicity. They want to help independent artists and save the world from mediocre music. Give me a break. We have complained countless times about rappers and other musicians spamming our channel with tracks that did not belong to the Spoken Word category. Nothing was done, no track was ever removed. Instead, they delete our channel!
Ourstage is a joke that has no respect for independent artists…
I must agree with you. And on another note, a lot of mediocre music wins at Ourstage because the f****g voting system they claim is 100% democratic – B*****t
Ourstage corporate team is the same people with old habits of the major labels. I see no improvement.
What we need is a site that honestly shows support for the music business. That is not about the board of directors and stock holders. Music business is about the music and not the f*****g money.
Ourstage is a corporation using the same major label tactics by hiding their tru identity.
Hey Johnny,
I am glad that you agree.
Have you tried ReverbNation? They don’t host any contest but their options are very neat and you can export all your music and videos everywhere you have a page with neat widgets…
If they raised $17 million in 2007, series A then $3 million in series B 2008 and plan on doubling 2008’s series B funding the total is not $23 million. The total would be $26 million if they double 2008’s funding request.
I agree, myself and others are leaving Ourstage. None of us like the recent changes in the format.
Most musicians I talk to in Boston just roll their eyes at it.
We are going elsewhere. It has lost the respect of many artists in New England.
Note we are the winner of the Nov 2008 Hard Rock Video category and came in #2 in the finals
AOL’s Ourstage has deleted the WinterBand fan page on behalf of a handful of false-christians who didn’t like what we teach and filed frivolous “complaints”
Details and documentation are available at:
http://www.wint...m/Ourstage.html
What has happened is outrageous religious censorship and discrimination.
Whether you love us or hate us consider the precedent that this situation establishes.
If anyone you know is investing time and effort building a presence and network of connections on Ourstage you owe it to them to make them aware of what is going on.
We were blessed to get a tip that our now deleted Ourstage fan page was still cached on Google. Now all can see the content that the corrupt staff at Ourstage lied about! Please WARN any and all you know who are participating on Ourstage about the corruption and dishonesty there. Post the link to our site in channel comments and song and video comments at Ourstage and in blogs.
Details and now documentation are available at:
http://www.ourstage.ws
Or
http://www.wint...m/Ourstage.html
Regards, and thanks for your support!
Bro. Steve Winter