UMG LogoThe music industry is a funny place, a who-you-know king of place - very network driven. I found this behavior in the movie business too. It almost doesn’t matter who you really are as long as you know someone who knows someone. Since there is a work-your-way-up-from-the-bottom culture, it’s not entirely surprising there would be a bit of mis-trust of outsiders - and when and industry is celebrity driven, trust becomes ever more important.

So, in 2004 I made inroads into the major labels along three paths. Path 1 - a friend of mine had dated a guy who was a technology business analayst at EMI. She gave me his email address and let him know he should talk to me. We met for coffee and he looked over our plan; liked it. Passed me to the director of technology. He liked it. He passed me to the director of the newly formed group for digital distribution. She liked it. All good. More to come there. Path 2 - one of our advisers connected me with his lawyer for help with funding. He wanted to vet out our idea with another lawyer friend Peter Shukat. This is where the celeb part comes in - Peter’s clients include major names like the Lennon Estate, the Hendrix Estate, and other living majors (I don’t even know). Met with Peter and his associate (at the time, now partner) Jonas. They liked what we were doing so much that although they had not represented a music technology start-up since MusicMaker in 1995 that they dove right in and decided to represent us as media counsel. Jonas knows everyone at the majors and made some calls. We had reviews with Sony/BMG and Universal. Great. Third path. A friend of mine’s brother is the CFO of Warner music. So he hooked me up. In the end it’s all relationships. Now we were in will all four major labels. But once you’re in, if your relationships don’t extend farther (or you have a celeb patron), you have to do a lot of hog-trading. By end of 2005 we had done business and technology reviews with all four labels and they all approved. Now they just wanted to do financial reviews - see what we have in the bank - see how long they thought we would last - see who was backing us. Not so great. We didn’t have any cash, but we couldn’t really get any cash until we had a deal with the majors. But to get a deal with the majors you have to pre-pay around $250k per label to ensure their revenue. Catch-22. No luck on our part and no celeb patronage. We had to let the relationships die out until we could make additional progress. And now we’re here. We’ve re-engaged EMI and are about to re-engage the others. Now that our software is nearly complete and we have a couple VC’s interested, we should be able to navigate the catch 22 of the major labels.

Originally published on WordPress on January 19, 2007. Migrated to this blog on May 29, 2025.