Montreal entrepreneur Clayton Berg is ready to kick off his music-sharing startup, OpiaMusic. A recent crowdfunding campaign unofficially launched the startup, a process that was more about raising awareness than raising money.
Within four weeks 1,200 people were on board with his idea. The message resonated so well with them that Berg and his team received emails from all over the world, some of them even startling. “We actually made a video of all the messages we got, ranging from people asking questions to people being really militant,” said the president. “To some degree I don’t think we were prepared. The level of engagement was through the roof”
OpiaMusic is a 100 per cent free music-sharing platform that is designed to bring the tools and services of business incubators to independent musicians. Founded as of last week the startup wants to fix a “broken system” by allowing musicians to produce and sell their music for free. The company is not trying to compete with massive distributers like iTunes. Users will be able to sell their music on the platform but they’ll also receive assistance in selling through iTunes as well.
Berg said typical distributors in the industry are “milking the musicians dry”, as iTunes charges 38 per cent of revenue, while Spotify’s online radio pays just 0.4 of a cent every time an artist’s song is streamed. Under these cirumstances an artist’s song would have to be streamed over 300,000 times in a month just to match a McDonalds employee’s pay.
“The industry as it is now is going to die and it can’t keep doing this,” Berg told Techvibes. “Its becoming easier and easier for musicians to make their music and promote it online and it’s a revolution waiting to happen. It’s 10 million musicians that are being crapped on by a few rich people and eventually they’re going to split off.”
He started the company after a substantial career in economic development consulting, having worked for the UK government assisting startups. There he met OpiaMusic’s communications officer Alessandro Masi. Meanwhile Ken Ito, formerly of Google and Softchoice, serves as development officer.
Having witnessed a “desperate” industry of passionate musicians consistently underpaid and under appreciated, Berg set out to create the perfect company for growth. “You find a demographic that’s desperate and you give them something that no body else will and that’s what OpiaMusic became.”
The company may not be the first with the idea to create a place where musicians can sell their product for free, but they’re likely the quickest to get it to this stage. They’ve already formed partnerships with eight companies including Founder’s Fund Award winners FanDrop, a content distribution platform, and PlayMySong, a Silicon Valley-based mobile social jukebox with over 60,000 users. Berg says monetization will come from utilizing profit sharing agreements with partners as well as a second-hand market place for musicians to buy and sell items.
But why has no other startup effectively tried to do this? Berg calls the current music space a “cash-out industry”. “Startups will create something awesome and then sell it in a year and take their $15 million and walk,” he said. “What I’m looking at is bigger, it’s changing it entirely.”
The ambitious startup will undoubtedly benefit millions of people given the traction, but what’s to stop Berg from selling the company in a year after attaining success? How transparent are his intentions?
To combat these notions he donated company stock to The Upside Foundation. When companies attain an exit the foundation converts those options into cash for charity. “I am literally times two the largest donor of stock options to The Upside Foundation,” he said. “And I did that because I wanted to show people this is for real and I’m not out to make millions of dollars.”
Aside from the distribution side of the platform, OpiaMusic also wants to create an online incubation-like platform for these musicians. For this they’ve partnered up with AdvisoryLabs, a new platform designed for entrepreneurs to get advice from successful people.
The music industry has always and will always be highly profitable, and OpiaMusic wants to change the relationship between artist and distributor. It cant be one-sided anymore, but rather symbiotic. “It has to be around working together and that’s what we’re doing, were just going about it in a very different way,” said Berg.