• by Charlene Weisler , Op-Ed Contributor, February 9, 2015

Jeremy Kagan has an eclectic background, from managing punk rock bands to hyper-local digital business development. His company PricingEngine helps small businesses take full advantage of digital advertising opportunities.

Here is an excerpt from my full interview with him:

Charlene Weisler: Jeremy, you got your start in the music industry at a time of great transformation. What did the music industry do wrong, and what did it do right?

Jeremy Kagan: I had been involved in music on the booking side and working with bands for many years. I actually had an Internet music company in the 1990s doing custom CDs. One of the things we realized very early on: you only have a few players that can really make or break your business. …

Structurally the music industry is in a difficult place. There are only a couple big players, a lot of lawyers and very difficult-to-do deals. From the digital perspective, a lot of the decline in music can easily be explained as such: if you can buy just the single you like, why would you buy the whole album?

For a long time the industry got away with selling you the whole bottle of wine when you only wanted a glass…. So most of the decline in sales can be explained simply by the fact that now we can buy just the songs we want.

CW: Do you see music rebounding?

JK: A friend of mine at one of the records labels said that the music industry is just fine. It is the record business that is in trouble. That is one way to look at it --  because when artists  go on tour, when they are selling merchandise, they still do pretty well. I think… it is always darkest before the dawn. We’ve got Spotify, Pandora, all of these other great ways of streaming music, consuming [it] everywhere we go.  We are listening to more music than ever before, but we may have left the age of selling 10 million records.

CW: Do you see any comparisons between the music and television industries?

JK: Music and television are both long-established businesses with complicated rights administration challenges.  Both have traditionally been at least partially financed and marketed based on format windowing, ad-supported versus purchase for example, and geographical windowing.  These are eliminated in the age of digital distribution.  Both are also being changed by new financing options like Kickstarter for new music and film.

CW: As television becomes more digital with smart TVs,  how will that impact your business?

JK: As television becomes more digitally delivered, the long-hoped-for ability to target audiences by viewer will be a major improvement.  Currently television allows household targeting at best, but if advertisers can target specific viewers, it will be a major change -- much as we already do digitally.

CW: What are your concerns about fraud?

JK: I think that the real challenge is, as the demand out there surges and as there are more hand-offs between exchanges and networks and real-time bidding, there is less accountability. We are seeing much more of a need to bake in fraud detection. But there are not just the bad actors. The real challenge is the grey areas. Is it legitimate video if it auto-plays and the ad is not really seen by someone because it is not really on the screen? This is more of a concern to me about the long-term health of the industry.

CW: Tell me about PricingEngine.

JK: PricingEngine is my current company that we started a little over three years ago. I have always been involved in music and creative things, but also in advertising and digital ventures. Through my work I realized that the big guys always had a great set of tools and a lot of people to help them out. It’s  the little guys who never have any help.

So we look at mainstream businesses all over the Internet economy…. None of them have much choice beyond Google or Facebook self-service.   We are a simple turnkey solution where a small business can come and buy search, figure out what the right keywords are, what the right ads are. We do the budget, we build the platform. For a small fee, we do everything.