If you've been paying attention to the trials, troubles and tribulations of the music industry, you probably already realize the kids today don't exactly line up outside Ye Olde Record Shop anymore. Case in point: Nielsen SoundScan estimates that 2007 U.S. record sales dropped 9.5 percent from 2006. Realizing that free music doesn't necessarily have to be unprofitable (or illegal), Demian Bellumio founded Cyloop at the tender age of 31. The ad-supported site combines the bumpin' grooves of free on-demand streaming music with the stalkerish thrills of a social network, and even the music catalogs of EMI and Warner have joined the party. Bellumio lives in Miami with his fiancée, and still picks up the occasional CD as an impulse buy. And the online trend that's annoying him most right now? "This might sound weird coming from someone building social media technologies," he prefaces, "But I don't care to know what all my friends are doing all the time. It takes the mystery out of life." Don't say he's not honest.
Where did the music industry go wrong?
Trying to continue at all cost with a business model that was not aligned with how consumers wanted to enjoy music. The slowness in embracing innovative digital services has steered users towards finding other means to access the content, and unfortunately the only easy and efficient means were illegal.
Any industry is skeptical to change their business models and accept that their core
product is on its way to a rapid extinction, so many people did not want to accept the inevitable. Also, technologies evolve very rapidly and music companies were not prepared to deal with new
technologies and its
Many of them have [now] hired experienced professionals in the digital realm and some labels had changed their strategies 180 percent to embrace new digital products and services. Digital is now clearly accepted as the future of the industry. If it is not embraced, then it will be very hard to stay in the content business.
Is ad-supported content the future of the music industry?
I believe that the future of music is about access. I believe that if the right tool and content is offered to consumers, monetization will come naturally. Monetization can be either through direct payments or indirectly, through advertising. Music content and artists are of great interest to brand advertisers, and if companies are smart they can tap into multibillion-dollar ad budgets through music content.
Ad-supported revenues should be one of the key revenue drivers of digital revenues for the labels. Digital advertising itself will continue to grow and I expect that in 10 years it will be bigger than TV and radio. Music and everything associated with it will always attract sizable budgets; the question is how proactive the industry and the artists are in coming up with creative ways to unite the two.
How important is it for cyloop.com to spotlight independent artists?
This was at the core of what we set out to build. If we help the indie artists, we help the labels and we help the industry itself. I just hope that the artists remember those who help them along the way and support the small, innovative and hungry companies that take a chance on them at the beginning. The music industry is filled with stories of artists and labels that sell out to big media once they get their big break.
Who's playlisted on your Cyloop page right now?
Hundreds, and I am particularly proud of those that we helped launch, by supporting them from the ground up and which are on top of the charts now, like Fanny Lu, Melocos, Mala Rodriguez and Calle 13.
What Web site do you and your family use the most?
I use Yahoo, as I spent years customizing it. I like to explore new sites, I don't only see the product, but I love to imagine the talent and the imagination that was utilized to create it. My fiancée likes univision.com, and my parents spent a lot of time on clarin.com, where they read the latest news from our home country, Argentina.