A Second Chance for Garageband.com

Looking for music content for your subscribers? A famous dotcom content provider has reopened its Web-based doors in a leaner and better-funded version of its former self.

by Gretchen Hyman of siliconvalley.internet.com [September 24, 2002]

The online platform for emerging musicians that launched in 1999 with involvement from "Talking Heads" co-founder Jerry Harrison and then crashed in early 2002, re-opened its doors Monday as a leaner and better-funded version of its former self.

Garageband.com, home of Garageband Records, has re-entered the cyber music scene with industry veteran Ali Partovi as its new chief executive officer and a new round of funding from employees, fans, and contributing musicians, who in their enthusiasm to see the company revived, formed Evolution Artists, Inc. and purchased back Garageband.com in August of this year from its original investors.

Partovi joins Garageband.com after co-founding LinkExchange, a company that helps startups increase Web traffic and revenue through a wide range of services including a cooperative banner advertising network. LinkExchange was sold to Microsoft Corporation in 1998 for $265 million and Partovi went on to work as a consultant for Oracle, Google, Overture, Yahoo, and PayPal before finding his way to Garageband.com as the lead investor in its relaunch.

According to Partovi, LinkExchange and Garageband.com are based on similar concepts.

"They both have to do with the spirit of helping the little guys get a shot at making it big by creating strength in numbers," said Partovi. "Also from a business standpoint, taking that position doesn't create an over-dependence on one customer."

Sticking close to its original mission statement of "empowering independent musicians and helping people discover new music," the newest incarnation of Garageband.com will continue as a free online music contest that lets its listeners determine which up-and-coming bands and musicians they like best by casting their vote in the form of a brief music review and multiple-choice survey.

Garageband.com then distills music submissions into a song list, or "Top 100" chart of bands across multiple music genres that have won kudos from the majority of Garageband.com listeners.

For the bands themselves, Garageband.com offers unlimited exposure and feedback from a community of music lovers and a launching pad for new careers, all in exchange for their own participation. A band or musician can post their music onto the site, but they first must earn a minimum of twenty points by listening and rating music from their piers.

According to Partovi, the fatal business flaw for the former Garageband.com model was that from its list of top musicians, the company tried to market and distribute popular content through the Garage Records label in a mainstream marketing push. Garageband managed to produce four albums, but the high price of distribution was the clincher. The company eventually found that it didn't have enough capital to produce enough artists to generate capital and burned through $17 million in investor money.

"It was great in theory," said Partovi. "But it was very capital-intensive and contributed to sinking the original business model."

Under Garageband.com's new business model, the company will no longer tie itself to the success of a single band or musician, says Partovi.

In addition to offering a free and ongoing contest arena for musicians and fans, new revenue streams will be based on a subscription-based service for listeners and musicians who want continuous access to the premium music picks of the site.

Garageband.com also intends to serve as a scouting and data collection tool for outside record labels in their continuous search for bankable new talent.

Additionally, Partovi and partners are in talks with a few MP3 device manufacturers to create a service that uploads Garageband.com's premium music picks to paying subscribers.

"There is a need in the music business for a more affordable, legal way to receive new music," said Partovi. "The popularity of free online services are doing very well, although there are also a ton of music-related startups that are on the verge of going out of business, or like Garageband, are coming back with a new and more sensible business model. Its all about weathering the storm for any startup and right now, and we're a very lean company."

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