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Good morning! It's Tuesday, October 17th. Today’s post looks at Songfinch, a company expected to generate $75M this year and has attracted investments from artists like the Weeknd and even the CEO of Atlantic Records!

THE FEATURE

How Songfinch Is Disrupting the Music Streaming Industry

Songfinch was founded in 2016 by artist and music industry entrepreneur John Williamson and is already on track to hit $75M in revenue this year!

Let’s break down how a company can generate 8-figures annually from selling just one product: personalized songs.

What’s the Business?

The idea behind Songfinch came to Williamson in 2013 when he was the best man at his brother's wedding. Instead of giving a speech, Williamson hired a band to write a song on how the couple first met and was amazed at its emotional impact on the wedding party.

While the idea to create a marketplace for anyone to commission a song for any occasion was great, it would take another three years for Williamson to figure out how to make it sell.

When he launched Songfinch in 2016, he raised $750K in pre-seed funding, but there wasn’t a lot of consumer demand for personalized music. By 2020, Williamson was down to just $30K left with no staff.

What saved the company was a marketing epiphany: consumers were more interested in the emotional impact of the songs than the actual music. With the remaining $30K, Williamson created a Facebook ad that launched right before Valentine’s Day and featured stitched-together videos of people crying or embracing one another.

The Facebook ad campaign was massively successful, resulting in more sales in a single week than he had received all of the previous year. Williamson initially struggled to meet this new wave of demand, but he’s now become accustomed to adapting quickly since his company has seen insane Y-o-Y growth since the initial social media campaign:

• 2019: $150K

• 2020: $1.45M

• 2021: $5.5M

• 2022: $36M

• 2023: $75M (estimate)

How They Win: A Haven for Artists Fed Up with Streaming Platforms

Songfinch currently has a team of 2,000 artists who they’ve paid over $20M to in the past 12 months.

Artists must apply to work on Songfinch’s platform and submit test songs to prove they can do everything from songwriting, instrumentation, singing, and audio engineering. It takes Songfinch artists 3-4 hours to produce a piece that customers pay $200 for. Songfinch takes $100 and leaves artists with the remaining 50% plus tips (equaling out to about $25-$35 an hour).

Making a little over a hundred bucks per song may sound terrible, but it’s equivalent to the royalties from 23,000 streams on Spotify, a feat few artists actually accomplish. The top 5% of musicians earn over half of total streaming revenues, meaning it’s only possible for artists with star status to make a living on these platforms.

Songfinch musicians also retain the master and publishing rights for all the tracks they produce. This allows them to build their portfolio of songs and encourages them to produce quality music that they’d be proud to associate with their brand. Plus, they can build relationships with each of their clients and form a grassroots fan base.

Key Observation

In most industries, there is a group of stakeholders getting the short end of the stick. For the music industry, that would be independent artists who relied on physical album sales but were abandoned after the rise in streaming platforms.

Songfinch scored big by appealing to the music industry's overlooked stakeholders and tapping into their potential to create artistic products that align with consumer demand.

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