Running a music business in 2016 almost seems akin to being in the band that kept playing as the Titanic sunk. If you haven’t got Taylor Swift calling you out (Spotify), it’s the ASX (Guvera), or consumers who will easily find a way to access platform-exclusive releases without signing up (Tidal).
Despite the headlines, it’s not all doom and gloom. In fact, Australian online radio station Pulse Global has been going from strength to strength since it began refreshing its business model in 2012.
The business was first launched out of Perth in the 90s, at the time one of the first online radio station services. Streaming 24/7 DJ sets of electronic music, the business never saw much growth, simply covering its costs, until Wade Cawood, now a cofounder and CEO of the new Pulse Global, came on board in 2005.
“I took a liking to what they were doing, because I felt it was ahead of its time. There was no business model for streaming then, so I just worked on it part-time and kept an eye on the industry,” he said.
Cawood said he decided to go full time a couple of years later, just before the explosion of electronic, or EDM, music in the US and its crossover into the mainstream. Cawood linked up with Simon Beckingham to officially take on the business in 2007, at which point they began working to figure out just what Pulse Global’s business model is.
The pivot came in 2012, with Pulse Global slowly becoming a one stop shop for almost everything EDM. It is now a music hub, allowing fans, artists, labels, venues, and promoters to connect and share tracks through its streaming functions; an events and ticketing platform, enabling promoters, agents, and artists to run events; a community management service; and a content hub, with a team writing about global EDM news and culture.
Cawood highlighted the work of Beatport, an online music store focused on electronic music, as inspiration for the new Pulse Global.
“Beatport was actually developed before iTunes, with a very similar model to what iTunes started out as, but electronic music is an industry that is surrounded by futurists and leaders within the technology world, so seeing that BPort had turned its business model on, which at that time was selling music, definitely gave me the confidence to go all in,” Cawood said.
Convincing other people to back the business, however, was a different story. Cawood said Pulse Global ran on a shoestring budget for several years with a number of staff not taking pay; while difficult, he said the experience allowed the team to make some mistakes that weren’t too expensive.
The lean approach helped, with Cawood and Beckingham figuring they could expand Pulse internationally by finding strategic partners who could become their clients in various markets. They partnered with festival owners who they saw becoming content providers while then going on to become leaders in building the EDM community in their market, with the advertising model and ticketing platform then turned on once the community was large enough.
The business now has partners in countries including India, the Philippines, Malaysia, Singapore, South Africa, and Brazil, and offices in New York, London, and Ibiza. By building up local communities, learning about what it is they like and what they want, Pulse is able to work with its partners to personalise content and other offerings, as well as develop new market-specific business models.
This international presence is significant, with an IMS Business Report released in 2015 finding that the global EDM market grew 12 percent in 2014 to a value of $6.9 billion, up from $6.2 billion in 2013. Given this growth, the ticketing aspect of Pulse has particular potential – Pulse has been testing its ticketing technology in Australia over the last two years, during which it sold $4.5 million worth of tickets.
Cawood said the strongest market is still the United States, though he is particularly excited about the potential for China and India.
“There are 225 million kids between the age of 16 and 25 in India and only 0.3 percent have attended a music festival in their lives, so the penetration of dance music is small but the numbers are so large that I think in the next two or three years you’ll see India become a dominant force in electronic music,” he said.
The potential of the ticketing platform has seen Pulse scale back its streaming operations, outsourcing it to another company.
“I made a decision to take a step back from streaming and let someone else try and figure it out with their multimillion dollars because it’s not an easy problem to solve,” Cawood said.
After years of operating on a small budget, Pulse Global is now looking for investment to expand, planning to list on the ASX via a reverse takeover later this year.
Despite the bad press music services have gotten since the disastrous listing attempt by Guvera a few months ago, Cawood said Pulse hasn’t been scared away, but rather is confident about its potential.
“We’ve been working on the listing for the last 12 months now. I wanted to get the company in the right place to do it, I’m not looking for a free handout, I’m looking to go get out there and do good for my staff and the industry. We’re working with companies that are doing great things globally for harm reduction at festivals, for solving the copyright issue, and things that are just leaps ahead of anything out there in terms of just improving the industry, legitimising the industry and really just separating the people who want to make a difference and the jokers,” Cawood said.
As well as the listing and rolling out its ticketing platform to global partners, Pulse will over the next few months be launching a video production studio to expand its content offering to video.
Image: Wade Cawood. Source: Supplied.