Audiodraft is a crowdsourcing platform where anyone can pay for custom music through contests or commission. The target customer turned out to be advertising agencies who would run contests so that various unknown or known artists could bid on projects and create custom jingles for ads or new brands. The community was composed of over 20,000 artists who would customize the music at the customer’s request. The startup made it to the news of Wired’s top 100 European startups…but that was 3 years ago and all we’ve heard from them is radio silence. Unfortunately, since media coverage over indexes on why a company succeeds instead of why a company may fail, there is not much scholarly mention of why Audiodraft played all of the wrong notes. Below is a quick theory of why this company, and the next one like it won’t strike the right chords either.
If I want a song, do I really need to crowd source it?
The first issue is that the market for people who must have their own custom song as opposed choose from one of the millions of songs already out there is not very large. One can think that Audiodraft is trying to occupy a niche in the market, but we shouldn’t confuse a small market with a niche market. If they were truly to occupy a niche in this market, they would cater to sports advertising jingles, which would be an even smaller market.
Of those who are still part of the available market, the average consumer might wake up one day and want a custom song, but his willingness to pay is likely to be low, and the urgency of his need is also low. This means that the average person can find more alternatives such as asking a friend/amateur artist or finding a substitute on youtube.
For the advertising agency, there is more urgency and higher willingness to pay. However, Audiodraft does not decrease the searching cost enough to justify the price. Furthermore, agencies also have alternatives such as Youtube where they could scope out potential talent. The competition of selecting a jingle is appealing, but most advertising agencies probably already have an idea of what they want and thus won’t jam well with the incremental value of crowd sourcing.
All of these factors lead to weak demand for work on the platform, which means Audiodraft has a difficult time attracting the network of artists that can’t be beat. Artists may sign up for the platform just because their alternative is no work, but with alternatives like Youtube, Spotify, or Soundcloud artists can multihome with no repercussions. If artists don’t find many new jobs through Audiodraft, churn rates increase exponentially. Soon the 20K community will dwindle down to zero, and Audiodraft won’t get to finish it’s own song.