Magnetic got a chance to catch up with Beatport CoFounder and Ex-Ceo Jonas Tempel after his open letter hit the Internet yesterday. Tempel has been a fixture in the electronic music industry for a while now from his early DJ career to cofounding Beatport and even reviving the classic Chicago label Moody records; there is no doubt he knows a thing or two about music with repetitive beats. We wanted to know why now? What's next and will there ever be a return to his beloved Beatport?
As one of the cofounders of Beatport, and a professional DJ yourself, you have been at the forefront of digital DJing for a long time. What’s next…? Do you see the world of consumer services like Spotify and professional DJing merging? Is streaming audio really a reliable option for DJs?
JT: I don't claim to be able to tell the future. So I'd rather focus on what is now. Its never been a better time to be Beatport. And its crazy exciting to be a DJ. The music is amazing and the parties are 24/7 around the globe. It's obvious that dance music is making a significant return to the underground, but that doesn't mean EDM is dead. The mainstream is now underground and what was underground is not mainstream. Sorority girls are in love with techno DJs. Kaskade is king and everything is morphing. It's an excellent time for electronic music. The future is now.
We had a saying at Beatport that "content is king" and I still believe that still stands today. Without the artists and labels, there is nothing else. The beauty is telling your story through music. It doesn't matter what you play, its how you play. Connecting with the crowd is what counts. The feedback loop is instantaneous.
It's my hope that software and technology innovations provide a powerful gateway to connect content creators with performers in a more meaningful way. Pioneer and Native Instruments seem to be the only brands making significant platform innovations. It's a small market but surely someone can come up with something fun and disruptive. Richie Hawtin has a new mixer that looks fun. He is always chasing the future and pushing his craft. Streaming audio for DJing is without a doubt the future. It can happen today with streaming previews into the software and playlist download for offline performance. But it's without a doubt possible.
Why the open letter? Why give away the playbook? Why now?
JT: I love this company and I love this brand. We built it from scratch. It was a group effort, and we all tried hard. And I'm just tired of looking at this sadness. I care too much to keep my mouth shut any longer. Beatport has been hammered in the press for a good reason; people really have become disappointed and uninspired. So I decided to weigh in with my perspective.
As far as the playbook, well all my suggestions have been done by other companies. These are not new ideas in general, but certainly a pivot for Beatport. Maybe they will spark some inspiration. The worst outcome would be if nothing happened.
Since leaving Beatport, you have had some exciting pivots and bumps along the way. What have you been up to and what’s on the horizon?
No doubt. Its been a crazy few years with lots of highs and lows. Watching Beatport from the outside and having no control has been more frustrating that I ever imagined. I'm not saying that we did everything right, and everyone after us was wrong. I'm not a revisionist. We failed all the time. But luckily we got more things right than wrong and we prevailed.
After leaving Beatport I was recruited by Beats By Dre to build Beats Music. It was a dream job and we formed a dream team. I worked for 18 months in stealth mode but ended up being fired before we launched. It was the first time being fired in my life but it was handled professionally on all sides. We just ultimately didn't agree on the vision. I'd like to believe that me and my team got it right and what they eventually built was widely rejected by the market. But it's impossible to tell. It just makes me feel slightly better to believe that. In the end I was rooting for them because I know that everyone wanted to win and we all worked passionately. Spotify is just very hard to beat. And its getting harder. Apple has no chance beating them with this product. I'd love another chance to build what we set out to create.
Right now I'm chairman and CEO of Factory Design Labs. Outside of that role I'm an investor and advisor to start-ups mostly focusing on their brand and product. I've never been an operations person and I don't enjoy that part of running a company. It's why I always partner with people that have the talent and tenacity to put ideas into action. Eloy and Brad were fantastic partners for a long time.
You are also a label owner, what are some of the biggest challenges facing indie labels in the dance music world? Is there any way to make money for small indies in this business?
JT: Running an indie label is a lot like running a small art gallery. We do it because we love it. Moody Recordings is my art gallery. It allows me to sign tracks that I love and help my friends. We make money selling and streaming tracks. The better the track, the better it sells. If it's catchy or has a vocal, it does better. However, the hardest part of this entire game is marketing your content. The market is so completely fragmented and its very hard to reach every platform. That is why I want Beatport to allow me to market on their platform. It just makes the most sense. Spotify has the most powerful playlists in the world.
It seemed that SFX was poised to be a real player in the electronic music business. Where did it all go wrong?
JT: No one knows, but in my opinion it went wrong from day one. The second Sillerman made it about him it failed. People lined up to take his money with zero loyalty. I can't even tell you one thing they did right. Can anyone describe an SFX success? Surely there was at least one.
I totally respect the vision. From the outside, it makes total sense. From the inside, it's more tricky. In my experience, dance music people are friendly but do not play well with outsiders. Especially outsiders throwing around money.
Would you ever consider returning to the helm of Beatport or is that all in the rear view mirror at this point?
JT: I would never rule out anything.
Fixing Beatport: An Open Letter From Jonas Tempel
My name is Jonas Tempel. Over the past couple of years, I’ve watched with extreme interest the developments related to Beatport, the company I co-founded and served as CEO from 2002-2010. I’m saddened by Beatport’s and SFX’s recent announcements, and I have been compelled to share my story of how we got started, why we cared, and what I would do to fix Beatport. This is only my opinion but as a fan of both Beatport and electronic music, I wanted to share my thoughts with the community I care about deeply. Maybe it could help.
Why Do I Care?
I DJ’d my first underground party in 1991. It was a small gathering of 100 people in an art gallery that we turned into a venue for one night. My set time was from 1:00-2:30 am. By then the room was boiling with sweat dripping down the vibrating glass windows. I’d never felt anything like it. My hands were shaking from adrenaline making it hard to get the needle on my first record of the night. I’d worked my ass off for this moment, practicing endlessly and curating my set of tracks that no one had ever heard before. This was my start. DJing was my art form, and I shared it with anyone who would listen.
That night began a twenty-five year DJ career. Along the way, I’ve seen every technology improvement related to DJing and music production and it gave me a unique perspective with which to guide Beatport’s growth. Now multiply that by my co-founders Eloy Lopez and Bradley Roulier’s equal passion and then compound that even further by adding in our entire founding staff and early investor group which included Bad Boy Bill, John Acquaviva, and Richie Hawtin, and you can understand why we cared so much. We were born to build Beatport.
Why We Started / Why I Stopped
In 2002 my friend Eloy Lopez came to me with a question that changed the course of our lives; Why can’t we buy the music we love digitally? Remember, this was 2002, pre-iTunes Store. There were other services but nothing that specifically catered to what we wanted, underground house music. Eloy and I were both local DJs with a deep passion for our craft. And let's face it, slightly nerdy which left us prone to being early adopters. During that time, new technologies were emerging that allowed DJs, for the first time, to perform from a software based system housed on their laptops and DJs we respected like Josh Wink were playing live for the first time with digital performances. It was the beginning of a revolution.
The only problem was that in 2002 there were no reliable sources for high-quality digital content. So Eloy, being the meticulous perfectionist that he is, would painstakingly encode every new release we purchased on vinyl removing any audio imperfection that might have been introduced during the recording process. Obviously, this was not an efficient model, but we had no choice. So we invented it.
In late 2002 we joined with our other friend Bradley Roulier, and a group of our most passionate dance music friends and we founded beatport.com. Everything we did was a labor of love because all of us cared so deeply about representing dance music and the culture of DJs the correct way. Looking back, this was probably some of the best times in all of our lives. We were changing the world from our little office in unlikely Denver, Colorado.
Beatport represented a logical step forward in content retailing. No longer were independent music labels restricted by the number of copies they could afford to manufacture. With digital retailing, for the first time, these artists and labels could create a global footprint and share their sounds with the world. And so began the rise of dance music culture. Week after week. From 2004 until my exit in 2010, there was never a period where sales did not continue to grow.
However, by 2010, we had an emerging problem. We had grown so successfully in our first few years that we were running out of new customers and in need of a broader vision. This change in our velocity was making our historically supportive group of investors anxious and looking for answers and adding a new pressure to sell the company while it was still growing. On top of everything else we had become internally fractured between the founders and that toxic vibe was infecting the company. The same passion that united us to build such an amazing brand was now killing it.
So in the summer of 2010 after one last disagreement with our lead investor, I resigned in anger and frustration and moved on with my life leaving behind everything we had built for a fresh start. My hope was that if the company was sold that a new team with fresh legs could pick up what we had started and continue our legacy. Unfortunately, that has not happened.
As I sit here today, I am just as passionate about Beatport as the day we started and I truly just want to see the company that our founding team so passionately created rebuilt and modernized to meet the needs of today’s creative culture.
What would I like to see fixed at Beatport?
To the Beatport team, if you are interested, I’d like to humbly offer three big picture strategic suggestions, followed by a short list of experiential enhancements that could significantly improve the platform in the near-term.
This list, in my opinion, could help begin to re-envision the brand and product to restore Beatport’s position as the innovative leader in electronic music retail:
Refocus the business model: Beatport is a B2B brand selling premium content to DJs and producers. Anything that distracts from that mission destroys the focus of the brand in serving its core customers. The consumer or fan is a commodity business that needs to be monetized through ad revenue, and it disrupts the purity of the mission. If Eloy rejoined the company, he likely could have fixed the streaming model. With his experience running Digitally Imported he understands the need for curation and knows how to run these business units profitably. But without properly curated playlists and premium streaming experiences, there is no point to be in this business. Beatport did a small amount of event curation but never connected those experiences in meaningful ways with the core business and as a result added further dilution and confusion into the user experience. Beatport took a gigantic step in the right direction eliminating all of these services. But this should be further cemented with a renewed commitment to defining the core business model.
Fix the brand: In the beginning, Beatport’s core mission was to lead the transition from analog to digital content retail. But our brand always stood for more. Our goal was to be the most important brand in electronic music uniting the world around the sound we loved. We believed that content was king and that our jobs were important. Today, Beatport feels like a playground for ravers. The credibility we worked so hard to build is badly damaged. My advice, stop thinking and acting like a store that just wants to sell more downloads. It feels greedy. You have a bigger responsibility to inspire a global audience. Take a stand. Be bold and brave and redefine the mission publicly. The audience is listening.
Fix the experience: When we built Beatport we had a very tough job. In 2003, nothing existed, so everything we needed had to be built. That included a content ingestion system, audio encoding, retail storefront with a custom CMS, a transaction engine for credit card processing, an entire accounting package that had real time sales stats, a search engine, language and currency localization, content territory restrictions, and a few other odds and ends to hold it all together. Obviously, our first versions of all that technology were incredibly primitive and not terribly reliable. But we made key hires and continued to improve the platform with every release. We took pride as an organization releasing updates and treating them like software updates. 1.0, 2.0, 3.0, and my favorite 4.0. But today, something has changed at Beatport. The site and all of its extensions are boring and lack any hint towards innovation. Its the same user experience we launched in 2004. Home page banners feature promos and a top 10 chart. Its time to rethink the entire platform design and give the users a renewed and more inspirational experience.
What follows are my suggestions for improvements that in my opinion significantly and immediately improve the user experience as both a customer and content provider:
Please let me shop from a Content Feed. Beatport needs to move away from static page designs and into a feed based system and allow customers to scroll through the feed as they choose. A user’s feed could be controlled by filters eliminating genres they are unlikely to purchase from and date ranges that can be adjusted on the fly. This way the user isn't stuck with a static homepage experience for seven days a week. As for artists and labels, allow them to promote releases and market themselves in the feed. That way they don’t need to leave Beatport to do marketing or pay some dark net website to buy their tracks for chart position. And hey, if a brand wants to sponsor a bunch of content into the feed, they have a platform to do so legitimately. And as a user, we can mute annoying content as with most feed based interfaces.
Please let me market my content. As a content owner, I need to be able to market my content where my customers are shopping. This is basic logic. As a label, I’d like an expanded set of tools to help promote my releases and the artists on my roster. I’d like to spend some money to ensure exposure at the top of the feed for example or maybe only in certain territories or genres. Beatport can revive Baseware™ into its original mission as a content operations and marketing platform and create a new revenue stream that is based on algorithmic technology. This would give labels the confidence to know how well their content is doing at any given time and spend against its success. This model has been perfected by Google and then innovated again by Facebook, Instagram, and LinkedIn. Its long overdue at Beatport.
Please truly integrate the Facebook API. It's a sad state of affairs when dating apps know more about my musical taste than Beatport. How can this be possible? Beatport should be using the Facebook API and other learning algorithms to dynamically generate a significantly improved retail experience. The algorithm should be weighted by my location, the artists I follow, the clubs I follow, the places I go, the music I post to my feeds, the size of my following, my purchase history, and other factors. This is table stakes in today’s market and can be integrated with a renewed content discovery strategy.
Location, Location, Location. When we launched Beatport, we were the first retailer that truly introduced territory restrictions. But today, location-based data could be widely deployed against the entire user experience. As a customer, I may want to focus my interest in a certain region. I may want to know what DJs are from that region, what clubs, what labels, or what festivals. I may want to tag my chart that I’m publishing with the locations of my next few club gigs. Maybe as a customer I’d like to search the Top 10 Techno tracks sold in Berlin. And as a label or an artists, I might find significant value knowing how my content is trending in the regions where I’m focusing my marketing. There are endless reasons to add location based filtering.
Streaming Content Subscriptions. In 2011, I met a young French developer name Adrien Wurth, who had figured out a way to DJ with content streamed directly from Soundcloud. He built a very cool website with a fully functioning DJ app called PartyCloud complete with beat sync, EQs, filters and some simple FX. Its still posted live here: http://www.partycloud.fm. It was a primitive interface, but I was so amazed with his vision and the potential of having every song in the Soundcloud content ecosystem available in a DJ library. That was five years ago. Its now 2016 and only a few apps have now integrated this concept with Spotify’s content system and achieving similar results. Pacemaker is probably the most interesting of the group. But hello Beatport? You are sitting on the most coveted content library for DJs on the planet. All content should be available as a subscription. You should audition all the content you want in a connected streaming mode and move your performance playlist to an offline folder for your set. There is, of course, some legal and technical implications but nothing that cannot be created and solved with licensing. This isn’t for everyone at first, but it's ridiculous to be still carrying around these thumb drives and jamming them into controllers when the content can be streamed. At least develop a skunk works team that could partner with Pioneer or Native Instruments to stream content directly into their control surfaces.
Discovery Groups. Groups is a very natural concept in both online and offline worlds. Groups tend to share similar interests and influence each other. In a modernized Beatport, they should create this concept so that like minded people can group up to discover more content. As an example, I may want to join a particular group related to my favorite DJ or Label. Or maybe I want to follow a particular sub-genre started by a group of DJs in Paris who prides itself on finding deep and groovy disco house. Or maybe I’m more interested in joining a group that only likes songs made with analog gear. Regardless of the focus, joining a group creates a more intimate experience and gives me some solidarity within a digital environment. Giving that group some tools like charts, blog post or video feeds could be very valuable to discovering content in a new way. Can you imagine the fun of subscribing to your favorite DJ’s playlists and being able to stream that content for DJing directly into your sets? Its long overdue and Beatport needs to lead this innovation.
Cloud Storage. Beatport should offer a competitively priced content storage platform that will house your entire purchase history. Or, as an alternative, offer integration with popular cloud storage platforms like Dropbox, Google Drive and Amazon. Its a no-brainer and could serve as a valuable service to back up large purchase histories. My account on Beatport has 10,362 tracks that could be beautifully backed up to a storage account for easy access.
These are broad ideas that require investment, leadership, and innovative thinking. But imagine the impact just a few of these could make. It gets me excited just thinking about the potential.
I hope this post is received with my best intentions intact. We all share a love for this brand and fixing the weak spots makes sense for the industry.
Log On. Get Down.
Jonas Tempel / Founding Partner - Beatport.com