Drip.fm has indie labels eager to become subscription music services

Which of these digital music services would you subscribe to – one offering a couple of albums for ten bucks a month, or one touting millions of tracks for the same price?

On those numbers, three-month-old Drip.fm may sound like a poor bet against Spotify, Rdio and Rhapsody. But the service, which was started by one independent label and is host to several more, could succeed at creating a more intimate business relationship with indie music fans.

Drip.fm is a subscription music platform with a difference. Through it, indie labels self-release just a few, hand-picked new tracks each month. Customers subscribe not to Drip.fm as a whole but to individual labels’ drips, for fees – like $ 9.99 – which labels set themselves. Users get new releases, often before widespread availability, as high-fidelity downloads (not streams), and occasional special items like b-sides, remixes or tickets; whatever a label might muster in to a package exclusively for its followers.

The idea is to help listeners reconnect with small labels as trusted curators to good music. Eleven labels including Stone’s Throw (Aloe Blacc, Madlib) and Fool’s Gold (Vega, Nacho Lovers) currently use the service, which is in closed beta. Sam Valenti, CEO of Ghostly International, the label which started Drip.fm, tells paidContent “hundreds” more are asking to join

Ours is an inverse model. Instead of trying to offer a world of music, we are trying to offer a very selected, specific experience.

“For the longest time, we had fans saying ‘Hey, can I give you my credit card?’. Spotify and Rdio are great services, but they’re not necessarily cultural places.

“The record store experience was the ultimate music experience in is heyday – someone knew who you were, they remembered what you bought last week, showed you new stuff.”

Drip.fm’s model is a new, recurring-revenue spin on the direct-sales that some labels already attempt to do, and recollects the old mail-order monthly CD and cassette music clubs that some labels used to operate.

Domino Records (Animal Collective, Franz Ferdinand, John Cale) is nearing a thousand Drip.fm subscribers for its $ 9.99-a-month offering, which is averaging publishing 35 tracks a month through it, the label’s digital head Kurt Lane tells paidContent:

“There’s a whole host of ways that people are accessing media on a subscription model, like Netflix, The New York Times and Spotify. We get the best margin when we sell D2C (direct to consumer). But sales we make through Drip.fm are on par or better than we get with other digital services.

“There are people who, historically, have a deep relationship with the artists on this label.

“And there’s a fairly sizeable fan base that is buying a lot of our artists. We’re always looking at new ways to sell music to those people.”

Drip.fm’s model is to take a commission from labels’ subscription takings. Valenti won’t yet disclose the rate he takes and the service is still in the early stages of development.

But, in a the smaller world of indie labels, where emotion and connection count for plenty, that’s not necessarily the mission for Drip.fm, which hosts discussion about each new-release track it publishes.

“We’ve been showing it to the labels on a one-to-one level,” Valenti says. ‘We don’t even have a deck or a PDF or anything.

“This is a very tangible set of fans. Once you put the personality back in and take away the potential threat of criminality, people are incentivised to respect property.

“For Ghostly, it’s become a big part of what we do. Some of the labels are making significant returns on their drips – that makes me really happy.”

Labels, which are beholden to iTunes and which are currently examining the royalty rates they earn from streaming services, may enjoy taking control through this direct subscription channel.

There’s only two digital platforms that I ever thought were a good idea,” Stone’s Throw artists and web director Jeff Janks said in July (via ComputorEdge). “First one was iTunes, second one was Drip. Most everything in between seems corporate-minded, aimed at major labels and mass audience.”

Drip.fm is never going to be the world’s biggest business success story, and it won’t topple Spotify’s ilk. Valenti says many people will use both, in an ecosystem he likens to food: “You don’t only eat at three-star restaurants or eat only Greek food, you have different kinds of meals.”

But next on the agenda are a design upgrade, high-quality FLAC files and offering price incentives to customers to subscribe to multiple labels.

With many new labels apparently knocking on the door to join in, Drip.fm may yet become a characteristically small-scale indie success story.



GigaOM