My name is Scott Hildebrand and I’m the CEO/founder of a local Sacramento startup called Tubes. I recently graduated from UC Davis with degrees in music and computer science, and instead of going straight to work or to grad school I started a company.

Tubes is about freedom of music. We believe that music should be free as promotion for artists. What we’re building with Tubes is a marketing and promotion infrastructure that works for artists, and also a way to make discovery of new music easy. It’s been a lot of fun building this and I expect it’ll keep me busy for quite some time.

My motivation for this was not “I’d like to start a company so now I need to come up with a good idea.” With Tubes it was the other way around, I had a great idea and I had to figure out how to make it happen. Fortunately the market size is huge and only getting bigger. Over the last few years, acquisitions for services similar to ours have been in the $350-$650 million range.

Starting a company is not a trivial or easy thing and there have definitely been ups and downs. The most important thing has been staying excessively tenacious and learning as much as possible from my own mistakes and the experiences of others. So now I’m working with a great lawyer at an international law firm in Sacramento, a great advisory board consisting of people who have experience at Sony, EMI, Disney, MTV and the original Napster, and a great development team that’s working on a beta release. You know you’re truly onto something when two of your developers tell you they only need food and a place to sleep in order to code full-time!

Why do we do this? Traditionally revenues from sales of recorded music never make their way to artists’ wallets. Artists usually get some sort of lump sum as part of a record contract, in which case the label owns the rights to the music. This amount plus any and all costs associated with developing or marketing the band, and costs to produce and ship a record must be paid back to the label before the artists themselves are eligible for any royalties. Another key thing to be aware of is that 7,000 CDs are released by major labels every year, and only about 300 of those are profitable.

A record company is very much like a VC; they invest in 10 bands/companies, most of them flop, a few might break even or make a modest return, and hopefully at least one hits it out of the ballpark. As a result of this most artists get dropped from their labels and their music is no longer owned by them. What this means is those recordings are tied up and the label no longer has any incentive to market or promote the artist. This is just how the music industry operates. It used to work but now it doesn’t and so we need another solution.

MTV and popular radio used to be absolutely essential in getting the word out about a new artist or single, but now the landscape is dramatically different because of digital music and the Internet. Artists and bands now get most of their promotion via word of mouth in person and through communication on the Internet. MTV hardly plays videos anymore and the music video has lost a lot of its influence in general. What is most relevant nowadays to the success of an artist are social networks and viral marketing. It also helps that for anybody tech-savvy and EVERYBODY under the age of 25, music is already free and easily accessible through P2P filesharing.

Please get in touch if you’d like more information or would like to get involved. Also thank you Pierre and Gillian for introducing Tubes to your readers.

Scott
scott@tubesmusic.com