This week we got the news that the highly acclaimed Artistdata has been acquired by Sonicbids. Many people reacted with mixed feelings, because Sonicbids doesn’t have a very good reputation. One of the people on the Q & A Forum about the deal phrased it this way: ‘I am really sad to hear this. Artistdata was truly amazing. My experiences of Sonicbids is they serve one purpose – to fleece naive bands of their finances.’
The reason for the acquisition are quite clear. After almost 4 years of work Artistdata grew to a user base of 25,000 musicians. Sonicbids has been active since 2000 and serves 245,000 artists. The situation is a rather simple: Artistdata has a good product, but a small user base, ergo limited resources and cash flow, Sonicbids has a bad product, a large user base and sufficient financial backings. They seem to be the perfect fit: Artistdata needs to grow faster, if they don’t want to go bankrupt, Sonicbids needs a better product, if they don’t want to loose their current flourishing business. The words of Artistdata founder Brenden Mulligan tell us enough: ‘Sonicbids has built a much larger company with a greater resource pool. If there is one regret I have about ArtistData it’s that we’ve moved slower than I would have liked because we didn’t have a ton of resources. Sonicbids brings a whole new approach to the table and our tools will get better and stronger.’
However, the fans of Artistdata feel insecure about or even betrayed by this evolution. The situation is very comparable with a popular indie band signing with a major record label. Majors have a bad reputation. They only think about the money and have been ripping of music lovers by selling overpriced CDs with bad song material. People have a similar opinion about Sonicbids ripping off naive musicians.
The founder of a popular start-up and a successful indie artist who only needs that one big push, are confronted with the same dilemma. Servers, a good development team, a sufficient marketing budget, on the one hand, or a good recording studio, a competent producer and the same marketing budget on the other hand, you need more resources than you have to make that really important, next big step. Artistdata has its core believers, makes some money with premium accounts, while most users will use the free version, but it is not enough to run the business. My own band Amatorski is the talk of the town in this small Belgium country, gets high rotation airplay on most radio stations, is selling its debut on Bandcamp and iTunes and in the retail shops, closed an advertising deal with mineral water Spa, but do you think this is enough to run the business? No, we are just starting and every penny we (will) earn must be reinvested in the growth of the band.
And on the other side, you see that big company with the big pockets, a major record company, or a venture capital fund or a leader in your industry. They may have a bad reputation, people say that they will screw you, you know that fans will be disappointed because you take a commercially driven decision, but you know that you need the money to fulfill your honest ambition. And you think: maybe they are not that bad at all, they are the only one who can help you in this phase of your career.
I am very curious about the future of Artistdata and about the fate of founder Brenden Mulligan as a new member of the Sonicbids team. Acquisitions are not always straightforward, because the money always comes with a price. iLike got acquired by MySpace almost a year ago. Apparently it grew too fast to fund its own growth. MySpace, wrestling with declining user interaction, came in with the money to save the new hip music service. iLike founders Ali and Hadi Partovi joined the MySpace/iLike team, but left only a couple of months later.
Is it really that difficult to collaborate with partners and bigger players if your only aim is: give the best services and tools to musicians? Important lessons to be learned, as I am now trying to grow the Motion Music Manager platform.
