The Future of Physical Music Collectibles in a Digital World

Jakob Wredstrøm

Downloads it to your computer and uploads it at the same time, which means I get full quality at the end, but it might affect the streaming quality. So you don't need to worry about it if it gets a bit grainy or anything like that. It is not going to affect the end product, if that makes sense. Yeah. Oh, great. Okay, good. We also use some pretty good noise suppression software, so you don't need to worry about if something happened in the background. And then there's really only one thing.

Jennifer Sullivan

Yep, I've used it. Yep.

Jennifer Sullivan

Great.

Jakob Wredstrøm

You need to remember doing the conversation. And this really defines whether or not it becomes a good conversation. That is, if I ask a question, that might be natural to give a long and detailed answer. Try to break that down so it becomes a discussion.

Jennifer Sullivan

Mm-hmm.

Jakob Wredstrøm

The longer the sections become without having any dialogue, the less engaging it is also for listeners. We have a lot of experience with that. So really that's really your only job tonight is like as yourself and talk about whatever you talk about, try to see if you can break it down into natural breaks so I can sort of intervene and ask a follow up question. Great.

Jennifer Sullivan

Yeah, that makes sense.

Jennifer Sullivan

Mm-hmm.

Jakob Wredstrøm

Yeah, I just want to, I don't want to butcher the name you say it. Is it KIT or is Kit?

Jennifer Sullivan

It's KIT. It stands for Keep in Touch. So it's Keep in Touch Better. It's a KIT album, a Keep in Touch album.

Jakob Wredstrøm

Okay, great. One thing that I really like to do, if possible, and I always try to take it that direction, but it's not always possible, is I'm Scandinavian and I'm Danish and I love the Nordic noir, which is basically how dark can you make it? So I always try to take the angle of the conflict of the...

Jennifer Sullivan

Yeah.

Jennifer Sullivan

See you

Jakob Wredstrøm

The things that doesn't work and I think for me a lot of the media, podcasting, news and music industry is very like headline based. And I think there's enough of that. So what I try to do is I try to take it from a darker, deeper angle. What often happens, it doesn't really become that dark or deep, but if I try to pull that direction,

Jennifer Sullivan

Mm.

Jakob Wredstrøm

It's a new perspective that people tend to appreciate, including myself. So as much as I can, I'll try to ask those questions. Just so you know.

Jennifer Sullivan

Yeah.

Jennifer Sullivan

That sounds great. I like the noir.

Jakob Wredstrøm

Yes. Do you have any questions? Anything you've been thinking about or?

Jennifer Sullivan

No, I'm excited to talk to you.

Jakob Wredstrøm

Great, love it. Well, the last things, if you have any devices, you can put it on Do Not Disturb. And then these episodes usually tend to go between 35 and 55 minutes. There's really no right or wrong. Normally the expert episodes like these become fairly like information dense. So they tend to be a tiny bit shorter. So, you know, around 40, 45 minutes. But again, there's no right and wrong.

Jennifer Sullivan

Mm-hmm. Yeah. I'm just gonna turn off my phone.

Jakob Wredstrøm

And then the very last thing and then I've talked enough is we tend to start the episode the same way and that is I do a very short introduction and when I mean say short very short and then I ask you Jennifer who are you and what do you do and then you introduce yourself a bit your role maybe your background as well that can be really relevant and then I'm going to ask about kit and then you can go more into the company and the product for a couple of minutes

Jennifer Sullivan

You're

Jakob Wredstrøm

And then basically what I'll do is I'll take a bit about the agenda I sent over, so a bit about your journey, bit about sort of understanding the kid and sort of solving these problems. But what I'll also do is I'll take opportunities to go down in the conversation where maybe the agenda isn't, but still within that general realm.

Jakob Wredstrøm

Great.

Jennifer Sullivan

Love it. I'm stop typing now. I'm turning things off, okay.

Jakob Wredstrøm

Good. Great. Well, you have everything you need? Water? Great. Perfect. Great, Jennifer. Then I will start in five seconds.

Jennifer Sullivan

Yeah.

Jakob Wredstrøm

Hey guys, welcome back to the Sound Conditions Podcast. Today we're gonna talk about something that I haven't seen for a while, but is immensely popular, especially in the East and now coming to the West. Jennifer, welcome to the podcast.

Jennifer Sullivan

Thank you so much. Thank you for having me.

Jakob Wredstrøm

Jennifer, I've been looking forward to this because I talk a lot with people on the podcast about monetization and basically trying to make more money as an artist. That's basically the base conversation of most of the industry. And kit is something that's quite innovative in the Western world that is sort of being launched into our markets. We'll cover that, but before we go into that, Jennifer, who are you and what do you do? Take her reply from take 2 which i have marked…

Jennifer Sullivan

You I'm Jennifer Sullivan. I'm CMO and President of North America for KitBetter and I lead marketing and business development for the Kit album format.

Jakob Wredstrøm

Interesting. What is that? What is Kid Album format?

Jennifer Sullivan

So Kid Album is a hybrid digital physical format that connects all of the best things about the physical world together with the digital world as it relates to music and entertainment and other media formats. It started in South Korea in 2012. Our company has been around for very long time connecting physical products that can be sold, especially started in the K-pop world. So, you know, K-pop fans are always looking for something to show their fandom. And we just started right in the heart of that. that industry. So connecting fans with something they can hold in their hands and then something they can experience digitally. In the kit album format now we've sold about 10 million albums worldwide and I'm excited to tell you all about that. Jakob Wredstrøm (06:10.912)... continue from here… Amazing. Throughout doing the podcast, I've gotten to think about myself almost more as an academia. And because I come from music, I also come from actual music, not just industry, but I also have a sort of like a bit distant relationship to music. I've covered this very briefly before we started where my interest in music really has been the infrastructure for a long time rather than the music in itself. And when it comes to this particular thing, like I grew up where CDs were, you know, big for me when I was 10 maybe, but like it sort of disappeared. And I've never had the relationship with the physical element of music really, because I my first relationship with really controlling my own music, you know, I had Swedish friends, so that was Spotify. Like that's where my music journey started. Maybe that will age me a bit, but,

Jennifer Sullivan

Mm-hmm.

Jennifer Sullivan

Hey.

Jakob Wredstrøm

I really don't know what it is, to be honest. I don't have any CDs, I don't have any LPs. I think I have maybe a few LPs. I got some for some friends. So for me, but guess also for a lot of the consumer generation, doesn't necessarily have a nostalgia about what the physical element of music is. Is that?

Jennifer Sullivan

Mmm.

Jennifer Sullivan

Yeah. I think that's true for the Asian markets too. Like they didn't really have a huge vinyl era. CDs were much more kind of their era and streaming. So, you know, and I think with K-pop we've seen, that's why we're seeing these kinds of what the physical experience can be. You know, I think you've grown up in an era, you're probably,

Jakob Wredstrøm

Yeah.

Jennifer Sullivan

Older than you, guess. You've grown up in an era where that feeling of collecting wasn't necessarily part of the music experience. But to me, that's always been the music business. The music business has always been about the physical, like having something to sell, at least the music part of it. You know, there's the experience, the concerts, the ticket sales, those sorts of things. That's a big part of how you make money as an artist. But the actual recorded music industry was always about selling a physical object. A vinyl record or a cassette or a CD, my feeling is that something happened over the decades that diminished the value of the physical collectible to the point that the consumer, the perspective of the consumer became that it wasn't a worthy investment. It was something that could be easily ripped onto a computer and then shared with friends. And so I think once that happened, there was a loss of control that the music industry had over their product. And so I think what we're seeing now with the rise of vinyl coming back is that there's something tangible, there's of value to the consumer to have something that feels like a piece of artwork. Something that's rare, something, you we're seeing like, you look at sneaker culture, you look at, all of these collector cultures, they come from a perceived value. It's, you know, a rareness, a scarcity, a, you know, a specialness, a connection to that brand or that artist. And I think what we're trying to do...

Jennifer Sullivan

Just like vinyl is create that feeling of, know, I'm willing to pay my good earned money for something that not only supports the artists that I believe in, but also gives me something. You know, at the end of the day, it's about giving consumers something that they can feel good about having and also make them evangelists for you in the long term. Because we're not seeing the same kinds of icons and legendary artists that we once saw. I think a lot of that has to do with there's less permanence and physical media gives you something more permanent to hold on to. And especially whenever you put your money into it. Know, when you invest in something, when you invest in an artist with the purchase of a vinyl or the purchase of a kit album, you're showing not only the artists that you care, but also all of

Jakob Wredstrøm

Hmm.

Jennifer Sullivan

The other fans in the community that you're a part of.

Jakob Wredstrøm

I'm probably going to butcher the actual numbers, but the last studies I've been sort of reading about vinyl, especially out of Germany, because I think that's a quite interesting market because it's still quite physical, is around 50 % of the purchases don't really play the And it's sort of becoming this sort of collector's item, as you say, but I also think there's an element of psychological need for the real. You know, we've talked a lot about this, about the podcast, but as technology, AI, is making the discernment of what is real, not real, really, really difficult. I think this relationship to things matters culturally for a whole population a bit more. I've been very forward leaning AI for quite a while. I today for the first, I use TikTok a lot because that's sort of where I get a lot of exposure to things. And today for the first time, first time I saw a video a few times and I like this is a weird video and it was only the fourth time they realized it was AI and like I have an eye for this like I really have an eye for this and I was fooled and this was the first time I was actually fooled and like I see it so much in my own consumer behavior like I'm shying away for the digital like that the pure digital behavior a bit and like re-evaluating where am I putting my time, energy and money. And I think that's also, I guess, what we're seeing as a movement with the physical.

Jennifer Sullivan

Absolutely. And it's interesting, Luminate shared some research at MusicBiz this year about that stat that you cited about the ownership of a vinyl record player. And it was very generational. Was something like millennials are the 50%. But as you get older, the Gen X and Boomers, they are more on the 70 to 80 % ownership. What was most interesting to me, though, was that Gen Z has something like 60 something percent. So there's actually, you know, kind of a resurgence that's happening with this younger age group, which is really interesting.

Jakob Wredstrøm

Okay.

Jakob Wredstrøm

It is interesting. You said something very interesting that I would love to sort of get a bit into. You said that career, for example, didn't have that vinyl relationship either. And sort of the adaptation of fan behavior, which the East is very famous for as of right now, was something that maybe happened. With a bit less of a gap than what we have seen in the West, could you describe it a bit more? Like, what was it actually that happened, let's say 10, 15 years ago, that we did not experience over on our side of the world?

Jennifer Sullivan

Yeah, well, I think, you know, what's happening is, you know, K-pop became a cultural movement, Japanese pop as well. I mean, there's been these movements that have happened with... you know, types of artists. Think idol creation was something that happened and that really turned into a business model. You know, I think you saw more traditional music. You saw more of the kind of, you know, localized music before that. And as the West came in to the market, as hip hop was introduced, you started to see these artists emerge. It wasn't necessarily K-pop to start. It was hip hop. Was all of these other genres. Rock, you know, now J-rock is becoming so huge, but that's because there was such an influence and inspiration from the West. So again, I think it's all kind of cultures blending together. Seeing it's, you if you listen to a K-pop song today, it'll have Afro beats, it'll have Latin influences, it'll have music from all over the world. And that's, I think, really exciting and interesting. And I think that's what's happening with the technology as well, with the formats, the media formats.

Jakob Wredstrøm

Hmm. I heard this talk, I guess like two or three years ago from a sort of very senior marketing director at a big Korean music company. And they talked about how they sort of think about breaking artists. And he said something incredibly interesting that I've really been thinking about since is when they as a major company major, they're the biggest there. They don't think about, this scale? Then think about, can we win this niche? It's like how deep in a relationship with a certain group of audience can we go? And that's basically their strategy, which is, know, at least if you looked at the West three years ago, that was fundamentally opposite of what was going on. And one of my worries in that statement is like,

Jennifer Sullivan

Mm-hmm.

Jakob Wredstrøm

That's not a model you can just replicate. There's a lot of consumer distance to such a model. But are we seeing a shift now? Are we seeing that getting more possible in the West now?

Jennifer Sullivan

Absolutely. I mean, I think that there's more adoption of, you know, I think on one hand, the pendulum has swung to trying to create a business so much so that there's manipulation and there's a little bit too much control of businesses and corporate entities that are, you know, making sure that they can, you see manipulation of algorithms and all of that. Now it's become a game. I think in the West,

Jakob Wredstrøm

Hmm.

Jakob Wredstrøm

Yeah.

Jennifer Sullivan

I believe that artists are more relevant to fans if they are authentic and they're their authentic selves and they come with their lived experience and their stories and all of that. I think what we're seeing more. Focus on authenticity as AI and all of these other technologies emerge and you know, it becomes harder to discern between reality and something that's manufactured or something that's been manipulated or produced.

Jakob Wredstrøm

Mm.

Jakob Wredstrøm

This is just a commentary, it's not a part of the interview. When we stop the interview, I'm gonna redo the actual intro, and then we're gonna talk a bit about the actual physical device, because I'm just realizing as we're talking, we need to set that scene.

Jennifer Sullivan

Yeah, so will it be video as well as audio and I can show? Okay.

Jakob Wredstrøm

Yeah, yeah. So I just, think, you know, just because I was thinking about it that I didn't want you to think about it either. What we do before, you know, when we're with the interview, I'll just make a new intro and where I will describe and maybe you will supplement a product description for the people who haven't, you know, gone in and seen it themselves that they create this sort of picture in their mind. I just realized that while we talking.

Jennifer Sullivan

Yes.

Jennifer Sullivan

Yeah, no, that's great. I can do that.

Jakob Wredstrøm

Cool, I'll return to the interview though. So now you're of launching Kit in the West and in America where you're of your president. And one of my big skepticisms, which might not be true, is like, is it too early to adapt that cultural aspect of buying physical things, of having these sort of social interactions, collectibles? Do you think we're ready at scale to do that in this part of the world?

Jennifer Sullivan

I think we need to stop assuming and apologizing for trying to build a business around an artist. I think every artist is different. I think it's typical, right? It's, you know, we're afraid of...

Jakob Wredstrøm

Yeah.

Jennifer Sullivan

Annoying the streaming services or afraid that people aren't going to adopt it. You know, they have to learn how to do everything. Know, technologies are always emerging. Think, you know, introducing something new to fans is exciting. And, you know, I come from consumer products. I come from retail marketing and This is the game. If you want to be a business and you want to have fans and you want them to be excited about you, you need to find out ways to build that fandom. And giving them something of value is priority number one. Giving them a great experience, whether that's a physical product, whether that's a great show, whether that's messages on your social media. I think we've focused way too heavily on manipulating numbers and making it all about the number of streams you have or the number of followers you have. I think if this is a business, it needs to be about finding ways, paths to revenue and meaningful revenue. And that's what the music business was built on. You know, we have lost generations. I mean, we've lost a decade, two decades of... moving towards a model that's not as sustainable, especially for working musicians and emerging musicians. It really sets us back. It dilutes the playing field. On one hand, it democratizes it, streaming and these platforms make it possible for my 10 year old nephew to release his music on Spotify, which is awesome. And he can be discovered and become the next Justin Bieber, who knows. But those days are going to be

Jakob Wredstrøm

Hmm.

Jennifer Sullivan

Less and less. So these creating something that's tangible, think is going to be, you know, there's going to be a select group of artists that do it. You know, not every artist is meant for this. Not every artist is building that kind of community. But I think the artists that are seeking a lasting connection and a lifelong career with their and connection with their fans will embrace this kind of technology.

Jakob Wredstrøm

Hmm. Because sort of my honest emotion about sort of fan platforms, direct to fan, merchandise, all these kind of things comes a lot from my experience within the indie world. Like even though I've been very much focused on startups, I've had always a foot in the independent music scene. And for example, there's one band that I help. I wouldn't call me a manager, but I'm not charging money for it either because it wouldn't make sense for me. But like I'm helping them and they, you know, sell out shows, you know. Thousand cap shows like really popular certain places of this part of Norway and doing well and Just running the numbers and some of the things we're doing is just it's so depressing like even you know merchandise You know it costs having good merchandise cost for $40 per piece just to produce it and then we can sell it for 55

Jennifer Sullivan

Hmm.

Jakob Wredstrøm

Like it's, the margins are so slim and the shows in order to give the fans the experience that they come from are so incredibly expensive that, know, we need to sell 600 tickets just to break even. And for me, like there's been almost this sort of depressive relationship with the current status of the music industry as production costs are rising, as fuel costs are rising, as infrastructure costs are rising and not necessarily the willingness to pay for tickets on like a, you usual

Jennifer Sullivan

All

Jakob Wredstrøm

Consumer level. And the lack of monetization is just incredibly evident. And then the thing about that maybe the cultural adaptation to, let's say, techniques that has worked in the East just isn't coming at a pace that's tangible, has been the depressive part. So I think we all agree that we're longing for ways to actually make money, actually add margins on top of the current activities. And solutions like these, kit, vinyl, how do see it moving in consumer behavior? How do you see it actually contributing to the current status quo?

Jennifer Sullivan

So two things that I'll unpack. Number one, our format doesn't have any minimums for artists. So any artist can upload their music, their videos, your artists can upload their music and videos to our website and create an audio visual album experience for free and make that available to their fans on our website. That's no inventory, no cost upfront. That is all revenue. Our minimum order is like 30 units. So, and that starts at $9. It goes down to like $7 once you get to 300 units. It's affordable for most people, let alone artists. And they can make, you know, they can sell their products for $20 a piece and make, you know, $13 per album sold. That's a real business with a low minimum, you know, low inventory requirement. In terms of the, repeat the second part of the question.

Jakob Wredstrøm

Well, it's just how it will impact the economy of the independent touring artist.

Jennifer Sullivan

Yeah, I mean, COVID was extraordinarily damaging to independent music. Not only were artists not able to tour, a lot of venues had to shutter because of their lost revenues and not being able to pay rent. No understanding of what the future held for live events and live experiences. That's not come back. I mean, it's starting to come back, but a lot of places we lost and that... really damaged emerging artists more than anyone because those were the places that they would go to gig, to perform. I think we're seeing more non-traditional types of venues opening, restaurants and record stores and you know, any place an artist can gig and get in front of an audience. I think that's gonna come back. I think there's been just a shift though. Watched as music was taken off of TikTok. For a business negotiation. And a lot of artists then were also worried that they weren't going to have their audience anymore. And we faced a ban in the United States with TikTok where artists were spending all of their time and energy trying to build their communities. And at the whim of some corporations, they could lose that audience. So I think, again, we need a return to... building community in your town, your community, touring, all of the things, doing the work as an artist. I think it's very difficult. I was an opera singer, I was a music teacher. I came from music and I had a really hard time in the late 90s trying to do that as a career and I ended up as a marketer. I think it's a lot of luck, it's a lot of resources.

Jennifer Sullivan

You know, if you have wealthy family, if you have a patron, if you have, I do believe in crowdsourcing. I do believe in building businesses that are based on, you know, leveraging your community and getting them to support you in some way, whether that's buying merchandise or just paying for your daily updates. There's going to be more of that. I believe that the future is going to be more about creating ways for people to support you, giving people a reason to care about you and support you.

Jakob Wredstrøm

I'm curious about the word support because I have some conflicting emotions to what that means. The way that I see the word support is that there's a charity element to it and I might just be misinterpreting the word. Which for me is... both necessary and I understand that's a part of the at least the growing independent culture, but also very conflicting when it comes to the effort, energy and the business is trying to set up. Like how do you associate that word support?

Jennifer Sullivan

Charity is giving and not expecting anything in return. I think that patronship is about supporting, but also getting something in return, getting some kind of value out of that relationship. It's an investment. And I think that what artists need are investors. Need

Jakob Wredstrøm

Hmm.

Jennifer Sullivan

Patrons need support from their fans. Otherwise, it's not a business. It's a hobby, you know, which is fine. There's plenty of musicians in the world that perform for fun and you know, because they love it, because they're good at it. But I think that the business is figuring out your audience and developing something of value that they're willing to pay for.

Jakob Wredstrøm

What do you think, this is maybe a cheeky question, and I don't know exactly where going with it, like, an artist that wants to sort of monetize the relationship with their fans, does it make sense to sort of leverage the emotion of support rather than, you know, purely like value exchange as you were growing? Like how big a part does that count in the business strategy of an independent artist, for example?

Jennifer Sullivan

Yeah, I guess, are you asking, is it important for artists to understand that they're asking for money or asking for some kind of...

Jakob Wredstrøm

No, like the conscious playing on emotions that there is this, you know, you also supporting me as you get some benefit rather than this is like a...

Jennifer Sullivan

I don't think it's that cynical. Think you're being cynical. I honestly, I think it's more about artists being themselves and, you creating. And once they've created something, you know, starting with the creation, starting with something that's real, authentic, true. And then, you know, it's not even necessarily an artist. It's their manager. It's their friends. It's their family, whatever, you know, helping them to do that as their career. Need, know, there are countries around the world that support artists, that they can get grants, they can get, there's other ways to do it. It's not just always about fan support. I think in markets like USA, we need support from fans. Need, there is, is really, it's very, very difficult to be a professional musician without having a community of fans that are there that will pay for the tickets to your shows that will show up and purchase your merchandise that will share that they're a fan as well. Mean, there's a lot of value and there's a marketing value that comes from having fans as well. So it's not just all dollars. It's also shares and likes and all of those other things that, again, I don't know they will be as important in the future as a paycheck.

Jakob Wredstrøm

Thank

Jennifer Sullivan

I think artists need to have some kind of living wage. And, you know, I'm also seeing like there's some really interesting seismic shifts that are happening in the label artist relationship. Know, Chappell Rhone went public and talked about how, you know, there's no healthcare, there's no support system for artists. And that actually started a conversation that has given artists some power. And I think they need to take back their power.

Jakob Wredstrøm

Okay.

Jennifer Sullivan

And not be afraid to ask. I did a TEDx talk in 2013. I referenced Amanda Palmer, who did a TED talk about the art of asking. And she talked about how being a street performer, being a busker, taught her everything she needed to know about the music industry. And I think that's so powerful. Was such a future forward perspective on where we are now.

Jakob Wredstrøm

Hmm

Jakob Wredstrøm

I think that's incredibly interesting. Think that's, as we were talking, I was reflecting about my own emotions because intellectually I follow everything you say and some somewhere in my emotional life, I'm like, I'm somewhat like being a bit reluctant or resistant to arguments. And I was trying to figure out like, why? Like, why is that? Because, you know, I believe in everything you say. I don't disagree to one shred of it, but why am I feeling this reluctance? And I was thinking about sort of, studied music at the conservatory and I've grown up in a culture with music as this very pure expression of oneself and the lack of business mindset. Was somewhat appreciated, maybe not outspoken, but culturally. The pure devotion of art and the pure sacrifice and negligence of your own financials was somewhat comparable to how great a Nazis you were, or how dedicated you were to your music. And I think that's just, to some degree, even though I understand that the pure aspect of it, but I also think that's one of the core aspects of why it's been so toxic to

Jennifer Sullivan

Struggling artist.

Jakob Wredstrøm

Well, this is the detox right and why has it been these talks it is because there's been an appreciation of the opposite of livelihood

Jennifer Sullivan

Well, I came from brand marketing and partnering with artists and there was an era there's you know, a good amount of time that I spent talking about selling out and how artists would feel like if they were doing a commercial campaign or how their music synced in a in an advertisement that somehow they'd, you know, sold out. And, you know, there's a great Henry Rollins video that you can look up on YouTube where he talks about you know, somebody giving him some grief about having, you know, a song being a commercial. He's like, do you realize that is not only supporting artists and giving artists some money for their work, it's also introducing people to that music. You know, that's also opening up doors for that artist. And, you know, that may create the next, your next most passionate fan. So it's, you know, I think the, the era of, you and I hip hop and a lot of other genres have now kind of embraced brand partnerships and, kind of the sponsorship, you know, credibility, you know, like you're big enough to have a commercial campaign with Nike. You're a big enough to have a commercial campaign with Hasbro. You know, it doesn't matter what brand it's, you know, wow, you're getting your money. You know, there's something that you're doing right because people care enough and your music is good enough to be on that level of a scale. It's still genre specific. There's still artists that will, you would think would be very opposed to being diluted or having their credibility diluted in some way by having their music used in a television show or whatever. But again, you know, this is the business side. There's the art side of art. You know, I'm an artist. I'm a musician myself. You know, I know I do it because I love it and I'm good at it and I make some money when I do it, but I can't pay my bills that way. I think there are artists, I think artists that want to be professional artists need to find a way, whether that's constant touring, whether that's merchandise, whether that's endorsement deals, sponsorships, all of these business models, those are all part of the toolbox to be a professional artist today.

Jennifer Sullivan

It's always been that way. It's either been that or you become part of a label deal or you sign up for something else, but those have also proven to be really challenging because then you're at the mercy of those entities that have control over your marketing, over your positioning, over your music itself. But even that is changing. Think artists have so much more control over their own audiences.

Jakob Wredstrøm

Mm.

Jennifer Sullivan

The label relationship I think is becoming more about the marketing and more about the support so that the artist doesn't need to focus on that. The artist focuses on being themselves and then there's the business and the business is responsible for everything else. Just when you're starting out, you're everything. When you're starting out as an artist, you really need to think about every aspect of how you're.

Jakob Wredstrøm

Okay.

Jennifer Sullivan

Engaging how you're communicating with your audience, all of the different platforms and tools that you have at your disposal. And that's why I like the idea of a physical product that is democratized, that is something that an artist can produce and make available to their loyal fans. They don't need to have thousands of fans. They can have 50 really good fans that are willing to support them and own a piece of their journey. And give them something that will help them pay for their next recording session or help them pay for their studio musicians or all of the other things that they, their food, putting food on the table.

Jakob Wredstrøm

Mm. We sort of covered this a bit early in the talk, but I would love to have some clarification on it. The company you work for and not very central in has existed for a while. And obviously, you know, the whole movement towards fandom and products, physical products has been going on for a while. Like why is it now that you guys are entering art? Like what is it in the market movements? What is it that has deemed this a good time to do it? What are the signals you're reading that makes this a good investment?

Jennifer Sullivan

Ownership has become really important to people. People want to feel like they own their music, that they have something that's more tangible. You know, when you have a subscription for a platform, you're basically renting access to your favorite artists. You're not owning anything. So I think that's a big... aspect of this. Think culturally where we are in the world, I'm a marketing futurist, so I think about not just the product that I'm marketing, but also the world and the environment and our society and all the things that are happening. And I think it's comfort. I think that people are seeking something that they can hold onto. I think it's also about building community. So with our product, which I'll show you, we have something that you can actually hold in your hand. So it's a collectible. But this is actually like a little key chain. So you can show people that you're part of this tribe. It's tribalism, it's ownership, and I think it's emotional. I think it's something that's comforting for people. To feel like they're connected not only to their favorite artists, but to a community of people.

Jakob Wredstrøm

Do you believe that the companies come in as a part of the educational wave or is now early in the wave that's all you've created? Like where do you place yourself in that sort of adaptation scale? Is it the early adopters you're going into now or are you a bit later than that?

Jennifer Sullivan

It really depends. Our marketing efforts so far have just been releasing music and working with artists and having the artists communicate to their fans about why they've done this project and why they're creating an album experience. I think that is. Basically what we're trying to create our album experiences. And I think with MTV, with video, with all of the audio visual aspects of music now, it's fashion, it's not just audio. I think we're uniquely positioned for artists to be able to give their fans something that's a more complete vision for their music. That's the, you know, kind of... manifestation of their creative vision in a project rather than just a single, rather than just a clip that they can use in a TikTok or whatever.

Jakob Wredstrøm

But is there like, is there indicators already now that this is something that the market is ready for? Is there reluctance? Like what sort of educational journey towards consumers do you expect to go into?

Jennifer Sullivan

The market is ready for anything. I think that the idea of the market not being able to understand or embrace something is, of course, there are people that will resist anything new. You know, it's habit forming. It's something that you need to, you know, educate people on how it works, all of those things. But that happens every day. And I think with technology moving as fast as it is, we're so used to new things. We're so used to embracing things, things that exist today didn't exist two years ago. Mean, there are, you know, technologies that exist. So I don't think, I don't think we can underestimate the intelligence of the market and the hunger of the market for something. Lububus are like the biggest thing in the world right now. Why? Nobody knows. They're cute, they're random, but you know, again, like, did Pop Mart worry that the market wasn't ready for something like that? No, they created something because it was interesting. It was something they put into the universe and the universe embraced it. Yeah. I've worked 25 years in marketing and launching products for companies like McDonald's and Hasbro and Intel and Logitech. And every time you launch a new product, there's always a concern that the market isn't going to embrace it. But there's always a niche. I think niche is what the world is about now. It's finding your tribe, finding your fan base, and allowing that to kind of... build into something bigger. It doesn't need to be everyone.

Jakob Wredstrøm

I guess that might also just, you know, from a startup perspective, even though your company really isn't a startup, but maybe it's a startup environment in a new area. Like, one of the aspects that companies... rarely has luxury of is weathering the storm for a while. But now you might have that because you have this whole history, you have this whole traction and supposedly also finances to say, if it even takes some time, we're still gonna be here. And that's the insecurity a lot of companies need to go through if they try something similar.

Jennifer Sullivan

Mm.

Jennifer Sullivan

Yeah.

Jennifer Sullivan

Yeah.

Jennifer Sullivan

Absolutely. North America is definitely a startup for us. Like we are starting up in North America. However, we've sold 10 million albums worldwide. We work with Seventeen, we work with Blackpink, we work with Monsta X, we've worked with SM Entertainment, YG Entertainment. Mean, like all of the biggest, you know, these are huge companies and these are not small...

Jakob Wredstrøm

Yes.

Jennifer Sullivan

Releases I these are these are gigantic releases and not only released in Korea. They are there sales in 200 countries worldwide So we are we are selling a lot of product. We're doing very well and we've been doing it for now You know a decade. I mean we have 26 patents on our technology. We're not operating from a position of weakness You know, we know what the challenges are in educating a new market, but we also have plenty of artists that are really excited about this and see its potential. And it took time to grow in. Korea as well. I we've evolved our technology. Started as NFC technology, which was very basic, you know, kind of just a tag that could connect from a card to your phone. And then we did, we even had a device that plugged into the headphone jack of the phone at one point called a keynote, which was great. But then all of the device manufacturers did away with the headphone jacks. And so we created a Sonic technology. So we have an ultrasonic technology. There's a little button at the top of this. When you click it, it emits an ultrasonic sound that unlocks the content on your phone, meaning that we don't rely on NFC. We don't rely on Bluetooth. All that you need is a microphone. And so now our product works with tablets, with head mounted displays. When everyone goes to VR in the future, just like Ready Player One, we're ready for that. You'll get to experience your kit album and in VR. So yeah, we're trying to continue to be future proof. I say, you we're kit better. We're always looking at what could be better, always improving our app, always improving our physical products. So, you know, I think that adaptability and flexibility is what will help us to be competitive. And, you know, it'll help us to achieve things in other markets as well.

Jakob Wredstrøm

Hmm. It's very interesting and I'm a very pragmatic guy. And one of the things that sort of excites me in this conversation might be a bit different than what you, for example, with your marketing brain are excited about. And that is really for me the price tag. And let me explain why. Because sales are happening. Merchandise, vinyl, other similar experiences. But the margins are incredibly slim.

Jennifer Sullivan

Hmm.

Jakob Wredstrøm

So that's also why, you know, I was talking about, you know, vinyl, for example, the band I help. There's really only one vinyl plant in Norway, for example. All of Norway there's one vinyl plant and you want to buy it for them for several reasons or you can go to Poland. But like if you want to buy it locally, which is a great story, it's 45 US dollars per print.

Jennifer Sullivan

Mm.

Jakob Wredstrøm

Just to pay that. And how much can you sell it for? Maybe $55? So it just becomes symbolic, like everything else. And even if you order for Poland, maybe it's half price, but the upfront cost and the time it takes to make it, it's so tedious. Was even getting an email yesterday from the band, like, hey, we need to do some more vinyl prints. Like, freak, that process is so terrible. And I hate it so much, but I'll do it. For me, the price point is what really

Jennifer Sullivan

You

Jakob Wredstrøm

Excites me because I can see from a consumer behavior without knowing it in full that the value could be really interesting. It can have the same sort of sentimental value as a vinyl mod have in a different maybe interesting format. The price point of which you can engage with it is fundamentally different and that for me is really the pragmatic excitement I get, if that makes sense.

Jennifer Sullivan

Hmm.

Jennifer Sullivan

Yeah. And it's also quality. It's you know, we're delivering photo cards and stickers and buttons and all of these different things that the fans just depending on the artists, little booklets. We did an album with Duran that was a it was a little bit more expensive. It was like thirty nine ninety nine. Again, still less expensive than vinyl. A lot of vinyl comes in a coffin shaped box with all covers of spooky songs by Duran. They're covering Billie Eilish and Susie the Banshees and other artists, but it comes with a 22 page booklet and photo cards and a pin and I mean all kinds of things for fans. It's almost like unboxing something. We talk about unboxing videos. This is blind box, I guess is what I'm referring to. If you think about blind box fashion, like Labooboo's. Labooboo is popular because you buy it. like sight unseen, you don't know which la boo you're getting. Y ou just buy the box, you open it up and it's a surprise. And that's almost like it's chosen you. I think for fans, when they open a box and they know they're getting the album, they know they're getting the music, but then they find out that they're also getting all of these other things together with the videos. you know, sometimes it's behind the scenes movies and shout outs and all of these other things. It's, I think that... then makes people become ambassadors and evangelists for not just the artist, but also the experience that they've had. So that's something that I think is exciting. It's a valuable value experience, if that makes sense. It doesn't cost you a lot, but the ticket to entry, you under price and over deliver.

Jakob Wredstrøm

You

Jakob Wredstrøm

Amazing. Well, it's good. Jennifer, it's been a pleasure talking to you and hearing about Kit. And I am constantly looking for ways to be encouraged because I default to the dark. And I also described that before and also sort of my output.

Jennifer Sullivan

Honestly, I am as much as everyone thinks I'm the glass half full, I'm really not. I really do look at things from a very cynical perspective and I think that's what makes you a good marketer. That's probably when you think as an entrepreneur and look at the biggest challenges that you have ahead of you, think that sets you up for success more than anything.

Jakob Wredstrøm

I agree and even though that can be difficult, sort of maybe always having that mindset, I think that's the price you pay. Jennifer, it's been brilliant and I'm looking so much forward to this and I get very excited as you talk about it. I still have this hope of adaptation of Eastern consumer culture. I know it's not going to be equivalent or the same. It's not going to be exactly the same. But the financial impact it can have on niche interactions or communities or engagement needs to happen in order for this to have my personal interest again. Like I have lust. I have lust the financial interest of the artist economy as of now. I just have lost it and I'm looking for opportunities to regain that hope because I do want to be there. I just don't want to not make anything.

Jennifer Sullivan

Hmm?

Jakob Wredstrøm

And I hope that initiatives like this, not initiatives, but products or consumer changes like this would be a contributing factor into regaining momentum again. And I think that's beautiful with KIT.

Jennifer Sullivan

Yeah. Yes. Thank you, I hope so too. I think it really gives me personal joy to help fans find new ways to experience artists, especially fans that have never experienced a physical, collectible type of experience with an artist. Know, going to a show and having the artist sign something for you, their music. Think that's a meaningful thing, you know, that's something that you'll remember for the rest of your life. You'll stay connected with that artist forever. I think, you know, if we're just equating success in music to the number of streams, the number of followers, those sorts of things. That's a race to the bottom. That is not how you build a business. And that's not how you really connect with people in the long term. You know, and I don't think products are for everyone. Think not everyone wants a collection of things. You can see from my house that I collect lots of things. You know, I'm that kind of person. But I, I do think that support for artists and, know, giving people a reason to purchase, giving them something that's exclusive or something that they won't see anywhere else is a fine way of marketing and building a business.

Jakob Wredstrøm

Hmm Jennifer it's been a pleasure. Thank you so much for being on the podcast and I wish you the best with

Jennifer Sullivan

Thank you so much. Thank you for having me.

Jakob Wredstrøm

Great, stopping the recording. ……………………………………………………………………………………………… THERE WAS A TAKE 2 (this will be added)

Jakob Wredstrøm

See if my videos can match that it's become a bit darker. Let's see.

Jakob Wredstrøm

Just let me know what the phone is on.

Jennifer Sullivan

Give it one second.

Jakob Wredstrøm

Have you always been in LA?

Jennifer Sullivan

No, I'm from Pennsylvania, originally. I'm from Pittsburgh, Pennsylvania. But like I said, I was an opera singer, so it's on. We're good. I was an opera singer. I went to graduate school for opera and moved to LA thinking that I would be a...

Jakob Wredstrøm

Yeah, great.

Jennifer Sullivan

Voiceover actor or an opera singer. And my first job in Los Angeles was with the company that invented the Happy Meal toys for McDonald's. And I didn't know that was an actual job. And I spent, I mean, even to this day, I've, you know, I've had a connection to the McDonald's Happy Meal program for some reason, helping them figure out cool properties and things to tap into. But yeah.

Jakob Wredstrøm

You

Jennifer Sullivan

So, but I was at Carnegie Mellon when they started their entertainment technology program. And I, lot of my friends went into, they were, you know, engineers and they went into the video game industry and entertainment technology has kind of been my through line. Music has always been a part of everything that I do. I had a music magazine at my last company and, and the magazine also covered technologies, which is how I found Kit. So, yeah, okay. We're good.

Jakob Wredstrøm

Mm-hmm.

Jakob Wredstrøm

Yep, that's great. Amazing. Okay, so I'll ask you, what are you and what do you do? So this will be from like the very beginning. And then I'll actually ask you about kit, then maybe you even describe it for us. That's sort of how I'm gonna do it. Okay. So Jennifer, who are you and what do you do?

Jennifer Sullivan

I'm Jennifer Sullivan. I'm Chief Marketing Officer and President of North America for KitBetter, where I lead marketing and business development for the Kit album format.

Jakob Wredstrøm

To talk a lot about KID today and I think maybe it's time to describe to them what KID is and maybe you even have something you'd show us. You know most listeners are in video so they can understand this product.

Jennifer Sullivan

Absolutely. Yeah, so I found the kit album at the Consumer Electronics Show in Vegas a couple of years ago, and I hadn't heard of it before. I was looking for trends and things that were emerging technologies that I could share with the clients that I was working with at my agency. And I immediately felt like this was Hit Clips, which was a product in the 90s that was very, popular. Was a Hasbro product and I was consulting for Hasbro, it reminded me of Hit Clips. And when I learned that this was a physical format that connected to the digital world, I was intrigued. So essentially our company started in 2012, KitBetter started in 2012 with NFC technology. And NFC, as you know, is used for Apple Pay, connects your device using an NFC reader. Our technology over the past decade has evolved. So we started with NFC. We still manufacture some NFC products, but what we use is ultrasonic technology. So it's ultrasonic NFC. UNFC is what we call it. It's a patented technology that uses just the microphone on any smart device to connect a physical product to a digital experience. And it's an audio visual digital experience. So a kit album, it actually stands for

Jakob Wredstrøm

Interesting.

Jennifer Sullivan

Keep in Touch, KIT stands for Keep in Touch, so it's a Keep in Touch album. It is something you can hold in your hands. It's something tangible that you can collect, that an artist can sell, which is more profitable for artists in the era of streaming. But it also provides something of value. So I'll show you, I have a kit album right here. So this is our standard format. We call it the Jewel Box. Jewel Box comes with things inside. So you open up the Jewel Box and inside, I'm gonna show you, you not only get photo cards, which we started in K-pop. So K-pop obviously is very big into collecting and showing fandom. Having little collector cards and things like that. But this is the kit device. So every kit album, depending on the format, regardless of the format, comes with the kit device. And this is essentially a little speaker. So I know we're tech nerds here. Can tell you that there's a little speaker inside of this that emits an ultrasonic sound that communicates to any smart device that this is Jennifer's album. So this isn't just...

Jakob Wredstrøm

Mm-hmm.

Jennifer Sullivan

The album of this artist. This isn't just this particular version of the album. This is my personal album. It's a one-to-one connection. And I'll tell you in a second why that's important, but I'll show you a quick demo. So this is my kit player. So this is an app on my phone. This does work with artists' apps as well. So we just released an album with Jisoo from Blackpink. She has her own app. She's one of those larger artists. She has her own app. We work with her app as well, but I like this because it kind of brings us back to iTunes where you have your kind of digital library. So I have my physical product. I have the product that I can put on my shelf, but then I have my kit, which is this little device. You hold it next to the microphone on your phone like this, and it unlocks the album. I'm going to turn off the music for a second. It brings up the lyrics.

Jakob Wredstrøm

Mm.

Jennifer Sullivan

To the song. So if I want, can sing along. We do for some artists, we accept stems so we can actually do karaoke mode. So if you want to sing along with your song, can. We also have all the videos all in one place. So again, like artists are creating audio visual albums now, you know, these visual experiences rather than send them off to YouTube and off to Spotify and off to other platforms. It's all in one place. And that's important because we are also able to see

Jakob Wredstrøm

Amazing.

Jennifer Sullivan

Post-sale data, which is something that doesn't exist for any other physical format. So if you sell a CD or you sell a vinyl, you have a one-way relationship with that fan. Just like any other consumer product, with a physical digital hybrid product, you're actually benefiting from digital insights. So you get information about the fan's engagement. So I can see that Jennifer is checking out my pictures. I can tell that Jennifer is listening to this track.

Jakob Wredstrøm

You

Jennifer Sullivan

A ridiculous amount of times. That must be my most popular track. Maybe I should release that as my single. There's a lot of information that they can get. And then there's a fan community as well. So the fan community section, I think is also something that as we develop as a platform, this is going to be the most important piece of the experience is where fans can actually connect with each other. These are fans that actually own the product. So it's a subset of super fans that are able to kind of come together and share their fandom. But the beautiful thing about this product is that it is affordable. We don't cost anything for artists to release on our platform. Any artist can put their music up on our website, their music, their videos, their photos, create a kit album without any upfront costs and make it available on kitbetter.com. Also, we ship to 200 countries worldwide. And our minimum order quantity for artists, especially independent artists that are just getting started, is only 30. So where other formats have much higher minimum order quantities, we start at just 30 because we want to make this an affordable way for artists to give something of value to their fans.

Jakob Wredstrøm

Amazing, that really sets the scene for the conversation today. It was really good to get that visualization. That's perfect, that's perfect, great. That's great, that was amazing. It was also really good for me to see, like I think...

Jennifer Sullivan

Was it too long? Feel like it. Okay.

Jennifer Sullivan

Yeah. I'll show you, like we have also done, I don't know if it's worth including, but we've also done with Snoop Dogg. This is the Snoop Dogg kit album. So this was done for a 30th anniversary of Death Row Records. The piece de resistance with this is that it actually folds into a dog house. This is his doggy style album. And inside it comes with a comic book that includes You can see like Suge Knight credited, beautiful little comic book there. There's Dr. Dre's notes from the studio, comes with a coaster, comes with a Death Row Records sticker, has a patch included with a little carabiner that then you can put on your kit album. And you can take it around and show people and you're the best fan of Snoop Dogg.

Jakob Wredstrøm

You

Jakob Wredstrøm

I it. We're definitely editing that in somehow. Okay, great. There'll be some editing work, but I'm sure they're gonna figure that out. Amazing. This is great. I really hope you guys succeed. Like, I...

Jennifer Sullivan

Okay, good.

Jennifer Sullivan

Great. Thank you.

Jakob Wredstrøm

I've been longing for a product like this to show up, honestly speaking. I don't want to speak anything down, but I've been very little inspired by a lot of solutions out there, especially those that are full digital of nature. And it's not that I don't believe in those. I still have a hard time understanding fully the full digital ownership experience. And I understand that it exists. Also understand that I might be more part of it than I believe. But for the emotional adaptation, and maybe transformation that I believe I need in order to really buy into something still lacks from that concept. And I get excited seeing that. I know my dad-in-law grew up loving that experience. I've never experienced it myself, but I could see a scenario where I would love to do something like that myself. And that for me is refreshing. Great. Maybe they'll edit that in as well.

Jennifer Sullivan

Great. I love that. No, I love that. Please, please endorse, endorse. No, I think, you know, that, like I said, I think that this idea of the value proposition of digital music alone isn't, you know, that's something that you now can get for free, but having a physical experience and a digital experience at the same time, think finding that common ground or the middle ground where it's the best of both worlds, I call it the physical.

Jakob Wredstrøm

Okay.

Jennifer Sullivan

Physical, what did I call it? It's a physical media for the digital world. So physical media for the digital world. It's something that benefits from the physical world, something that you can hold in your hands, something that gives you something of value, but then it's all of the value of the digital world, which is insights and analytics and everything else.

Jakob Wredstrøm

Mm-hmm.

Jakob Wredstrøm

Amazing and you know to take this sort of to play off the LP which you know has had its resurgence. I think this is this is maybe one of the steps that I've seen that I've been missing with it. It's like it's great. I have an LP right over here. It's just our work and I'm not a nostalgic guy. So having this extra element of actually this is something that I can use or interact with because I don't have an LP player. I think. Even if I did do anything with it, I think it would have this extra layer of value or relevance to my digital world as of right now. Yeah, great.

Jennifer Sullivan

Yeah, and I'm not, you know, yeah, I love it. It's great.

Jakob Wredstrøm

Well, thank you for your time. Think we'll try to edit this so it might not actually be as chronological as it is, you know, when it does. I'll have my, make sure my producer sends it over like for review if anything. So we just have the freedom maybe to play some segments in where it didn't naturally actually occur in order to get this, the things we just covered now. Will give a lot of great context to the conversation we had. So I think we need to sort of place that in a clever way, that makes sense.