AI and the New Economics of Independent Music Careers

JC Sanchez

No, actually.

Jakob

So the way that it works is that it streams our conversation between you and me, then it downloads on your computer and then uploads at the same time, which means I get full quality no matter what. So if there's a lag or anything, that does not show in the final recording. Also, if there's background noise, we have noise suppression for that, so that usually doesn't become a part of the audio. So you don't really need to think about any of that. There's only one thing you need to think about, then it's the

JC Sanchez

Correct.

Jakob

Answer a question answer dynamic. So keeping answers short and sweet because then I can naturally the conversation. And that's it. So if that's the only thing you have in mind in the back of your head, then we're good. Then I'll make sure that we see our conversation that makes sense. Cool. Then I will start in a few seconds.

JC Sanchez

Okay.

Jakob

JC, welcome to the studio.

JC Sanchez

Thank you so much.

Jakob

So we'll talk about you, JC, we'll talk about your company at Orphic, and we will talk about a lot of things about managing an artist's career and how technology is helping doing that. But JC, for the people who don't know you, who are you and what do you do?

JC Sanchez

My name is Juan Camigo Sánchez. Everybody calls me JC though. I am a music strategist by trade who is now a startup founder, which is a interesting and peculiar thing to say, because that was never the plan. I come from working at Spotify, at Meta, at Sony, Artist Management, Independent Labels. I've done a lot of things. And yeah, building Orphic Now, which is an AI dedicated to helping artists and teams manage their careers.

Jakob

Interesting. So let's start at the problem statement. Like why are you even trying to build a technology to solve this?

JC Sanchez

Yeah, I mean, we working with artists directly and managing projects, you know that there's like a million things to do that you never really get to when you're releasing a an album or you know, that there's always just one more thing to work on, one more polish to make, whether it's a campaign or you know, the little hamster wheel of social media just keeps you making content all the time, etcetera. And I started using AI tools in my own work, work we you know, with artists directly and management teams. Sort of like to help myself with AI for productivity. And I realized that it was like just an incredible tool, but it took me a lot to really learn how these models work, how to prompt, how to manage context, like all these like sort of technical things. And that's sort of what led me the conclusion that it's just one more job that we're asking artists to make, you know, to take on. To learn how to use these tools properly and effectively and easily. You know, one of those things, it's always complex making things simple. So that's where the idea for the company started. It's like can we

Jakob

Mm.

JC Sanchez

Leverage this technology in a way that the artist stays creative, stays having fun, and doesn't have to take on this role of like learning all the different models, all the different prompting techniques, all this different stuff.

Jakob

Hmm. But so y you come from a background as a music strategist and you've worked at these big companies like Meta and Spotify, which obviously is a you know, big corporate beast, and then going to a startup, that is two very different worlds. So what made you decide that you wanted to pursue this? Like it's a big risk to take.

JC Sanchez

Yeah. It's part of it is you know, when you work in big corporations, you have a lot of opinions sometimes. At least I in my case I always had a lot of opinions about the bureaucracies and inefficiencies and like different stakeholders and different teams having different priorities. And it's like it was always very frustrating for me to be honest, the entire time I was in corporate that it's like, but this could be made simpler, this could be more effective. And like sometimes like you know, people have different interpretations about the North Star of the company and the goals that are set by the by the C suite, you know? And the startup really gives the opportunity for me or for someone to just like, hey, like, what is the sort of the vision and let's actually attack the problem the way it really merits to be attacked to help the people that we're trying to help, you know? So like, you know, I can't tell you that everything Spotify does, for example, is perfectly aligned with what artists need because the users aren't

Jakob

Mm-hmm.

JC Sanchez

Artists, the users are music listeners. So like there's sometimes a lot of misalignment between what artists need and what you know users need, like listeners of Spotify need. And my thing is helping artists. Like my thing is helping culture. My thing is like helping management teams, like helping labels, like I care more about like making sure that the music industry itself has the tools it needs and the work it needs to like work the best it can because that's when the best work is created in my opinion.

Jakob

Mm-hmm So you talked about prompting being another work to add on to a Nazis career. Obviously things are changing with technology. And one of the things we talked about before this call is also My question, for example, when things are changing, let's say AI makes things more effective on a on a you know big scale, then also the requirements of staying competitive is also changing. Like you might be need to be more proactive, you might to might need to have more output. The quality that you produce needs to be higher and the intent needs to be better because all the other teams are unable to do that and you know, at the end of the day, you are competing as an artist for someone's attention. So What do you think about this? I how is the mental load of this changing?

JC Sanchez

Yeah, I actually have a bit of a contrarian take on some of this stuff. I it th the parallel I'll draw is when it's for some artists, it's really fun to wipe out their Instagram profile. Like to just like archive every post and just be very mysterious or aesthetic.

Jakob

Sure.

JC Sanchez

When I worked at Meta, one of the things that I used to tell a lot of these artists, and we're talking about artists with tens of millions of followers, not just like, you know, like we're talking about like big and small, that it's like you're cutting off, you know, thousands, tens of thousands, hundreds of thousands of signals to a to a very complex algorithm that's trying to rank you compared to other people. Like every news article that has ever linked to one of your posts is now a deadlink on that news article if you archive all your posts. So Like those deadlings are actually really bad signals for the algorithm. And I think the challenge I made artists in that sense, which relates to sort of this AI slop-filled world we live in the competition, it's like I think the real challenge is how can you be more creative, more unique? Like, if the algorithms are designed to grab attention, to like hook people, engage people, like how can you make a stronger better world for your art. You know, like how do you capture attention by telling your story better? One of the things that I'm very happy about with Orphic that has happened with actually lots of artists is that they've created viral content. But it's not because the I'm trying to find some sort of like hook or song or dance for them or trend for them. Like it's not really about trying to get some sort of gimmick on how to create virality. Because the algorithms are designed to work. They're designed to react when people react. So if I can help an artist create a better piece of content that explains the world, better storytelling, better c you know, better world building for their audience, that content actually can perform really, really well. So I think the challenge is more of a creative challenge, and I think AI can really help with that sort of as a as a thought partner of sorts, more than just as a I mean, yes, as a tool to you know go point A, point B, but also like It's knowledge on tap. You know, that's like a very novel, weird thing.

Jakob

Okay. Mm-hmm. So anyone who knows a specific topic very deeply would also know that simplifying that and transferring that into repeat behavior of technology is quite difficult. Like you have a very strong background and obviously very knowledgeable about this field and you know, consequences of certain actions and what you might need to do, but putting that into technology and using AI for it is not that simple. Like even though it's a smart thing, you need to create repeatable success. So has there been any major challenges in trying to build the knowledge that you're sharing into AI and then implement that into a platform that people can use?

JC Sanchez

Yeah, I mean I think that's probably some of the toughest stuff that I've been learning. Sort of like different what is different from being more corporate or being more even more music to being more technology and startup founder-y, that it's there's so many little lessons about how people work, how people think, how to make things easy to understand without you having to be in the room explaining it to them. Really putting yourself in other people's shoes and just like r you know, thinking about the things that you are saying and doing, I think that part is incredibly difficult and I think underrated. I think, you know, people say it's really hard to start companies and all that. And I think a big part of that is like getting out of your own head. And this I guess this is why the there's a there's a that sort of I don't I don't know what the word is maybe trope but like people talk to your customers. Like and it's like it's very literal, but it's like no you really need to talk to your customers to understand what they think of your product. And they think what do you understand their experience? Experience using your product, you know?

Jakob

Hm. But how do you approach sort of in your personal experience of implementing your knowledge into technology and models that needs to replicate that?

JC Sanchez

It's just using it, like using it myself. It's like quite literally being my own customer, right? Like I will sit down and go into platform with a regular account and I will l literally have an artist with me or be on the phone with them and just be like working through the platform with them. It's like, okay, can I c is this platform doing what I am telling them that it can do? And just like doing it live with them, like that experience of like

Jakob

Mm.

JC Sanchez

You know, obviously I have my own tastes and opinions about how things like should and can work, but it's also like how do I marry that with like how easy it is for them to understand and it's like sort of really trying to live their experience with them.

Jakob

Hmm. That makes a lot of sense. So building a startup in this particular space, servicing artists, of course, also agencies, management, labels, is a very competitive space, and historically speaking, it's also been difficult to monetize unless you reach a certain scale and brand awareness. So what's your sort of opinion about the viability of building a business like your own, that must be a difficult business to build.

JC Sanchez

It is. I wish I wish it was easier. But it's I mean it's really interesting 'cause obviously I see what a lot of my competitors are doing, different directions. Like for example, we don't distribute music even though it's something a lot of artists ask for. But it's because, you know, we I'm not interested in competing with the labels and distributors in the music distribution business. I think that's a different business. You know, I'm interested in being sort of the way that Notion or, you know, Google Drive can follow you between your projects and your work. It's like I'm interested in being a layer for your productivity toolkit. At least that's our own sort of company hypothesis. The with the

Jakob

Mm.

JC Sanchez

I don't know, let me find the right words.

JC Sanchez

Yeah. Sorry. Yeah. Hold on. I definitely lost my train of thought completely.

Jakob

It will cut that out. No stress, no cl no stress.

Jakob

No, so you're talking about Notion, Google Drive, and how you sort of the platform that sort of goes in between.

JC Sanchez

The challenges of just doing this. Yeah. So Yeah, I mean it's there's a lot of different options that you have on the table when you're building the company and how to make something like this profitable. For me, I think the top thing that I'm looking for is does this actually work? Can this technology unblock things that weren't possible to be done before? And I think that's more where my mind is at. It's like, sure, you can use other AI tools to do things similar to we can, but you know, for example, you can't you can ask TikTok or Meta Or Spotify for their best practices. And they're gonna give you their best practices, but there's you don't actually know, okay, should I use an Instagram broadcast channel or a WhatsApp broadcast channel to manage my audience? Or both? And it's like I hate asking artists to do both because that's so much work, unless it's easy for you to do both, in which case, do both. You don't really lose anything by doing both. But it's like if you have to choose, WhatsApp is the obvious, you know, winner between both of them, and sometimes the platform.

Jakob

Hmm. Mm.

JC Sanchez

Aren't gonna tell you to choose one or to do things one way because they want you to use a bunch of different products. You know, for example, a couple years ago, you know, you we put people could tell that the Instagram story reach was going down. And they're like, why is everyone's reach going down? And when you made less stories, it was actually getting more reach. And it's like, look, I wish it was because of very like you know, for very noble reasons that Meta was doing this, but they I'm sure they had research that probably said that, you know, Reels makes more money than stories. Let's start pushing people towards reels and let's ha push you know, with the distribution signals that stories should take less of a priority. And You know, it's probably I mean, there's no i no official evidence of this. But it's probably what happened, you know, and that's so it's like, okay, like you your content creation as an artist should be shifting more towards reels and less towards stories. I mean, applied to everybody, but I think with things like that, that's where we come in with that level of expertise because look, I have lived it from the platforms, I have lived it from just, you know, the experience in the day-to-day, and I think that

Jakob

Hmm. Mm.

JC Sanchez

That perspective that taste is like I'm not delegating that strategy to the AI at all. We're putting our AI on a very straight course of like, hey, what is actually good advice at scale or in specific scenarios? And can the AI retrieve that information when needed to give that particular kind of advice? And then in terms of the other features and other things, it's like, look, like we can do things with AI today that we couldn't do last week. You know, and I and I think staying ahead of that, using these tools to really build the things that need building, to help artists manage audiences, to help artists create content faster and easier. Like, you know, artists are you know, most artists don't really care for AI video generation, like to like replicate themselves, replicate other things. At least I'm willing to say most artists don't love it. But you tell an artist that an AI is gonna edit your video for you and they're like, please where do I sign up? How do I hate editing. A lot of artists hate editing videos, like social media clips.

Jakob

Mm-hmm.

JC Sanchez

I think I think using AI to help with that is great, if it actually does a good job editing the videos, you know, for example.

Jakob

Mm-hmm. Mm. You know, there's a there's a lot of context to knowledge. You know, a parallel example is at Amplitude, we also do a lot of digital marketing and when one certain client that we're working a lot with driving schools, not related to music, and we were basically running that client for them for specific reasons. And we had set up a digital marketing strategy. I also do a lot myself and we had a lot of different campaigns running. And then the client, for budget reasons, say, okay, I need to do some of this work myself, and then changed completely according to what Google's recommendation was. And it's really difficult to explain them. No, it you can't just go for what Google explains because they don't have the context. They don't know what you're trying to solve, they don't know fully like what your messaging is, they don't know the complexity of everything about your business, which is where we build something deeper than just like what's the best conversion value. So and that's the thing with AI and the thing with technology, that context or these big tech platforms is there's a context to it. And even with all these data points they have, the deep domain expertise, the sensitive the human interaction, the human intuition still far exceeds what a lot of these technologies present to being the best solution. And that's also why your sort of channels stay relevant, I guess. Does that make sense?

JC Sanchez

Yeah. Absolutely. I have I have very vivid memories of early TikTok conversations. I worked a lot with TikTok very early in their in their you know, their growth stage, with artists. Like before we had TikTok influencers and trends and things like that, I was already sort of creating TikTok influencers and trends and working, you know, like before the labels didn't have even like teams or infrastructure or agencies to tap to like talk to creators and I was already like sort of like on it. But it was just funny because I would go and talk to TikTok and they had no idea what it's talking about. And it's like, that's great. Like you guys create a platform and like you don't even understand it. Mind you, it I think that's another thing that people don't understand that like these companies are not are not monoliths. Like they're there's thousands of employees working on thousands of different things. If you talk to the music team, they don't know what the ads team is doing. So if you're trying to do an ad campaign, you know, on a on TikTok or meta or something, you're not gonna get really far talking to the music team or to some other team 'cause they just they do different things. And they don't really necessarily talk to each other.

Jakob

Hmm. That's really interesting. One of the things I wanted to ask you is in a space that's fairly competitive, how do you acquire customers? Like what isn't needed for you as a business to actually go out and say, hey, use us? Maybe it's taking clients from other competitors, maybe it's converting people who've never used platforms like this to become new clients. What's the reality of all of this?

JC Sanchez

Yeah. I'm a big believer in product led growth. That's more the camp that I where I sit in. It's just being really easy to find, being easy to use and letting our own users sort of drive that growth. And that's what we're, you know, betting on. So, you know, we use SEO, GEO, we really are trying to build the product in such a way that we can leverage network effects. You know, artists inviting their teams, teams inviting their artists, and making it some you know Mm. Creating a good enough platform, a good enough product that people genuinely want to talk and share because we're actually solving a problem or multiple problems. You know, and those are the sort of features that we're sort of working on. It's like, you know, I'm not a person that believes in sort of reinventing the wheels. Like, look, like I definitely feel like there's products out there that solve the issues that we're solving, but it's not a one-size fits all. Like, for example, if you ever made a notion for an artist, it's a very tedious and manual process to really customize notion and so way that you can create a project management workspace for an artist. It's especially the connections and the or even just thinking about the organizational structure. Like an AI can now tell you like your you know a project management organizational space should have this is this but then it might miss things or it might prioritize things over others and it's like where is your time best spent organizing this stuff and I actually do you know how long it takes to organize this stuff. So the idea for us is to like can we just have it

JC Sanchez

Out of the box ready for you? Can we just have the you know the whole signal versus noise? It's like, can I make you focus your time? Spe to spend it on the right things. Like talk about context management for an AI. It's like, look, like we ask artists 21 psychoanalysis questions as part of like a workspace. There's a very specific reason why every single one of those questions is there. It serves an actual purpose in the back end for the analysis that we do and the artists as to like why is this an important question? I mean, questions that are not rocket science. It's like, why do you make music? What are the feelings you're trying to capture on your songs? What do you want fans to feel when they leave your shows? Questions like that it like when you stop and think about it, it's like, is it good for a large language model to be ingesting this type of context for an artist. And it's like absolutely like when you s give a predictive engine predictive tools based on like ground truth and an artist vision It actually creates much better recommendations and much more aligned recommendations to their artistic vision. And it's like, again, it for me it was more trial and error to arrive at some of these things. Cause like a lot of them are grounded in you know marketing best practices, but a lot of them are just experience. Like I've just I've tried prompting AI a thousand different ways is like what actually gets me the best result from you know model whichever model.

Jakob

Okay.

Jakob

Hm. Okay, that's r that's really interesting. One of the things I'm really interested about asking funders in this space is sort of the B2C to B2B contribution of the finances. Because oftentimes a company would maybe have a visual branding that's very appealing for autists, but the realities of the business is the B2B relationships are the most stable and maybe the most attractive. Like what's the reality of your company?

JC Sanchez

It's that's a vi always a very tricky question. Are you B2C, are you B2B? And the I the way I think about it is we're B2SMB. Like we are very much designed for users, for consumers, consumers being artists primarily, and small teams. Like that's our bread and butter. But we are designed in such a way that we are scaling up to be able to work with larger partners. But one of the things that I'm very adamant about is I don't think I don't think we succeed if we serve enterprise corporate first. Because I don't think that's what enterprise or corporate even need from us. You know, like to be honest, like, and this is something I learned in my work at Sony. It's like, look, like you can have a huge marketing budget and a huge team at the label. But if the artist is not opted in, if the artist is not engaged, it is incredibly it's twenty a million times harder to run a successful campaign. It's just so much easier when the artist is in the conversation and in the project planning stage and like it's like okay 'cause like an artist is just like, here I made an album, you guys figure it out. You know, you c you can do it, you can spend the money and you can market it and it can be done. But it's so much more interesting, so much more fun, so much easier. Your money goes so much further when the artist is leaned in and like, you know, part of the process. So that was that's sort of the goal that we have with the platform. It's like, can I make a space that the artist can easily personalize, contextualize, like so that the rest of the team can leverage AI to do this. D to do that extra work and that extra management. You know, what do I ask of the artists in our platform to, you know, make b mood boards, you know, to answer personality questions, to just, you know, fill their creativity and like put it in here. You know, I'm not asking them to do crazy technical stuff. Like it's but the with the with no place.

Jakob

Hm.

Jakob

Mm-hmm. But with all with all these tools in the market, yours included, do you believe that we're moving towards a generation of self managed artists primarily and very small teams? And that's where the success will come from immediately?

JC Sanchez

To an extent, yes. I mean that's been the right direction for the last twenty, thirty years. Obviously as the labels have sort of decentralized, the distributors risen up, like we've become a much bigger middle of the of the of the triangle enterpr you know. Like pe obviously the tail of artists has grown huge. But the reality is the pie has grown more in the middle and more in towards the end.

Jakob

Mm.

JC Sanchez

Than in the top, you know, proportionally speaking. Like it used to be very top heavy. And it's still quite top heavy. The heavy the top is still quite large, but the middle has definitely risen a lot more than I think the top. And a lot of the bigger players would prefer that the top had like stayed bigger. But like that's just not what you know the internet and sort of like these new platforms have given way to. I mean, that this is why the labels are buying distributors at the end of the day. It's like, look, like there's just a growing middle market that is massive, and it's not gonna go away. It's only sort of like increasing market. Chair is changing at a very large scale. And yeah, I mean, I honestly, you know, I do believe I'm one of those people that. I absolutely believe having there has to be a way of having a smaller audience be better monetized. I don't think it is required a requirement for every artist to be a superstar artist in order to be successful. I mean, the world today is making it even harder to do so anyways. You know, things are becoming more niche. You know, it's like a lot of the conversation is like, are we gonna have superstar artists again and create, you know, these massive global cultural moments? I think the answer is yes, but I think it's gonna be much harder than it used to be because now there is more competition for attention. Competition in music. I think the most interesting idea ideas are the ones that are gonna like cut through. And then like I was I had this reflection on recently that it's like look like

Jakob

Hm.

JC Sanchez

If a song is a prompt away, you know, and all that, then that's the that's a world that we don't get to, you know, we don't get to go back to a world where that's not the case. It very much is the case that like it's gonna be the best ideas that cut through because like sometimes, you know, most of the music AI is making right now, it's not great unless there's a lot of human input, you know? Like the most interesting stories in AI music from just a news point of view, it's like look, it's the is the AI music where there's a very hu a human composer behind it or a producer or you know, like it's like it I don't I don't think I know of like a someone just like make me a hit song and then it's a hit song and then it went viral and then everyone loves it. It's like no, like most of the success stories for AI music come from like human creators using the tool, you know?

Jakob

Hmm. Makes sense. So who do you believe is gonna be the ideal creator in the future? Like who are I know it's really hard to generalize and you know there's so many different types of people, but if you were to generalize, if we were to say this type of persona would be the ones who will be successful in the future when it comes to how creative they are or self managed or you know, knowing how to do video, like if you can cover anything and say this is the type of persona that you believe will be successful. Who would that be?

JC Sanchez

Yeah. I have an easy answer for that one. It's the storyteller. And it's been the case the whole of human history. Who makes people feel something? Who shares something you didn't know? Who makes you feel heard, seen, felt like understood? Like who has a very interesting idea that you connect with? Whether it's like you know, if it's like intellectual, if it's sort of like a musical jazz idea or something like that, or if it's more spiritual, or if it's more emotional, that you're feeling a certain kind of a way, you've just had loss in your life and you're sad. Like is there a

Jakob

Mm.

JC Sanchez

Song out there that connects with you in a very deep and real way. I mean I think it says a lot that so much of the catalog has like, you know, because that's maybe one of the hardest competitions right now. It's not even new AI music or anything. Your competition is catalog. Because now like to burst through the charts you have to compete with every other hit that is getting a bunch of consumption today, anyways. And again it's like is your storytelling

Jakob

Mm.

JC Sanchez

Does it connect better with people than something else? You know, like in that's the bar.

Jakob

Yeah. I that's a really interesting answer and obviously that touches upon something very fundamental. And that was actually not the angle I thought you were gonna answer, but that makes a whole lot of sense when you say it. But th there's another angle to the question that I think is also r really interesting for my curiosity to understand, is like the financial viability of being an assist obviously is troublesome. Like it's not easy, it most likely never will be easy. Maybe perhaps it'll be easier for a certain type of person. Like I had a really interesting conversation with Mike Holland, who is the manager of Logic on the podcast. And one of the things that he argued is that business people, like Adsays that are also business people are inherently gonna have a more realistic chance of making it in the music business in the future. And all also my question is like these toolings are making people who are have capacity within that domain and maybe more naturally leaning towards it will have a advantage in the financial viability of a criminal analysis. Could you comment on that? Does that make sense for you? Or like what's your angle to this?

JC Sanchez

I actually don't know don't know that I fully agree with it, if I'm honest. I think I think that's the bet that we're making long term. And a lot of our competitors that it's like, look, I think is it ever gonna be truly hands-off, you just you know, sit back and money you know, make music and money comes in and you don't do anything? No. I don't think that's the case. But

Jakob

Sure, sure.

JC Sanchez

I do think that because of AI, the ability to make technology tools and platforms workflows that just wasn't possible before. And it's like not because it couldn't have been done before in some cases. Like for example, I think a lot, for example, about direct to fan communication. It's like, look, like we have mobile apps, we have push notifications, we have text messages, we have emails, we have, you know, all these ways of reaching someone. And it's like it nothing ever stops you from signing up to Layla or get creating a newsletter or like you know, nothing stops artists from developing direct to commun you know, direct-to-fan communication channels. The tricky part is managing the stuff, you know, and that's where I think most of the of the players in that space, like they stumble into like, okay, like we created the pipeline, but no one knows how to use it. You know, and it's like, do I think that we're gonna live in a world where an AI agent can like manage it for you? Yeah, that's the one we're building. You know, like that's like I think that's exactly the bet. That's like mind you, you have to have a tremendous amount of trust in that agent to manage these very sensitive relationships 'cause now you're getting the middle between you know, the artists and their consumers, their customers, you know, like the people who consume their product or art, right? So it's a being the

Jakob

Mm.

JC Sanchez

User and vendor, it's like a very sensitive thing because it there has to be a lot of trust like between me and the artists and the teams and also I have to make sure that my product protects the relationship between the artist and the fans, which I in my mind and be maybe I you know I'm biased because I love music, but it's like I think it's a much more precious and important relationship than like just a c regular consumer. It's like the emotional links that we have to our artists like, you know, because of the parasocial nature of

Jakob

Mm.

JC Sanchez

This stuff. It's like it's very it's very spiritual for sometimes. Like some s you know, people have religious experiences at concerts, quite literally, you know?

Jakob

Mm-hmm. So I'm paraphrasing you now, but is the essence of what you're saying is because the management part, to some degree, the business part can be taken care of on a day-to-day effort level from AI, therefore the storytelling will be even bigger part of the journey and also being the differentiating factor that would make it financially viable. Is that correctly paraphrased?

JC Sanchez

Yeah. Yeah, I mean i it's very expensive to monetize a very small audience. And I think a the AI is making it much, much cheaper to monetize a smaller audience. I do think that's the bet that I'm willing to make. That is the shift that I think is gonna happen in the industry. No one's figured it out yet. I don't think we're in that world today. But I do think we will be in that world in the future where like it's more about smaller communities and how to better monetize smaller communities and like because if the what is the goal at the end of the day for an artist? It's like to live off my art. For most artists it's like can I live

Jakob

Mm.

Jakob

Mm.

Jakob

Mm.

Jakob

Mm.

JC Sanchez

From making music only. And I think that I think we can go into that world. Look, I don't think you're gonna be a superstar. I don't think you can sell it arenas. I don't think most of you can like do that. But can you live off of making music? And I think the answer is yes. But we don't have the business technology infrastructure built yet that lets artists like do that in a much more easy and accessible way.

Jakob

Mm.

Jakob

Hmm. That makes a whole lot of sense. And I haven't thought about it from that perspective. I'm a big believer in monetizing niches, especially in music, where have super serving someone is a more viable path than trying to serve everyone. And yes, there's definitely a market for serving everyone. Like that's the base of the music industry on a global level. But on an individual level and maybe the independent growth level, then that super serving a niche community is probably what carries most successful acts, I guess.

JC Sanchez

Yeah. It's even true for streaming, which is something people don't really think about. It's like I forget the specific numbers, but if you go on a Spotify for artist profile, like for any artist, in the segmentation on the desktop, it doesn't work on mobile, I don't think. But they actually tell you like, you know, like what you it'll show you for your individual artists, like what is the percentage of your streams that come from your super listeners versus your total audience. For most artists

Jakob

Sure.

JC Sanchez

80% of their streams come from 20% of the audience. And then there's actually artists where that's even worse. Like, but people don't really think about that. It's like, 10%, 15% of the people that listen to me give me 80, 85% of my streams. Like when you see monthly listeners, people don't understand that, like, look, most of the monthly listeners that you see an artist have are not the ones that give them most of the streams. Like you're if you have a million monthly listeners, it's probably closer to 100,000 that are giving you most of your streams, not a million.

Jakob

Mm. Yeah. That's very interesting and I've

JC Sanchez

Even though the number says a million.

Jakob

I've also worked with arts, it's not on to any degree the scale that you have, but that was also really interesting for me working with let's say electronic music assist that might have like you know, that was pretty terrible, like but one point four like listeners per stream or opposite, where I was doing children's music when it was like twenty-five. Like so you know, every single listener on average were listening twenty-five times a song in it in a given month. So that really so basically they were the children's music was streamed much less and much slower, like lower monthly.

JC Sanchez

Yeah.

Jakob

listeners were performing much better with the audience than this sort of more generic electronic music, which is quite interesting. And it says a lot about also the monetization opportunities for such analysis. Yeah. So do you educate your customers on these differences?

JC Sanchez

Yeah.

JC Sanchez

A hundred percent. A hundred percent.

JC Sanchez

Trying to. It's always it's a struggle. I you know, 'cause when you live in this and you're just so immersed in this, it's so incredibly it's really easy to get cute, it's really easy to get fancy and it's like I that's a fight I have every day. It's like

Jakob

huh.

JC Sanchez

not getting in my own way and not overthinking things and really trying to always like how does an artist that is tired and busy and wants nothing to do with business or marketing like is this easy to understand? And that's a struggle every day.

Jakob

Hmm. I think that's the key thing. Like an analysis is stretched out, stretched thin. And I guess products nowadays to enable the vision that you're talking about needs to make this as little friction as possible, with probably the highest return as possible. Which is also a big ask for a startup company to say, you know, this is not going to be too expensive for you to prioritize paying for it. It needs to be super easy to use and need to give huge output. Like in a traditional technology company serving businesses, you would charge bucks, like so much money in order to have that valid proposition served. But monetization of artists and music teams, you know, would be limited compared to the effect that you're providing them. What's your reflections on that?

JC Sanchez

Mm-hmm.

JC Sanchez

It's I mean that's one of the realities that we faced, because you know, in terms of niche, we doubled down on the release planning being as the stage that we're first sort of like tackling, like can we make better marketing plans and strategies and content ideas faster and easier than everybody else? But the downside of that is that we are most relevant when you are promoting music, releasing music, planning music, which means that when you're not, you know, doing that, it's not as useful. So we have a lot of But we have a lot of returning clients. So, you know, for us the challenge is like, okay, how do we bridge the gap between releases? Like how to build more features and tools to help you with monetization of the audience, touring, merchandise, the things that happen between releases that still require work. So that like instead of use using us for two, three months when you're releasing music, you use us all year, you know? And then that's our own personal challenge, like the sort of the reflection that we're at, because it's like

Jakob

Mm, mm.

Jakob

Mm.

Jakob

Hm.

JC Sanchez

If you and that's it's hard because like now it's like, okay, like what kind of a business are you building? What is you know, this is why we sort of landed in you know, I have not personally myself managed artists with the manager title. Like I've worked with in management teams, I've worked managing artists, but it's like I've always like been a little bit like when people I've had dozens of artists ask me to manage them, big ones too, that it's like

Jakob

Mm.

JC Sanchez

And I always tell them the same things like, look, dude, I don't know that I'm the manager. Like you have to have a s certain kind of a temperament and vision and hunger and voraciousness to be a good manager. Like you have to go get people to pay you, and you have to get you know angry with people, and like that, you know, I'm not really like that in my own personality. But

Jakob

Mm.

JC Sanchez

You know, one of the things that we s like realize is like look, like we have to serve we have to make it a tool so that managers really can use it. Because a lot of the times the manager is the ones that's driving the career forward. Cause the artist is in creative land, which is where they need to be, and someone has to run the business. And you need the tools to manage the whole thing. And that's why it's like, okay, like we are artist management software. That's our category, you know, like of software.

Jakob

Mm.

Jakob

Mm.

Jakob

JC, it's been incredibly interesting talking today. And it's so interesting to hear your reflections about this. I think what could be really interesting is also having maybe an interview in a year's time, because these things are changing so fast. And the reality now is really it's very clear that AI, of course, will play a huge part in Atlas' lives and manager's life. The interesting and unknown factor is like how that changes the personalities, how that changes the workflows and the needs of what a well-functioning team is, which we can assume, like you have your assumption, you have your hypothesis, others have others. But it's really interesting for me to understand like where is it actually moving? Because it changes who will be the ones who will succeed in the future. Like I'm a big fan of numbers and sort of the concepts of scale. So yes, there's obviously going to be individual exceptions. And there's going to be unique people, you know, that sort of sets some sort of direction to what it means to be an artist. But in general, you can have personality types, you can have people who lean towards certain workflows that at scale are the most successful or the most prevalent ways of doing this. And that for me is still very unclear. Do you think, maybe that's the last question of the interview. Do you think that the lives and livelihood of assets in the future will be better? Or will it be worse or different?

JC Sanchez

I have two thoughts on that. One is I don't think we're gonna go into a one-size fit fits all world. I think that's not where you know, the development of software today, the development of the world and how culture is sort of like unfolding, it's becoming less monolithic. It's I and I think it's gonna be an we're gonna be in a world of options. Like you wanna work with this kind of company, or you wanna build it yourself, or you wanna use this, you know, general tool for this. I think you will have those options.

Jakob

Yeah.

JC Sanchez

Options on the table, and they will all be valid options. It just depends on what you personally want to do. You know, like I'm betting on a world where an artist is gonna feel more comfortable in my platform than on a general AI platform. Why? Because we're using their language, we're designed for their needs, we're designed for their ease of use, and it's like it's just gonna be, you know, like an easier experience. And to the other part to your question, I also think that we you know, talk about the tale of like in the middle class of artists rising. There are more artists today than ever. Like ever. People who are making success from music. And I think we don't really get perspective on, you know, how many professional artists were there fifty years ago. You know, we idolized a lot of artists from the you know seventies, eighties, and it's like look, there weren't that many of them. I mean, in like compared to the volume that we have today. So it's like we actually do have more artists successful today. They're just not all as successful as the peak of fifty years ago. You know, and I think we don't really get a lot of perspective into those kinds of numbers because like

Jakob

Mm.

JC Sanchez

so many people have always wished to be an artist and the barriers of entry were always so massively high. And for good you know, for good or for bad reasons, you can have your opinion whether you know like or dislike gatekeepers. You know, one of the downsides of like the labels and the industry losing power in terms of marketing is that now they don't get to choose who is the famous artist. You know, like the platforms decide, the algorithms decide, people decide. The obviously the label can make bets, but that's this is why a lot of the labels just double down on what's already working 'cause it's like they don't they didn't get to you know people will knock AR teams that you're not doing an R work. It's like no the labels have always been investing in AR. The public now gets to choose whether they bet like an artist or not. And it doesn't matter how much money you have, it just the people still decide if this artist becomes big or not, you know.

Jakob

Mm.

JC Sanchez

So yeah, I think we're gonna have more abundance. I d I'm definitely one of those people. It's it's gonna look different than what we're used to though, for sure.

Jakob

Incredibly interesting answers and I appreciate this conversation. I appreciate your views on it. I don't fully have an opinion or an idea of what things will look like, but I would love to subscribe to your worldview. I've definitely been more dark in the past. I think I'm becoming more of an o optimist lately. Not about AI in general, but music. JC, it's gonna be so interesting. And

JC Sanchez

Mm-hmm.

Jakob

Thank you so much for being in the podcast today.

JC Sanchez

Yeah, thank you guys.