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By Tim Ferguson, 18 February 2008 17:36

COMMENT

Fans = A&R
I don’t know if you're familiar with the concept of [the] wisdom of crowds. Essentially what it says is that if you put a group of people together to make a decision in the right circumstances then they will inevitably always come to a better decision than a roomful of experts.

We can mathematically demonstrate from real data from our scout rooms that if you have 40 reviews per track in a scout room, the score that every track will get will be 98 per cent accurate - i.e. if you did another million reviews, the final score would be within two per cent of that score.

So what you actually have is a near perfect A&R environment, based on live, real music consumers rather than gut feel from A&R. So the A&R side is very important and it has to work because what we're trying to do is present the most invest-able band and artists, otherwise you might as well wander onto MySpace and pick one at random.

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Success stories and reaching for The Alps
Somebody called Sarah Grace and the other one is Jamie George. They'll have their money within the next couple weeks. So far we've financed nine other artists and the first one to release an album is a band called The Alps and their album's coming out in March. They've got a good following.

There is a band called Gillkicker who raised finance on the site who then got bought out because they were going to sign a record deal. There's the ability to buy artists out of the site but they have to buy a 70 per cent premium to the contract price at the time they buy them out so the investors get a decent return.

Radiohead's pay-what-you-like concept
I think it was a fantastic thing to do. I think it worked for Radiohead because number one they were the first, number two they already had six albums behind them, number three they also had tens of millions of pounds of marketing over the last decade or so. They had a huge established fan base.

But if you're an unsigned artist and you put your album up for free, you'll be lucky if many people even bother to download it and certainly no one's going to pay for it. Nine Inch Nails repeated the Radiohead experiment a couple of months after them and were hugely disappointed. I think only 18 per cent of people paid anything for their album and they are a big band as well. So I think [Radiohead] was a one off.

Selling direct to the public is a model that will work for established artists, why wouldn't it? But it certainly won't work for emerging artists - there are too many of them basically.

A solution to the current music industry problems?
I think it's part of the solution. If you look at the main record industry at the moment, they have an uneconomic model and everyone knows that now. We speak to major labels occasionally and one of them was bemoaning the fact that it cost them half a million pounds per new act to get to the point where they could work out whether or not anyone was going to buy it. For every 20 new acts they spent half a million pounds on, 19 lost money. Now that's a huge overhead.

So what they have to do is, not sell more albums or completely reinvent the model, they just have to slash an enormous amount out of the cost base so it becomes an economic model. And [a] large chunk of that is A&R at the end of the day.

We have an alternative A&R route that we can work with the labels as well as beside them. There's no reason why they can't use us to identify talent and they can't try out their new acts through Slicethepie and we'll give them feedback on how they've scored to save them spending that half million [pounds] on even 25 per cent of the ones they otherwise would have done. It's got to make sense.

Join the web 2.0 music party
It's quite easy to sell really. The worst case for the band is they get 100, 150 honest reviews of their music and if they don't like what they hear well that's unfortunate, but it's the only place probably on the internet where you'll get crushingly honest reviews of your music. And you'll be able to identify your best track so it's a way of actually developing your art, developing your music.

And for the lucky ones that get through, then again what have you got to lose? You keep the copyright, you keep the publishing you can sign a record deal the day after you receive the money and you won't have to give it back. The only obligation is to pay £2 per album sold to us which we use to pay out the investors. So it's pretty much a one-way street. We've just taken the view that the core ingredients for good music are melody, performance and support. At the end of the day it's got to be about the music first and foremost.

Read how Slicethepie has the potential shake up the music industry here.