Grooveshark is an online music search engine, music streaming service and music recommendation web software application, allowing users to search for, stream, and upload music for a charge that can be played immediately or added to a playlist.

I sat down with Grooveshark’s SVP Paul Geller discussing artist payout, Spotify, and how Grooveshark positioned itself as one of the leading providers of music streaming in the industry.

Tell me about your history in music. You mentioned that you began as a musician signed to a label performing in an emo band.

I started playing violin when I was 4. I think my mom was a Tiger Mom before it was fashionable. I always had to be playings something. In middle school I took up alto sax, then piano/keys and finally landed on an instrument I considered fashionable. My dad bought me a beat up Japanese Strat. To this day it’s my favorite guitar even though I have quite a collection. After a few years of playing alone I started a band with a couple other buddies from school. The band was called Keepsake. We signed a deal with Eulogy Recordings when I was 15, put out a record and went on our first tour when I was 16. I think I did about 3 records before my 19th birthday and had been up and down the East Coast a dozen times. I have vivid memories of sleeping in an uninsulated utility van on Christmas Day in Wilkes-Barre, PA. Read more….

The town I grew up in, Coral Springs, FL was a hotbed for the budding hardcore/punk/emo scenes. There was something about middle-class suburbia in the late 90s where kids had just enough money to buy a half-stack but just enough angst to be pissed about it. I went to High School with Chad Gilbert of New Found Glory and the rest of those guys were from high schools nearby. South Florida bred Marilyn Manson, Glasseater, Mourning Again, Shai Halud, Dashboard Confessional and dozens of other acts that would go on to form the foundations of new school hardcore / pop-punk and screamo scene. I’m proud to consider myself a graduate of that class. After leaving the band for a girl and moving to NYC I returned pretty beaten and with a ton of debt. I ended up squatting with a party promoter in Oakland Park, FL for a few years. By day I was producing and engineering hardcore records. I made a record with this fabulous addict named Stavros Polentas. I don’t know what happened to him, suffice to say it was some of the most magical stuff I had ever worked on. He was a brilliant writer and he made me fall in love with the afflicted singer/songer-writer type.

By night I was cutting my teeth as a party promoter. At 21 that’s a lifestyle you could get used to. I got wrapped up with a decent enough group of guys and we expanded our weekly party to a full fledged career with parties all over South Florida. We worked with places like Poplife and Revolver — two miami parties that were at the forefront of the indie-dance scene. I learned to DJ and we took the show up to Orlando, Tampa and then used our close ties to agents to spread dance music up the state to local promoters in Tallahassee and Jacksonville. Many of those parties are the best place to hear the latest dance tunes. Many of them are still going strong. I still DJ nationally on a regular basis. I’d say a few times a month.

How did you end up working for Grooveshark?

It’s a corollary to my last story. Once I setup shop in Orlando an old friend of mine, Mike Feinberg got a gig rebranding a mega club there called “Club Firestone.” He brought me in to help program the place. We threw one of the biggest dance parties in the country and we used the foot traffic to get kids out to see acts like Of Montreal and Justice, among others that were really getting legs in the indie/post indie scene. I met a few of the Grooveshark guys when they came down to a show and were trying to get an interview with one of the bands that was playing one night and we hit it off. We kept in touch for about two years until I felt it was right for me to join up. It was really the early versions of the Artists platform that sold me. I’d never seen analytics like that and I just got so excited to created a product out of it. I had a desk two weeks later and founded the Information Products Team upon arrival.

In what way does Grooveshark benefit artists as wells as major and indepedent labels?

I could spend all day on this. First, let me remind everyone that the two aren’t mutually exclusive but they are different.

For independent artists the most important aspect of Grooveshark is the ability to get your catalog out to 34 Million people in a matter of minutes. Most of the more than 2,000 artists we have signing up daily aren’t going to consider streaming royalties the most important aspect of their income. They are looking to get their band heard by as many people as possible, glean as much knowledge as possible from those listens and then drive those new fans to either a point of sale for the recording itself, merchandising or tickets, or create a fan out of an A&R rep, manager or one of the tastemakers that are constantly scouring our site. There are also really cost effective promotional aspects to the platform. Artists can buy spins, ads, skins and they can access granular consumption data about who is listening where, how often and how influential they are. We break this out into 4 tiers. Forgive me, we don;’ have actual “names” for these tiers. It’s sort of how we break out the division of labor.

The Analytic Tier: The basic self-service model allows an artist or rep to uploads his/her music and begin tracking trends on the analytics dashboard. Artists are able to see how their music is trending demographically, geographically, time-wise, etc. and can tailor their efforts to either enhance that profile or adjust it.
The Standard Artist-Plus Tier: Everything from the Analytic Tier plus the option to access mechanisms such as Grooveshark’s radio campaigns. For instance, if you believe your music sounds and feels similar to Coldplay, you can have Grooveshark place you in rotation following Coldplay songs and then track whether it has a tangible impact on your listening trends
The Promotional/Partnership Tier: This is where Grooveshark begins to take an active role in promoting a particular band. There are numerous offerings here, ranging from exclusive song/album releases that come with skinned home pages to advanced radio campaigns to participation in “Grooveshark Sessions,” live or recorded sessions that debuted earlier this year at South by Southwest
The Representation Tier: This is the “all-in” level where Grooveshark signs a 360 representation agreement with the artists and uses all of its resources to promote them, whether it’s the Grooveshark arsenal of tools, social media campaigns, booking tours or festival dates, merchandising, etc. At the same time, however, Grooveshark’s interests are non-exclusive. The company only takes a cut of opportunities they deliver and should an artist then get signed to a major label deal; Grooveshark has played its part and would continue to work with the artist promotionally if desired.

Most of this is available at http://artists.grooveshark.com

We’ve signed a lot of independent labels. We’ve also signed a lot of label aggregators that deliver the content of hundreds of labels at once. This is a real great way to do licensing deals but it puts a lot of people between our Artist Pros and the artists themselves. Nonetheless all major and indie labels have access to the tools describes previously plus enhanced catalog management — which we also extend to agents and managers and direct access to the brand marketers that curate our bands and brands promotions. As it scales up the money becomes much more significant than what you would think of as a royalty payment. And then there is Beluga…

Beluga is the codename for the project we developed when I came on to lead the Information Projects Team. It’s the tool that brings it all together. We spent two years creating a framework that would allow us to mine data so granular that it could take all of the guesswork out of A&R, advertising, marketing, signing, merchandising and routing tours. That’s exactly what it does. It doesn’t replace the gut of a seasoned A&R veteran and the expertise of someone who can help an artist navigate a path to stardom through the major label but it does provide the backbone of support to laser focus her or his handlers on areas where margins are not being exploited. We’ve tested almost every aspect of the system in one-off scenarios and what we need now is a large label partner with the will to test at scale and a roster diverse enough to put it through its paces — to help us refine it and squeeze every penny out of every relationship.

It’s been a bloody history between music labels, music streaming services, and copyrights. How is the current relationship between Grooveshark with the major and indie labels?

We’ve been concentrating on enhancing our relationships with the labels that do want to work with us. Lots of indies. Lots of aggregators. Lots of independent artists. We have enough work to keep us busy with people that want deals now to be able to wait until the majors really want to do something substantial. I think we can deliver the revenues that the majors need in order to call a partnership successful but they aren’t so sure yet. We are ready to do the deals in a way that’s substantial for them and sustainable for us. We’re here to help them win the A&R game, to decrease waste, to bring new sources of revenue to the table and to help them push an artist out to 34 Million users with a couple of clicks — all without without cannibalizing their sales. I know this is a bit self-serving but I think whoever embraces that first will have a huge head start in the next decade.

Let’s talk about Grooveshark vs. Spotify. How are they different?

Spotify is a music streaming service. Grooveshark is an open music platform. Ostensibly that means the user experience is different. You’re going to find things on Grooveshark that were created and uploaded directly by the artist. That might mean live versions, white labels, remixes, alternative recordings. It’s the fans, labels, managers, artists building their own collections. I think the beauty of spotify is that it truly replaces the record store. You find what you would find in a Tower records right at your fingertips. On Grooveshark you’ll find things that you fish out of your dad’s attic.

As a company we are focused on artist development. We see the expansion of the artist eco-system as our main business and streaming music to consumers as a means to getting there.

It seems music streaming services are receiving punches from the press that the artist payout is to small. Please elaborate on this heated issue.

The payouts suck. But so do the payouts from a single CD. Very few artists can look at their pie and say the majority of it comes from record sales or even digital downloads. Most of them make the bulk of their living off of touring, merchandising, sync etc. I don’t think the bad press that Spotify has gotten is warranted. I think it illustrates a fundamental revaluation of the recorded song and with their big press push coming to the states, came a big press push-back. CDs had margins because they were sold on a single. It didn’t really matter how many songs were listened to how many times. You got your piece. Digital download changed that. It mattered how many songs were listened to, but not how many times. So you could still sell a pop single on a hook and count your cash at the end of week one. But streaming is new and different in that aspect. All of a sudden it matters how deep and long-lasting the emotional connection you make with the fan is. The more you get them to listen to your song over a longer period of time, the more money you make. It’s almost like the market has been corrected. The savvy artist will realize she or he is now incentivized to make a deeper emotional connection with the fan.

You mentioned that Grooveshark is set up to find the next Lady Gaga.

I’m a huge Lady Gaga fan. There has never been anyone like her before and I don’t think what she has will be easily replicated but you can model her story. We don’t have access to the Lady Gaga masters but she has a great story. She pounded the pavement for years before she broke. I was a fan early on. I remember where and when I first heard her so I know how authentic the process was with her. I’m not going to tell you who we built models out of but it’s artists who we’ve had masters to for a considerable amount of time and who have had careers that record execs would look at and say they became successful over the last two years. I’m also not going to say what data points we use because I think that’s at least 30% of the secret sauce, suffice to say it’s not just consumption trends and it’s not just social velocity. We also haven’t been 100% successful but we are confident that we can point labels in the right direction now.

Grooveshark’s Facebook app has seen its number of daily users rise in recent weeks. What contributed to the rise?

We’ve had a deep Facebook integration for over a year. I think our app does what people want it to do. Over the last few weeks we’ve been working on a tighter experience. No tricks. Nothing special. Just hard work.

What would be your advice to the independent musician today?

I heard this piece of advice somewhere. I’m sorry I can’t can’t give the appropriate credit but it was someone from Pandora I think. Might have been Tim. But here it is: Hire the 5th member. Add someone to your band that just takes care of your social media, marketing and the day-to-day management of the band. Pay her or him like a member and treat them like they are as important as your lead guitarist. It’s good advice because it bridges a gap that I was having trouble bridging in my mind before hearing it. We’re teaching these artists that they have to run their art like it is a business. They have to fight for every dollar, play shows, promote themselves, be savvy social media pros, create buzz about product launches and monetize 1000 different ways, but they mostly just want to make music. How do you get someone invested in your band and only your band like a manager? Well this is how. You need the guy that plays the Twitter.