Nov. 1 (Bloomberg) -- In March, a song by 22-year-old music producer and songwriter Moscow Mark landed a brief spot on a Comedy Central (VIA) roast of Donald Trump. Though this was Mark’s first work to air on television, the placement didn’t require any effort by his manager. Instead, Mark uploaded the track to an online music database called Jingle Punks that he had started using last year. A Comedy Central music supervisor listened to Mark’s work and licensed it. While the Russian native doesn’t expect to earn a living via Jingle Punks, he welcomes the exposure. “My goal is literally, like, marketing,” he says.
Jingle Punks is a clever spin on the music production business, an industry born a century ago to license music to movie producers. Rather than follow tradition and hire composers to craft music for specific genres, three-year-old Jingle Punks has aggregated about 50,000 tracks by 3,000 mostly unknown performers who seek airtime, from indie rockers to rappers. The 27-employee New York company picks tracks it deems likely to get placement on TV shows and commercials, labels them with keywords, and adds them to its searchable database. It sells licenses for prices that range from $500 to $80,000, depending on frequency of use and format. Jingle Punks also does custom composing. The company splits licensing fees with the artists.
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Few who use the service to sell music will get rich from the proceeds. While co-founder and Chief Technology Officer Dan Demole says one musician made $15,000 from a Wal-Mart (WMT) commercial -- and notes that Jingle Punks has paid out hundreds of thousands of dollars to others -- he says “it’s the ones who use us as just another service in a long list” who do best. “They’re touring, they’ve got their music in 20 places, they’re on iTunes, they’re doing their own social media,” says Demole, 32. “‘Oh, and by the way, I just got placement in a Pepsi commercial.’ And then they leverage that to try to garner more buzz.”
As television budgets shrink, strafed by the Great Recession and stretched by the proliferation of hundreds of content channels, demand for production music has exploded, says Shawn LeMone, vice-president of film and television at ASCAP in Los Angeles. “Production music libraries are one of the only strong growth areas in the music industry,” LeMone says. Debra Young Krizman, executive director of the Production Music Association in Los Angeles, estimates the worldwide market for production music to be as big as $500 million. She says there are hundreds of production music libraries today, up from a few dozen 20 years ago. To stand out from this cacophony of competitors, Jingle Punks touts the hipness of its music and its technology’s ease of use.
Unlike its counterparts, Jingle Punks sees its software -- not just its music -- as its vehicle for growth. Beyond making it easy for time-strapped editors to find quality tunes on the cheap, the company can handle delivery of digital files and rights management, making it easier to sell multiple formats of shows overseas and collect royalties on the music used in them. “Every minute of music we play in a TV show is worth some form of dollar every time it airs in the world; we follow those dollars,” says co-founder and Chief Executive Officer Jared Gutstadt, a musician and former editor and composer for “Chappelle’s Show” on Comedy Central.
Gutstadt, 34, met co-founder Demole at a Black Keys concert in Brooklyn in August 2008. The two launched Jingle Punks out of Gutstadt’s Manhattan apartment two months later. Demole, who had developed video games for Electronic Arts (ERTS) and military simulations for defense contractor L3 Communications (LLL), says his experience outside the music business helped. “We came at it from a very practical, ‘what’s wrong with this industry and how would we fix it - - how would we do it because we don’t know any better?’”
Jingle Punks, which raised $800,000 in equity in 2010, is profitable and revenue will be just under $5 million this year, the founders say. With placements on hundreds of television programs and commercials in the U.S., the company is expanding internationally. The plan is to aggregate the “world’s largest collection of international music” and increase placements for Jingle Punks’ fast-growing stable of artists -- about 100 a week upload tracks for consideration, says Gutstadt. “There is no other library in the States that offers that type of reach.”
In September, Jingle Punks launched a version of its database in Brazil, teaming up with music production studio A9 Music in São Paulo. The studio pays Jingle Punks a fee and a percentage of royalties to use its technology. Because tracks are shared between the Brazilian version and the U.S. version, “they’re helping our core business, as well as growing this as a franchise idea,” says Demole. Jingle Punks is using the deal as model for a Chinese operation that the founders hope to launch next year.
As it expands, one hurdle Jingle Punks might face is its reliance on music that it doesn’t control the copyright to, says PMA’s Krizman. Artists who upload their songs can also license them to other libraries, so producers who use Jingle Punks might encounter tracks they’ve acquired elsewhere. “The real problem is that Jingle Punks doesn’t own the copyright and a particular track could wind up in many places,” says Krizman.
The issue hasn’t hampered dealmaking, says Gutstadt, who notes that he’s received requests for exclusivity riders to contracts only four times since he launched the business. Alicen Schneider, vice-president of creative services for NBC Universal, which has used Jingle Punks on dozens of productions, including “The Today Show” and The Real Housewives series, says the site is one of her top three production music sources. “Some libraries don’t necessarily keep up with the times or they get overworked and can’t accommodate the kind of schedules that we have,” says Schneider. “But [Jingle Punks] can -- we’ve never had them turn anything down and the quality’s been there.”
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