A New Way to Masterbeat

The premier dance music compilation label is pioneering a new online downloading service.

Written by D. Michael Taylor

Being a record executive used to be glamorous. Criss-crossing the world in company jets, wining and dining celebrities on an expense account, living out the rock-‘n’-roll dream in high style. But after years of steadily declining album sales, the multi-billion dollar music industry is having a crippling identity crisis.

In a dramatic sign of change to this once lavish executive lifestyle, EMI’s new chairman sent out a memo late last year detailing many of the former regime’s excesses. Notable offenses included a $10 million London penthouse that was used only one night every two weeks, and $40,000 spent on candles for an L.A. apartment used to entertain artists.

In May of last year, Warner Music Group, home to heavyweight labels such as Atlantic, Sire, Bad Boy and Elektra, laid off 400 of their employees. In January, Alicia Keys had the #1 selling album in the world, yet it sold a little more than 60,000 copies-the second-worst sales of all time for a #1 album, after the Dreamgirls soundtrack a year previous. In the heyday of the pre-digital world, a #1 album was expected to sell hundreds of thousands of units. In 2000, the Top Ten albums sold 60 million copies, but by 2006 that number dropped to 25 million. Total album sales declined by 16% in 2007 alone. It’s enough to turn a once-coveted career into a fate you wouldn’t wish on your worst enemy.

The major labels tried to blame Internet piracy and file-sharing sites like Napster for this depressing spiral, but evidence seems to point away from a direct link between illegal downloads and plummeting album sales. Certainly the iPod revolution has made one of the largest dents in the traditional music market, but even accounting for digital purchases there is still a general decline in consumer activity when it comes to album sales. There are larger trends at work that no one seems to be able to fully comprehend yet, but it is becoming increasingly clear that the old methods of distributing and promoting music are on the way out, and if you snooze, you will lose in a big way.

One major player that definitely hasn’t fallen asleep at the wheel is Masterbeat. As the clock struck midnight on New Year’s Eve, Brett Henrichsen and his team launched the beta version of their exciting new online portal for dance and electronic music. Masterbeat.com is an ambitious project two years in the making and promises to become the premier resource for those seeking the best in mainstream dance music. Masterbeat has had a loyal following in the dance world for over a decade. But the brand is more than compilation CDs. By throwing parties and promoting world-class DJs, artists, and producers, "Masterbeat" became synonymous with quality and a lifestyle that obviously means a lot to everyone involved-none more so than President and Founder Brett Henrichsen.

Henrichsen at the Helm
Working at IBM in the early ‘90s, he believed no one was releasing the kind of top-notch club tracks that he enjoyed when he went out in a consumer-friendly format. "I always loved music," he said. "I would get the vinyl and rip it into my computer. At that time, a CD burner was $9,000, and a blank CD was $120. So I was making CDs for all my friends of all my favorite dance music. And that’s how Masterbeat got started." With so much great music at his fingertips, Brett tried his own hand at DJing, and quickly became a fixture on the Circuit.

Now Brett sees another gap in the marketplace. "People go out, they hear the new Kristine W. track and they want to be able to go home that night and download it. They don’t want to wait for the CD to come out. And if they can’t find a legal site to download it on, they’ll go find an illegal site. Our goal is to create the ultimate legal site to be able to download everything."

Kerri Mason, who coves dance and electronica for Billboard, said that distributing dance music online is "the difference between surviving and not. I don’t even think it’s a trend, it’s just reality. Most dance fans want to download. I think most dance fans do, even when it’s not legal, so you have to rush options to them where they can get things in a legal way." Of course, iTunes dominates legal downloading but has to adhere to strict street dates. This makes the lag between hearing a new remix at an event and being able to listen to it on your iPod excruciating-not to mention the spotty, limited selection. The only serious corollary to Masterbeat.com currently is Beatport.com, a site designed for wonky enthusiasts that Kerri Mason refers to as "‘pro-sumers," such as a DJ looking for tracks. Beatport can be overwhelmping for the average person.

Masterbeat hopes to fill the gap between iTunes and Beatport. , more mainstream and in touch with the larger dance world. They’re signing agreements with major labels that release dance music, like Sony BMG and Warner Brothers Universal, and have secured the help of Hosh Gurelli, who ran J Records under Clive Davis, and is regarded as an industry heavyweight.

But Will It WorK?
The shift away from CD production doesn’t just lower overhead costs, it speeds up the process of getting music into the hands of the consumer to a fraction of the time. As Brett explains, "One of the things Masterbeat will have is an entire back-end portal, something no one else has ever done. Labels and artists and DJs can log into it and upload their content, upload their mixes, get sales reports, upload their charts and their playlists. So there’s a whole other system running in the back end for them to get their stuff into our catalog."

Licensing every track that makes a splash at a particular event used to mean producing the event CDs beforehand, which made getting the freshest, most exciting material impossible. Now they can simply hand out cards that allow people to go directly to the site after a big party and download an up-to-date playlist of everything they just heard. Is there a huge profit margin to be made here? No one is sure yet-even huge acts like Radiohead are experimenting with giving their music away for free and focusing on live performances and merchandising.

So far, so good: In two weeks since the beta launch, hundreds of copies of the Alegria CD sold online. "The number of people who have signed up and bought one or two tracks just in the first two weeks is astounding," Brett said in late January. The major launch will take place in March at the Winter Music Conference. If you can’t catch any of the sets in Miami, just long onto Masterbeat.com and get the party started.

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A New Way to Masterbeat

The premier dance music compilation label is pioneering a new online downloading service.

Written by D. Michael Taylor

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