8tracks is a crowd-curated internet radio service used by 5m+ people every month – 88% of which are millennials. Recently, 8tracks has been experimenting with a new crowdfunding-inspired investment strategy, allowing their users to actually own shares in the music streaming service. Below, 8tracks founder and CEO David Porter shares more about their equity crowdfunding campaign.
8tracks is built on a simple premise: the best music discovery experiences happen through people. Anyone can make a playlist on 8tracks to share a moment in time — an experience, an idea, a feeling — in the form of a highly personal online mixtape featuring a minimum of 8 songs (or tracks), hence, the name 8tracks. Listeners benefit from thoughtful selections packaged for “lean back” listening.
Two key areas differentiate us from Pandora and others. First, there is a person, not an algorithm, behind the playlist. Each playlist tells a story, and the playlists are organized in human terms like activity and mood (e.g. study, workout, chill) as well as by genre and artist. Second, the listening experience runs deep, spanning every imaginable style, ensuring a greater degree of music discovery and less repetition. Because of the musically adventurous nature of our users, indie artists make up ⅔ of all the tracks we stream — totalling around 15 million listening hours each month.
8tracks recently began accepting investments from the community — creating one of the very first music companies owned by its users. 8tracks is driven by our community — it’s our community that creates, shares and experiences the user-curated playlists, so many of our users already feel emotionally invested in the 8tracks platform. Accordingly, it made sense to enable the community to actually own part of the company in economic terms.
Last June, equity-based crowdfunding from non-accredited investors was introduced – allowing 98% of Americans to invest in private companies. Essentially what that means is that 8tracks can raise money by selling equity in the company to people who want to own shares in 8tracks.
As a first step, we sent an email survey to our 17m registered users to gauge interest in investing in 8tracks. Over 35,000 people responded, resulting in an aggregate $33m in interest.
We’ve filed with the SEC, and on June 14th, we opened our crowdfunding round to the public. This funding will help us improve the product, build out our DJ Library, introduce support for new platforms and integrations, and bring 8tracks to a global audience.
Are there parallels are between this process and the way in which independent artists rally their fans to crowdfund a new album, video, or tour?
The economics of the music business can be challenging at all levels. For an artist to successfully crowdfund a project, they need to creatively engage with their fans to show the idea behind the project – much in the same way we’re reaching out to our community right now in a variety of different ways. For example, in the weeks leading up to our crowdfunding round, hundreds of DJs and artists rallied to show their support for the campaign by creating these handmade playlists to #back8tracks.
What’s next for this equity crowdfunding campaign?
After months of preparation, 8tracks began accepting investments from the public on June 14th. As an advocate and champion of the independent music sector, we welcome your investment! You can get started at https://www.seedinvest.com/8tracks/series.a. The round will remain open until we reach our $11m target.
How can artists get their music on 8tracks?
8tracks has deals in place with most of the larger independent labels and distributors including CD Baby, Tunecore, INgrooves, Naxos, Dim Mak, Symphonic, and DashGo. Your music will automatically find its way onto 8tracks if you are with one of those companies. Artists can also create a customized profile on 8tracks here.
For labels interested in working more closely with 8tracks or if you have any questions, please contact Dick Huey at [email protected].