Disrupting the music industry with tech

Disruption is an often-uttered word around tech but in the world of the music industry, it’s often met with hostility and resistance. Established labels, promoters and publishers in particular are keen to keep how they do business the same as decades ago, despite the onslaught of tech into every facet of the industry. Things change slowly.

For Donal Scannell, who has spent a lot of time in both the tech and music worlds, the disruptive spirit of tech is something that has inspired him to question his processes when working in music.

“You have the artist and you have the fan and there are things that are really really important,” says Scannell. “In the middle, there’s a lot of waste. The thing about the tech world is it really teaches you about analysing the supply chain. If you run a tech company, you’re always trying to look at the weakest point in the supply chain and that’s where you disrupt.”

Disrupting live music

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In recent years, Scannell has examined how the live music industry and the record industry operates in detail to see what he could disrupt with his company Born Optimistic in the promotion of David Gray's Irish concerts and the release of a vinyl album release of Mic Christopher's Skylarkin.

“I looked at starting the record label from scratch and I went, ‘How do you do this again?’ The last time distributors were really important, but I remember the difficulty getting paid. This time around, there’s no real distributors for vinyl. So I’d to ring all the shops myself and they were really enthusiastic and really interested in dealing with me directly. I am selling online direct to fan. I’m selling direct to Rough Trade in London, so maybe I can sell direct to the best record shops in the world and avoid distributors completely?”

Adios middle men

The live music industry is where Scannell sees the most opportunity to make some smart changes, suggesting that a promoter of a show in the 3 Arena could raise the percent of revenue from tickets that goes to the artist from 36 per cent to 59 per cent by negotiating the rental and box office fees with the venues.

“The highest box office fee I will tolerate as promoters is 10 per cent. I will try and make the box office fee plus venue rental between 15 and 17 per cent of the gross ticket price – whereas with some venues, that could come to up to 35 percent of the gross ticket price. We knock out about another 10 per cent through savings on things like towels. Some promoters will charge you €250 a night for towels. Whereas we’ll do a show and we will just go to Dunnes and buy the towels and recharge what the towels cost. So you could have €750 for three nights’ towels versus €130 for the cost of the towels.”

Scannell's tech experience has given him the knowledge and tools to utilise plat forms such as Amazon, Tictail and Shopify if he doesn't like the offering by ticketing companies elsewhere.

“For me it’s like why give away a vast amount of your ticket price for something that costs little to deliver? A ticket is a smart email. Now what are the costs associated with that: credit card card costs of around 3 per cent handling cost. What else does it cost to issue a ticket?”

Questioning ticket value

Ticket buyers are often looking for reliability and security in ticketing. By selling tickets through David Gray’s website, the fan trusts the transaction as it’s validated by the artist. Scannell says these tech companies’ cloud services are are set up to cope with surges in purchase demand.

“We’re using the tech backend of massive global companies. So by definition that is scale.”

Value is something that Scannell considers when pricing a David Gray show and he takes his cue from the price of Christy Moore tickets, as the artists have two of Ireland's biggest selling albums.

“If you you look at the prices of David Gray and Christy Moore tickets, they’ll always be within a euro of each other. It’s not about what David Gray wants for a show. It’s about what feels right and where the value is.”

Scannell has an issue with most gig price tickets being too low as it can increase demand for a single show and has allowed the rise of secondary ticketing websites.

“The customers don’t realise that they set the ticket price by buying it or not buying it. Every single ticket price in the world is set by that. So then Seatwave and Viagogo come up because the cost of a show and what the public says a ticket is worth are not in sync. So all these companies are actually doing is allowing for a correction of the ticket price.”

Scannell is planning on releasing more records, old and new, on his label and to continue to question the established methods.

“I got a Walkman when I was nine. I remember how music made me feel then and it’s the same as how music makes me feel now. Technology doesn’t change what music does for you. Technology is all about distribution and delivery. What one is able to do from Dublin with the right attitude and the right software and the right contacts, just wasn’t possible.”