06/13/2012 01:02 pm ET Updated Aug 13, 2012

Jay Frank of DigSin Reinventing the Record Label, Part I

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I interviewed Jay Frank, owner and CEO of DigSin, a new singles-focused music company that allows subscribing fans to obtain music for free. DigSin signs new artists to deals that leverage new platforms, social networks and analytics that expose music to a wider audience, building popularity outside of traditional methods.

Prior to forming DigSin, Frank was the Senior Vice President of Music Strategy for CMT, an MTV Network, Vice President of Music Programming and Label Relations for Yahoo! Music, responsible for all the company's music programming, senior music director at The Box Music Network, worked in marketing and A&R for Ignition Records, managed a live music venue, programmed broadcast radio stations and created two local music video shows.

Chris Castle: Jay, tell us a little about DigSin and what brought you to starting the label.

Jay Frank: I started DigSin to implement some positive ideas about moving the music business forward, particularly in trying to define the role of a record label. The idea for DigSin really started with a book I published in late 2009 called FutureHit DNA. It seems like a lot of people have been saying for a long time now that the traditional major label model is broken, but haven't offered any realistic alternatives. My thought was that I don't know if there's a real problem or not but there certainly are viable alternatives to the historical operation of record companies. I worked on the idea for DigSin from the premise of "can a label be built with how people are consuming music today versus how we with how we wish they were consuming music," starting with singles versus albums. I just kept on thinking and returning to that basic idea of a "new" label model. Every time I came up with some problem to the traditional label model I'd find some solution and I'd challenge myself to see how that solution might be able to work financially, both for the label as well as for the artists on the label. And at some point I just realized I either had to take chance and make it reality or keep it as a pipedream and I'd rather not live my life regretting not trying something new and exciting.

Chris Castle: Tell us a little bit about the specifics. From what I've seen your label is very social media-oriented in how DigSin presents itself to fans?

Jay Frank: Certainly social media is a crucial part of how we market ourselves. The most important thing from a consumer's standpoint is anybody can come to our site, sign up through their email address and we will sign them up to our list and give them all of our releases for free for life. It's a promise and commitment that I want to make and I think that, again, that's it's a reflection of how people are consuming music. I'd rather have somebody come and get the music free through a mailing list than having them go and steal music. More importantly, I'm able to go and monetize that relationship through some advertising. I've found that most people listen to a free download once. They're really doing it just to check out the music. At this point in the discovery process I can make roughly as much for the artist by selling advertising as the artist will make off of Spotify and YouTube -- without developing a direct relationship with the fan like we have at DigSin.

Chris Castle: That is a hugely important point -- artists are routinely asked to have their fans benefit someone else like Spotify or YouTube who has at best an atomistic relationship with the fan and inserts themselves between the fan and the artist.

Jay Frank: While we could sit here and spend the entire podcast debating the royalty rates that places like Spotify and YouTube pay, the reality is that I can make those same figures off of the free downloads, so I'd much rather be able to make that money in house through a mailing list that I can communicate with regularly than a third party. I'm perfectly happy if people discover our artists through the third party, too, but I think the artist is better off in the long run doing it the way we do at DigSin.

Because we have a direct relationship with that consumer, I'm able to go and actually work and promote more music to them and be able to cultivate a strong bond that hopefully will then lead to more and greater exposure for all of my artists. The hope is that we can really amplify the fan relationship through social media and then build that story into a successful song and a successful artist.

Chris Castle: That's interesting, I remember when the web first started, we had a big argument internally at Polygram, about how we were going to present ourselves to the public on the web. Polygram, of course, wanted everything to be at and I said at the time, "You know, if someone is looking for Sting, who was on my label A&M, I think they're going to go look for Sting first." They might possibly think of A&M but they will never think of Polygram so why don't we try to connect our artists more directly to the fan by branding off of the artist? But this is an interesting twist because basically what you're doing is you're branding the label site to the fan, and the fan is then coming to the label site to find out about artists on that label and engaging in commerce with the label as well as the artist. Is that a pretty good summary?

Jay Frank: That's absolutely correct -- and I think the properly analogy using Sting. If you go back to 1978 and 1979 when Sting was an unknown artist fronting a band called The Police, the band was on IRS Records [distributed by A&M]. At the time, the IRS Records community of artists was beginning to make a really strong name for itself as being really cool new music because the IRS Records brand meant something to a lot of people. I think to some degree since I'm dealing with new artists I believe that part of our goal is to bring that branding back to record companies. I think that there was a time when that branding was successful whether it was Def Jam Records for hip hop or Island Records for reggae because actually branding a label was an important sign of quality for great new music -- and that made it a bit easier to get fans to take a chance on a new artist. It's certainly no accident that putting my marketing efforts behind social media and online marketing techniques like this mailing list is part of that equation to get new fans to take a chance on our artists.

An extended version of this interview is available in a podcast at Arts+Labs Innovation Central.