Can a subscription business model work for live music?

October 8, 2014, 5:31 PM UTC
The Kooks In Concert - West Hollywood, CA
WEST HOLLYWOOD, CA - AUGUST 08: Musician Luke Pritchard of The Kooks performs at The Roxy Theatre on August 8, 2014 in West Hollywood, California. (Photo by Chelsea Lauren/WireImage)
Chelsea Lauren/WireImage

How do you discover new live music? The question serves as a litmus test to quickly separate the concert-going enthusiast from the casual listener—those who actively seek to discover a new act, versus those content with waiting for someone to invite them to it.

Most of mobile applications for this activity on the market today cater to the first group. Bandsintown, Timbre, or SongKick, for example, will scan a person’s digital music library and alert them when artists they like are coming to town. That’s the catch, of course—they’re only effective when you’ve already demonstrated interest.

Jukely, a relatively new entrant into the category, takes a different approach. Its founders want to figure out how to use algorithms to expose casual listeners to new artists playing music similar to what they already like. Seems simple—yet it is surprisingly hard to convince most people to leave home and see an unfamiliar act, whether it be a music artist, Broadway show, or dance troupe. (It’s one reason why opening for another act can be such a boon.)

On Wednesday, the New York startup rolled out a new product that might ease that friction even more: Jukely Unlimited. The service allows for unlimited access to concerts for $25 per month. Jukely says it has signed contracts with 13 different venues in New York City, where the program will first launch. The idea? See whatever show you want—far fewer strings attached.

“The service will be like Netflix,” says Bora Celik, Jukely’s co-founder. “You don’t get the latest movies on Netflix streaming, but you get a lot of stuff. There will be a lot of good stuff here.”

The service will be invite-only at launch, though Jukely has created a waiting list on its website for those who are interested. Subscribers will get regular emails notifying them of shows that are available for reservation, generated by a recommendation engine tracking the music listening habits of 27 million people, Celik says.

The business model of Jukely Unlimited mirrors the one that has taken over recorded music. In that category, per-album and per-song downloads are giving way to subscriptions. Similar shifts are occurring in software (“in the cloud”) and other license-based businesses. Each industry, after initial resistance to the concept, comes to find the recurring revenue attractive.

Jukely began as an app to sell concert tickets, and gradually built its reputation among promoters and other industry partners to make the switch. Celik declined to offer detail about the new business model, acknowledging only that a percentage of revenue will be split with participating parties involved in putting on the show. Except the acts, of course—artists are typically paid a flat fee for appearances.

The company’s greatest challenge is obvious: managing customer expectations around what will and won’t be included in its program. Music albums typically cost between $10 and $20. Digital songs cost about $1. But concerts? The range of prices is extreme, based on the act, the venue, the market, and more. There is also a fixed amount of supply. Avoiding customer disappointment because the sold-out Drake concert isn’t an option is a key concern for Jukely.

“We’ll be closely keeping an eye on the math that matches supply and demand so the service indeed gives the unlimited concerts feeling,” Celik says. “We’ll have a rotation system built that’ll match our members and upcoming availabilities so it will be first come first serve until our availability is fulfilled, and we’ll send members messages when we have availability for them.”

Investors familiar with the industry seem to be convinced. On Wednesday, Jukely also announced $2.4 million in seed funding from Northzone (an early Spotify investor), 14W Ventures (led by former Warner Music executive Alex Zubillaga), Larry Marcus (Pandora, SoundHound), and Hany Nada (Soundcloud, Alibaba).

The company’s vendor partners are also optimistic. If Jukely’s service can create demand for small artists that promoters wouldn’t typically take a chance on, keeping the venue open an extra two days a week becomes financially attractive. Celik would know—he’s a former concert promoter.