Five Questions for Andy Young – CEO, Merchluv

Andrew Young – CEO, Merchluv

By Jamison Antoine

Imagine being able to listen to your favorite band on Spotify then buy one of their T-shirts in the same experience, without skipping a beat. That’s what the new start-up Merchluv envisions, as the first company to streamline the $2.2 billion dollar U.S. music merchandise market with a single point of access for artists and suppliers. In this edition of “Five Questions,” I spoke with MerchLuv CEO, Andy Young before the 2013 launch about how he plans to open his service up to music services, online video, ticketing sites, and mobile applications.

Q1 – Merchluv has a pretty unique business model. Can you discuss how it went from a site that fostered collaborations between craftsmen and artists a few years ago to what it is today?

Andy Young – As we were exploring ways to democratize the merch product development side of the business, we found that there was a massive disconnect between what’s happening in the digital music space and the ability to move physical products through that system. We realized that there was a far greater challenge on the delivery side of the equation that would have to be met before any innovations on the product side could really bear fruit. Active music listeners play about 45 billion music tracks and videos each month in the U.S. alone, all without the ability to purchase merchandise. Adding a merch component would go a long way towards offsetting the declines in recorded revenues, so we directed Merchluv’s focus to better synching up the merch market with the way music is discovered and consumed today. With that as our goal, Merchluv evolved into a platform to collect, curate, and standardize access to all available music merchandise regardless of the supplier, artists or genre, so that an artist’s merchandise could be as accessible to their fans as the music, regardless of the platform or device. As a business, our stated goal is to be the premier music merchandise platform and fundamentally disrupt the way merch is marketed and sold.

Q2 – The application sounds like a win-win for established artists with extensive catalogs, but how can emerging artists participate in what Merchluv offers?

AY – Emerging artists more than ever need multiple revenue channels to survive in today’s music industry, since revenue from music sales can no longer sustain careers and streaming hasn’t yet grown large enough to make a significant impact. The beauty of the Merchluv system is that it can scale along with an artist’s career. From one SKU [product] to hundreds, doesn’t matter. Right now we are focused on working with the major merchandise vendors, but our target for 2013 is to open up the marketplace, so that all artists and authorized vendors, both big and small, can participate and profit from an increase in merchandise sales.

Q3 – Many of the streaming services are under fire to turn a profit and to pay artists a decent royalty.  Why should a site like Rdio or Spotify integrate your app with theirs? What’s in it for them?

AY – Much of the benefit of streaming services is their opportunity for users to discover of new music and artists. But today, even with billions of monthly streams, there’s no solid data trail that links discovery on these services to any subsequent purchasing activity such as merchandise. Integrating the Merchluv platform would allow a streaming service to show artists a one-to-one connection between the streaming activity they receive and the merch sales that ultimately result. That allows artists to evaluate the impact of streaming services beyond just their royalty statement. The streaming services benefit directly by participating in a new ancillary revenue stream, but perhaps as important, can show they are artist friendly and able to help them drive additional revenue through their platform. Management on the other hand can build a complete campaign that incorporates merchandise and tailor for each sales channel, optimizing the impact. 

Q4 – You’ve tested Merchluv with GrooveShark and at live events so far. Outside of streaming and ticketing what other types of partnerships can we look forward to seeing in 2013?

AY – As a platform, we want Merchluv to enable merchandise selling wherever it is most relevant to the artist and their fans. Merchluv can be integrated not only into streaming services, but also video sites and even live at events. Merchluv is more than anything, a technology platform that exists to further monetize the fan at whatever moment they are engaged most with the music. Our universal database aggregates all vendors and artists, providing a standardize product feed, and our API will allow developers to integrate a robust merchandise selling solution on-line or mobile, without having to deal with supplier management or customer service issues. You can look to us to make announcements with a broad range of companies including merchandise vendors, music services, technology partners, artists, and management groups.

Q5 – When I think of the masters of merchandising, groups like Kiss, ICP, and Nine Inch Nails come to mind. With that said, who would be your ideal artist ambassador for Merchluv?

AY – Our ideal ambassador would be an artist that embraces merchandise as an important and profitable part of their business and as a method to engage fans around their music, wherever and whenever that may be. Most people think about pop music, but merchandise selling is a business tool that all successful musicians have in common. Merchandise crosses all genres, for example many symphonies sell merchandise, as do jazz musicians and Christians artists. Our goal is to break down the barriers that make online merchandise selling difficult, and begin to grow the actual market size by making it a more efficient business proposition while creating value for the entire stream; artists, management, supplier, music service and fan. Interestingly, in many ways, the existing merchandise market parallels the recorded music business—it is largely controlled by a handful of large licensed merchandise companies. The reality is when you look at a genre like pop music, you will find that a vast majority of those artists actually run their own merchandise business, but they have extremely limited access to sales channels outside of their own website and FB page.

Bonus Question! – Since fans are used to streaming services in the background while they work or work out, how do you influence their natural behavior to actually purchase items from what used to be a passive place of engagement?

AY – Streaming services can be both passive and active. At the very least, there’s some level of active participation to get the stream going, manage playlists, or to change options. For those users, Merchluv is offering a new component to engage them that doesn’t currently exist, so there’s the opportunity to extend that moment of engagement before their active attention turns to passive. But there are also other more active users—particularly those who use on-demand streaming services like Spotify—who are more directly engaged. They’re streaming music but also reading up on similar artists, or searching for similar songs while making a playlist, etc., this is especially true for mobile users. For them, Merchluv adds another layer of depth to that experience. In a broader sense, we want to establish an identifiable moniker that becomes a trusted and predictable source for authentic merchandise wherever that may be encountered, and where fans will know they will have a satisfying experience, have access to everything that is available in one place, and know that artists are being appropriately compensated.