Beta Records: Not So Beta Anymore

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Despite a worsening recording industry downturn, music creation and consumption remain quite healthy.

The supercharged creativity is being fueled by digital formats and platforms, a fertile playground for fresh startups.

So who’s the latest?  Enter Beta Records (betarecords.com), a Hollywood-based outfit that just overhauled itself.  The company first started in 2004, recording and signing independent artists while touring the United States in a mobile recording studio.  More recently, Beta has been rather low-profile, though the company is now pushing an ambitious version 3.

So what’s the model?  On the content side, the company has aggregated roughly 100,000 independent and unsigned artist profiles, complete with recordings, ringtones, photos, and various other assets.  “That’s more content than ReverbNation,” chief experience officer Chris Harper told Digital Music News.

Sounds a bit like the original mp3.com, though the company trolls its collection and actually signs, records, and grows a small crop of artists.  And the larger pool of unsigned bands can sell their content  and manage followings through the site.  “We went after the content from the beginning,” explained Beta president Christian Honetschlaeger.

The signed deals revolve around digital assets, as well as synchronization licensing and song-specific opportunities.  But the non-exclusive deals are limited to three songs, and do not include aspects like merchandising, touring, and physical sales.  The group plans to sign roughly 100 artists by the tail end of this year, and split revenues 50/50.

The rest get to keep 85 percent of their revenue, according to the company.  Participating artists can also solicit cash through digital tipping, with micro transactions powered by Javien.

On the community side, Beta is actively cultivating a large number of genre-specific clubs, led by the most active and knowledgeable fans.  Those tastemakers are rewarded with a cut of resulting advertising revenues, and authority within specific genre regions.  On top of that, the company is layering live show listings, online radio, affinity recommendations, and a host of social networking aspects.

In the end, the Beta vision involves massive fan and artist participation, and the creation of a highly-successful A&R engine.  Whether fans will pay for content in mass quantities remains speculative, though models like eMusic have shown that well-constructed communities can generate dividends.

Others have fared poorly, and it remains uncertain whether Beta can generate healthy revenue totals quarter after quarter.  So far, a small group of investors is betting yes, and plunking cash into the startup.  Honetschlaeger noted that angels have already contributed roughly $2.2 million, and a series A is expected to generate an additional $3 million.

Report by publisher Paul Resnikoff in Hollywood.