The World’s First ‘Ethical’ Streaming Music Service Shuts Down After Two Months

The World's First Ethical Streaming Music Service Shuts Down After Two Months

Looks like the world wasn’t ready for an ‘ethical streaming music service’.  Neither was Humbolt CEO David O’Brien.

In order to combat what he saw as unfair payouts in the music industry, former musician David O’Brien had an idea.

Why not create a streaming music service designed to bring unique and often overlooked music to the masses?

His idea – Humbolt – would allegedly support the indie music industry in a sustainable way.  Available on iOS and Android devices, O’Brien envisioned a world where artists and labels benefited directly from fans.  At $2.99 a month, he promised users an inexpensive indie music experience.

There was just one problem.  CEO O’Brien was completely inexperienced.

When your streaming music service promises too much.

When I first heard about Humbolt – I’ll admit – the service sounded promising.

Instead of offering users millions of songs they’d likely never listen to, O’Brien offered users two options.  For $2.99 a month, they could subscribe to individual artists or individual labels.  Subscribing to an artist would unlock their label’s catalog.  Subscribing to a label unlocked their broader catalog.

Listeners would only stream music they’d likely miss on big-name platforms, like Spotify and Apple Music.  In addition, O’Brien vowed the monthly fee would go directly to artists and labels.

Having signed deals with over two dozen labels, Humbolt proudly proclaimed,

Support small business on Humbolt.  Shop local.  Listen Global.

Personally, I pay for Spotify Premium.  Honestly, I stream no more than about a hundred or so tracks each month.  Who has time to listen to over 40 million tracks?

Yet, having thoroughly researched and written about the digital music scene for the past several years, I had my doubts.

First, what made Humbolt so different from other small-time streaming music players?  O’Brien’s company didn’t have major deals with Sony, Warner, or Universal, guaranteeing the service would eventually flounder.

Second, what did users really know about the company?  Few have heard of O’Brien, and even fewer about his team.  With the company giving 100% of its monthly subscription revenue to users, how would Humbolt sustain itself?  Ignoring this question, O’Brien boasted that he didn’t receive payment from the service.

Last time I checked, you need a stable source of income to pay the bills, including the rent.

Third, with such a limited catalog, why would anyone pay for the service?  O’Brien pinned his hopes on people desperately yearning to support their favorite indie artists.  But how many people would pay extra on top of their already-existing streaming subscriptions?

Besides, can’t they already support their favorite indie musicians through Bandcamp, Patreon, and other well-established platforms?

Instead of answering these questions I posed in my initial article, O’Brien went on the attack.

First, Humbolt’s CEO dismissed my questions as “a hack job.”  Claiming that I wrote against him for not buying “ad space” on Digital Music News (something I frankly didn’t know nor would’ve cared about), O’Brien stated,

2 years of research, outreach, and studying trends show the lifelong lesson that money talks and people are more motivated to champion your service when getting paid.  To suggest we didn’t put any thought in Humbolt is very telling of the fact you didn’t put much effort in writing this article.

I’m sorry I hadn’t written a glowing approval of your clearly inexperienced service lacking a viable business model, Mr. O’Brien.

In addition, using the same IP address (yes, we track that), O’Brien or his team posed as successful artists on Humbolt to convince readers to use the fledgling service.

We’ve been on Humbolt for a little over a month and we’ve made more money than we have ever on Spotify or Apple Music combined.  This troll has no idea how hard it is to make money these days as a musician and then s—ts on a platform that is trying to figure it out.  Their data can be better but they keep us in the loop on changes.

“We fully support Humbolt.

Again, I’m sorry for checking IP addresses as well.

I admit, Humbolt has fantastic ideas.  A service run by a former musician tailored to ensure indie artists would be discovered and paid well.  Presumably solid deals with over twenty labels.  A low price tag.  What could possibly go wrong?

Unfortunately, everything.

Humbolt has now closed its doors.

No.  People don’t really want to use a limited streaming music service.

In an e-mail sent out to users, David O’Brien admitted defeat.

We’re beginning the process of dissolution.  We, unfortunately, took advice from an ‘industry insider’ that proved to be a fatal error with regards to our finances.  We cannot operate in the US because of it.  As you know, the US is the biggest indie market in music streaming consumption.  That being said, also not having Merlin, Secretly Distribution, Beggars or Redeye Worldwide on board has proven difficult as well.

What ultimately caused Humbolt’s demise?  As O’Brien admits, the service – albeit very promising – lacked a sustainable business plan.

In this day and age, with major streaming music services owning a large chunk of the digital market, there’s little room for the little guys.  Unless you partner with the majors, it’s difficult to succeed without a seriously innovative model.  O’Brien found that lesson out the hard way.

I expected Humbolt to eventually close down.  I just didn’t expect O’Brien to throw in the towel so quickly.

 


Featured image in the Public Domain.

20 Responses

  1. David CEO of Humbolt

    We’re closing down, not because we didn’t have subscribers, but because we took bad advice from someone in the industry who is regarded as a seasoned veteran.

    You keep writing about our business model incorrectly and I wish you would stop.

    Starting a company, especially a music streaming company, is not easy in its early stages is not easy. If you make one mistake it can close you.

    And now a major music entity wants to work with us on something similar.

    This is how it works, Daniel.
    You come up with an idea, gather data, and if it fails you learn from it. Along the way you hope to meet people who share your vision, we have.

    We’re not done. Humbolt is done.

  2. JC

    Imagine writing two – two! – articles about these guys and still not even writing to them to ask for a comment, let alone a proper interview. What is the point in Daniel Sanchez? To rehash other people’s articles and re-write them, badly?

  3. David - Humbolt

    Thanks JC,

    Mr. Sanchez continues to slander my experience. Even with the quote from my email to our users (which he copy and pasted in this article but obviously didn’t read) it clearly has nothing to do with subscribers.

    He uses words like ‘claims’ and ‘inexperience’ to influence the reader into thinking it’s wrong to do (or try) something like Humbolt. Which is pretty shameful in my opinion.

    What I find most offensive about his writing these articles is, if it did indeed succeed in some users not trying Humbolt because of his original article, then he not only affected our business (I can live with that) but more importantly our Label partners.

    Apparently, his goal is not to support independent artist on any other platform outside of the ones he approves.

  4. Paul Resnikoff

    David, you’re leaving out the part in which you email/phone/LinkedIn bombed multiple members of DMN, over and over again, thinking that somehow this would cause us to change our initial article on Humboldt. That’s not how we operate.

    Not everyone is going to like or agree with your model. Daniel found your thinking extremely flawed. It looks like the market has the same reaction.

    • David - Humbolt

      I never called anyone at DMN, ever, I had a few back and forths with Daniel and Noah, and I wrote to you once on Linkedin after the article wondering why no one on your team chose to write or call me about your first article when YOU knew who I was.

      You keep making shit up over there and it should be alarming to your readers.

      By this follow-up article alone Daniel clearly doesn’t understand how music streaming works, our business model, and why we’re closing.

      We get it. You love Spotify. Fuck anyone trying anything new.

      • David

        additionally, you keep leading people to believe it was about subscribers when it was, in fact, a legal matter.

        hire a fact-checker, Paul, and stop making shit up.

  5. Curious Admirer

    David,

    Who is the industry insider who led you astray? Inquiring minds need to know!

    • D

      I would never do that. Regardless of the bad advice we ultimately made the decision.

  6. Indie streaming

    Look indie only streaming catalogue is a bad idea and only a company that can’t see past their own lack of a business model would even consider launching such a thing in 2018. Honestly, you can say what you want about legal issues, but too many people subscribe to major platforms for a platform with limited catalogue to ever take off.

  7. D

    luckily, we have the data that suggests otherwise. there are a few niche market services that are working. none of them will be Spotify or AppleMusic (and the comparison is completely unfair). None of them (us) will be billion dollar business.

    What’s appalling about this article and that last comment is you define success based on assumptions when you haven’t actually seen data, done research, received feedback. 1 million users on any niche service can be a success.

    We never said we’re going to take over the choice of service. Just provide a choice. We’re not against Apple or Spotify, they actually helped the industry. Our goal was to help the little up and coming acts get a bit more if they could.

    Shitting on that says a lot about you

    • Eric

      I can’t quite understand why you are so defensive about a business that has failed badly within two months. If you want to be open and transparent thats one thing. An app is not cheap to make. You have obviously invested time and money into building your app and yes it would be a great niche business but you talk about data to back up your idea, but at the same time openly admit that you took bad advice on legal matters. Your data is probably wrong too. So many startups have tried and failed this. This isn’t the first indie music company to offer low price entry level plans. Drip.fm tried this and failed. The data is really very simply. The number of people subscribing to big platforms is rising by 4 million a month in the USA alone. That tells you that it becomes harder and harder to find a “niche” for the same catalogue even if the intentions are to have an alternate and your market research tells you people may pay 2.99 to help support their favourite acts.

      • David

        There wasn’t enough time to even consider it a failed business, no one gets a million customers in a matter of weeks, so Daniels narrative is working on you.

        We’re not done. We’re actually partnering with a strong distributor as a plan to reboot. After which I expect nothing but the same from Daniel.

        Ultimately this is fake news at it’s best.

  8. Dear David

    The goal of helping acts get more if they could goes against the data that 5/10 people prefer to pay $0 for music and 1/10 would pay for 2 streaming services. You are a business first and foremost. The 2.99 would be going to the artists and you have to pay staff, pay an app, pay for licenses, pay a salary. How can you honestly argue that in order for this to take off it needs scale and in order to get scale it needs money. You would still be open if you had the money to get the licenses and resolve the legal matter. You couldn’t raise the money because the business model is shockingly ill judged. No one minds competition. Having another option is fine but not when you can’t keep the doors open after a few months and this is the problem with smaller platforms. You don’t want to disclose your investors, how much they lost, the legal issue, but you want to defend the data you have that proves the demand for an indie streaming service is there.

  9. Genuine Question

    Why didn’t you get licenses from a white label such as 7digital and have beggars music, Merlin, Secretly Distribution, Beggars or Redeye Worldwide on your platform?

    • David

      Getting licenses from those services def streamline the process but they are costly. You are essentially paying a markup for a one-stop shop. They are good for digital download stores but not for streaming services. Otherwise, everyone would use them and not distributors.

  10. Steve

    The concept was doomed to failure and the founder is still blinded by it. Lets say your app cost 500k to develop and you give $2 to the artists and 0.99 of revenue is left and Apple tax you on that and then you have to market it so people know about it.Then you have to pay for food. and update the app and its a loss making business. With subscribers.

    • David

      who pays $500k for an app? If you’re looking to build an app we’ll do it for you.

  11. PD

    Turntable. Earbits. Bop. Songza. Boomio. Boom. And now Drip. Humbolt.

    Now why am I being pitched 5 indie streaming services “thats better for artists” in Los Angeles on the daily basis? Because rich investors will always be dumb and spend money on new things till they fail!

  12. Anonymous

    Who knows if half these comments aren’t from Digital Music News? We have no way of tracking their IP addresses. And considering Daniel continues to mislead his readers, and Paul clearly signs off on his bullshit. There’s no way to know if anything they do is valid.

    I’m wasting my breath on here and thankfully this will be the last time I consider publicly replying to DMN bullshit.