How We Bootstrapped A Music Licensing Business to $2.5M/Year
Hello! Who are you and what business did you start?
Hello! This is Aaron Green, Vice President and co-founder of EasySongLicensing.com. We are a 3rd party music licensing agent, specializing in music clearance for any type of permission, for any type of use; kind of like your one-stop music nerd Swiss Army Knife!
Our work involves helping indie artists, record labels, online aggregators (such as CD Baby), filmmakers, studios, video production companies, entertainment lawyers and corporate clients with all their music licensing needs by brokering music clearance deals with music publishers and record labels. These types of permissions include:
- Mechanical song licensing (re-recorded cover versions of copyrighted material for audio-only releases)
- Video synchronization (commercial/advertisements/branding/TV/film/DVD/Video-On-Demand/internet streaming/public display, etc.; any video or visual use of copyrighted material)
- Master rights (use of an original master sound recording)
- Theatrical rights (live stage/musicals/dramas)
- and Print licensing (digital and physical print publications, sheet music arrangements)
We are a bootstrapped company who started in 2005 around the dining table of my house in Robbinsdale, MN, and now we have a user base of over 60,000 clients and growing! In 2018, we grossed $2.5M, and are happy to report a 30% increase so far in 2019.
What's your backstory and how did you come up with the idea?
I grew up with my business partner, Mark Meikle, in Plymouth, Minnesota (Mark is the President of ESL). We attended the Robbinsdale Spanish Language Immersion Elementary School in Golden Valley, MN, starting in the fall of 1987. This was the first public school in Minnesota to incorporate the Spanish language within the curriculum at the same time as English (learning to read/write/speak/math/science in a bilingual fashion K-5).
The old entrepreneurial saying comes to mind; ‘you need to reinvent yourself every 4-5 years to maintain success’, which we can personally attest to. Staying rigid and stubborn regarding your original business plan and execution can only lead to dead-ends if you do not experience any hint of the growth you were anticipating.
There, we were fortunate to meet 10 of our life-long best friends, whom we are still close with today. With the exception of college, Mark and I were classmates from kindergarten all the way through our graduation from Armstrong High School. Mark is one of my childhood best friends, who was always one of the smartest in our grade, as well as the fastest-running kid. Me, being a little overweight growing up, would use my early sales skills and motivation tactics to coach Mark around the running track and various sports in elementary school, so we’ve always been a team since the beginning of our friendship.
After high school, Mark first went to BYU for his freshman year, then transferred to the University of Minnesota in Minneapolis, and I attended the University of Minnesota Duluth in northern MN. There, I met the love of my life, Stephanie, at the ripe age of 20, and graduated from UMD in 2004 with a double major in Business Management and Spanish.
Mark has always been an entrepreneur since birth, as well as a self-taught computer programmer since middle school. He and his brother started a successful window washing company when he was quite young, then sold it, all while still in college. In high school, he created his own video game, similar to Doom (the 1993 game for MS-DOS), where he replicated to perfection mind-bending details of our entire high school on CD-ROM, then sold them out of his briefcase in between classes.
I, on the other hand, have always been a salesman. If it was negotiating allowances, sleepovers, chores around the house, schmoozing with teachers (to always remain in their good graces), trading baseball cards or starting up multiple fantasy football or basketball leagues with my friends, since I was young, all I wanted to do was sell.
In 2004, after my graduation from UMD, I was hired as a “Sales Associate” with the Cintas Corporation (selling work uniform contracts and business/restaurant facility services). Mark was just finishing up his degree from the U of M, and he called me into his small room in an apartment near campus. He told me about his business start-up plan of Legacy Productions, where he wanted to record school and church music groups (choirs, bands, orchestras, praise bands, etc.) and sell CDs as fundraisers.
I, only 6 months into my first “real” job, immediately knew this would change my life (for better or worse), and as a cocky 22 year old, I just knew in that instant that I could help lift this off the ground and build a strong business. This was surprising to say the least in the eyes of my wife, telling her I was going to quit this corporate sales job to start this new business (which, in retrospect, I deeply regret the fact that I did not consult her first), and above all, our new “corporate headquarters” would be in our home in Robbinsdale, MN. This would be my first big “sales test” in which my wife cautiously accepted because she saw how passionate I was to launch, and above all, has always believed in me.
We started out with blank sales spreadsheets and virtually no church or school connections, but I had learned the art of cold-calling at Cintas, and my ambition far outweighed my talent, so I began to set face-to-face meetings with church and school music directors in the Minneapolis/St. Paul metro and surrounding suburban area. Getting meetings by promising no up front investment to the prospects, while promising full service album production proved to be much easier than I had anticipated, but backing it up with real results (and little-to-no experience doing so) was obviously the hard part.
Luckily, we hired a very talented producer/sound engineer named Chris Ashwood, who is a dynamic person and character all on his own, came to the table with a lot of experience and know-how to produce beautiful recordings from start to finish. He would always put on a show with his Jack Black/Chris Farley personality, and naturally many clients wanted to keep working with him.
He definitely helped complete our one-stop mobile recording production shop where we recorded on-location, handled the post editing/mixing/mastering, CD graphic design, marketing/promotion (with providing individual sales incentives for each choir and band member) and CD duplication. This is how we learned about copyright law, licensing procedures and began establishing relationships with music publishers before we officially started Easy Song Licensing.
We quickly established a local brand name within this niche market, in which we expanded into greater Minnesota and Wisconsin shortly thereafter. After 3 more years trying to perfect this service, we discovered that we needed to expand even further, so we began finding other recording producers in Chicago and greater Illinois to see if the school and church markets would respond in the same manner as MN and WI (luckily it did).
Within 5 years of launching Legacy, we ventured out to the east coast by following this same template within Boston, DC and Connecticut. The recession did not help us, but the problem with this business model was the fact that our profit margins were already way too thin to give us a healthy ROI since it was very expensive to produce 1 album from start to finish after paying the producers, graphic designer, publishers and CD manufacturers, and the fact that CDs were becoming less and less in demand within these markets. At the same time, music directors began to invest more into their own in-house recording technology, making it tougher to grow. Enter Easy Song Licensing.
Take us through the process of building the business and your services.
Around 2008, Mark sensed that the school and church mobile recording business would not make us billionaires, so he became quite sophisticated with mechanical song licensing laws, and had built a website to organize and maintain our licensing registration, ongoing reporting, royalty disbursement and publishing contacts. Like writing a hit song, he envisioned a new business to help the average indie artist bridge the gap between themselves and large music publishers, so we invested in the domain name “EasySongLicensing.com”.
At this time, we were knee-deep in Legacy recordings, in which I specialized in handling the sales and marketing department, and Mark did all the bookkeeping, licensing and website maintenance. We worked extremely hard and kept trying to expand further and further, just earning enough for us to keep the same salary for virtually 10 years, leaving us even more hungry, and unsatisfied with our career and business goals. Something needed to change. We needed to diversify and take the music industry knowledge we had acquired, and turn it into something special, not just status quo.
Meanwhile, in the independent song licensing world, at this time, there were basically 2 competitors; the Harry Fox Agency and Limelight. HFA is the original US licensing agency since the 1920’s connecting most major and mid-level publishers and copyright holders with the public for audio-only album releases and singles. Limelight was their main competitor at the time, and we were not even a blip off the radar. ESL was not a full-time business to start (2008), in which Mark handled this in his small pockets of time and I was still trying to expand our Legacy recording business. Then, all of a sudden, in December of 2014, our entire lives changed significantly when Limelight announced it was shutting down and leaving our industry.
Describe the process of launching the business.
Up until 2014, Limelight served as the mechanical song licensing partner of the online store, label and aggregator, CD Baby; the original online music store specializing in the sale of CDs and digital distribution from independent musicians to consumers without any major record label representation.
Since 1998, CD Baby has cemented itself as the largest distributor for indie artists where they have partnered with some of the largest digital download and streaming platforms such as iTunes, Spotify, Amazon and Google Play, just to name a few (they boast almost 1 million indie artists/bands under their umbrella).
In December of 2014 when Limelight made this sunsetting announcement, CD Baby (along with the CD and DVD manufacturers Disc Makers and Oasis) were scrambling to find a new mechanical licensing partner, and by an act of God, our phone rang.
We were thrilled beyond belief (to say the least), and we discovered how friendly this new partner was and how parallel their internal company culture was to ours. There was an instant rapport and both sides quickly saw a mutual goal of helping the same type of clientele and the same belief system and execution regarding our customer service. Shortly thereafter, CD Baby’s management took a chance on a young company and began recommending ESL to their customers in the winter of 2015.
This changed our business instantly, where we experienced a sharp consumer uptick within 3-6 months. In 2014, our user base was hovering around 10,000. By the summer of 2015 this grew close to 40,000. This posed an interesting problem regarding our time spent on our existing Legacy recording service vs. hiring more employees to keep up with this new demand for ESL. For the next year, we had to hire more employees and I spent less and less time filling our floundering pipeline for Legacy. Eventually, by mid 2016, we officially closed Legacy, which was bittersweet at the time. It was an exciting time in our lives after clawing and scrapping for a decade, in which the stars aligned and we aimed to take full advantage of this new phenomenon.
Since launch, what has worked to attract and retain customers?
By the summer of 2015, things were moving fast and we wanted to capitalize on this new void within the indie mechanical licensing industry, so we made significant investments in our online marketing efforts, such as Google Adwords and strengthening our social media presence.
We focused on strengthening all of our existing publisher relationships, while publicly listing each and every copyright holder on our website to serve as a good net to attract organic searches and find new online window-shoppers (today we have over 6,000 publishers listed).
Having CD Baby in our corner opened many new doors. Prospects built an instant trust with our team, knowing we had a big brand name backing us. Online traffic was skyrocketing, and more and more indie labels, online stores and businesses flowed over to us since we boasted a reputation of having the best customer service in our industry.
We listed a 1-800 phone number at the top of our website, which was unheard of within our industry. We made it a point that ESL would be the new Ellis Island with the fastest customer service and the most efficient licensing system. Still to this date, we promise a 1-2 business day turntime for all standard mechanical song licenses, as well as offering free copyright holder searches (even for users who decide not to officially proceed with a license). This friendly way of servicing artists was refreshing, in which our display of “music business karma” was coming back to us in spades.
We also set up a schedule where our employees would actually phone each individual who had signed up, but did not pay for the license. This scored many lifetime clients and even more new partnerships arose (this was only done once per client, and there are obviously some people who do not like to get cold-called, especially from a website, so we had to be sensitive about this). Our motto quickly became “there is no such thing as a dumb licensing or copyright question”; it is a complex jungle and we strive to be the most accessible tour guides in the industry.
In 2016, we launched our Custom Licensing Service division, specializing in assisting clients who need help with any type license (not just mechanical) where special permission is needed on behalf of the rights holder (such as synchronization, master use, print licensing, theatrical rights and international copyright registration within the US). This brought our company to a whole new level where we grew even closer to each existing publisher, and formed new relationships as well. No type of permission was off-limits to resolve. We could now handle it all, and word was spreading quickly within all pockets of the market.
In the same year, we also launched a new product called the “Seal of Authenticity”. This is an image that is displayed on our customers’ physical album artwork, digital cover or artist website that directly links their proof of licensing document when clicked or scanned with a smartphone (using QR code technology). It indicates that music licensing had been obtained, verified, and can be viewed publicly online at IDBLM.org (“International Database of Licensed Music). At the same time, by purchasing this seal at checkout, this entitles the client to fee-free reorders in the event they need to purchase additional units for an existing project where they exceed the initial quantity (they still need to pay royalties to each copyright holder, but our company does not charge any future administrative fees to do so). We made it very clear since the launch that this is not mandatory by any law, but offers clear transparency to the public, serving as a license plate for their album or single release. Our customers took an instant liking to this new add-on product, and the value we delivered did not go unnoticed.
How are you doing today and what does the future look like?
We have been very pleased with this growth, but are constantly on our heels in a competitive way to try to break new records in all categories on a monthly and yearly basis. We are still exploring new services and investments to tighten our grip in this niche.
In comparison to 2018, this year we have grown our business by close to 30% in which we have had the “good problem” of hiring additional personnel. We have invested in API technology (Application Programming Interface) which enables our company to link with other businesses to handle their customers’ licensing needs automatically. This serves as an attractive tool to present to new partners who focus mainly on music distribution and creation vs. licensing.
By the fall of 2019, our goal is to launch our new original composition service by helping indie artists register their own original songs within the US, as well as linking them to our existing partners for world-wide royalty tracking and international registration (both publishing and master sound recordings).
Through starting the business, have you learned anything particularly helpful or advantageous?
The old entrepreneurial saying comes to mind; “you need to reinvent yourself every 4-5 years to maintain success”, which we can personally attest to.
For future entrepreneurs, you need to be as open-minded as possible. You first need to master the art of the sticky sponge, by finding strong mentors early-on, not being afraid to ask any question and bowing down to others’ expertise and knowledge.
Staying rigid and stubborn regarding your original business plan and execution can only lead to dead-ends if you do not experience any hint of the growth you were anticipating. Just like the most successful artists and bands since the birth of pop music, what the kids were listening to in 2017 is not the same as what’s hot now in 2019.
The same goes for launching your own business and trying to sustain it; we made the same mistake of constantly solving the wrong problem perfectly over and over again for practically 10 years. When we needed to pivot and diversify vs. beating the same drum, it only brought on more headaches and less compensation.
I usually like the old poker adage “if you can’t smell the fish at the poker table, you’re the fish”.
What platform/tools do you use for your business?
Quickbooks.com is a staple here for all our accounting needs. Our merchant partners are PayPal.com and Authorize.net, whom we’ve been happy with. LiquidWeb.com helps us with lots of technical support and website maintenance, giving us great customer service.
What have been the most influential books, podcasts, or other resources?
For the music industry, our first bible was the famous “All You Need To Know About the Music Business” by Donald Passman (there are multiple revised and updated editions).
For any entrepreneur, “Think and Grow Rich” by Napoleon Hill and “The Slight Edge” by Jeff Olson.
The latest podcast I’ve really enjoyed is Barbara Corcoran’s “Business Unusual” (from the hit TV show “Shark Tank”). She is very down to earth, and is a master articulator on any business topic, giving amazing advice for the early start-up, to the high-grossing industry leader.
Advice for other entrepreneurs who want to get started or are just starting out?
For future entrepreneurs, you need to be as open-minded as possible. You first need to master the art of the sticky sponge, by finding strong mentors early-on, not being afraid to ask any question and bowing down to others’ expertise and knowledge.
We were very lucky to have had strong local business owners in our corner giving us advice. When ESL started to grow, we sought out new legal council and picked their brains on a variety of topics. Each new partner served as a new platform of information and knowledge, so we were constantly growing our sponge, and continue to do so until this day.
Having a brilliant business partner also helps of course. Mark excels at so many things I do not. He has the discipline and the natural intelligence to build and maintain websites, tackle accounting/bookkeeping (teaching and delegating our employees to wear these hats as well), evaluating new partner prospects and crunching numbers to deliver pristine statistical forecasts. I, on the other hand, have a passion for the art of the sale and gaining trust/rapport with any new contact.
Since the beginning, I’ve said the same statement, “he’s the brains, and I’m the mouth”. If you are the thunder, you have to find your lightening. Those who posses both traits are a rare commodity, and it takes a team to truly experience the company’s overall potential.
Are you looking to hire for certain positions right now?
We just concluded our latest hiring, which we are very pleased with, however, we may open this up once again in the near future due to the current rate of growth, in which a specialized salesforce will most likely be the ingredients to this new recipe.
Where can we go to learn more?
If you have any questions or comments, drop a comment below!
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