RCRD LBL economics

RCRD LBL is a music blog. Or a label. Or a webcaster. Hard to say exactly, but those are the times we live in.

Here’s how they explain themselves to advertisers:

Launched in November of 2007, RCRD LBL is an online record label releasing exclusive and completely free music from emerging and established artists to an audience of over 125K unique visitors each month. In addition to our in-house label, our network includes a roster of independent record labels such as Warp, Modular, Kompakt, and Dim Mak offering free MP3 downloads and multimedia content. The site is a joint venture between Downtown Records (Gnarls Barkley, Cold War Kids) and online media pioneer Peter Rojas (Engadget, Gizmodo, Weblogs, Inc.), and combines the allure of downloading services with the resources of a great independent record label and the editorial credibility of a trusted music blog.

Lots of interesting stuff there, but the one that strikes me is 125K uniques, which is good but not massive. I imagine that the three biggest MP3 blogs do about 250K apiece. They can’t monetize like RCRD LBL, though — what makes RCRD LBL special to advertisers is that it is impeccably legal.

Now jump over to the ad rates:

Widgets Size (px) Price/month
Streaming Radio Player 234 × 60 $35,000
Photos 234 × 60 $20,000
Most Popular Tracks 125 × 125 $17,500
Fans 125 × 125 $17,500
Tour Dates 125 × 125 $15,000
Sponsorship Price/month
Podcast $10,000
Newsletter TBD

It looks to me like the inventory does move because I usually do see the slots filled.

Add up all the inventory and you get 175K a month gross, or 2.1MM a year. Knock off 50% for sell through; I imagine they beat that number, because otherwise they would lower prices, but we might as well be conservative. That gives about $1MM a year in gross revenues. I’d guess 500K in personnel and 100K in bandwidth, office space, etc. These numbers are wild guesses.

I doubt the difference is profit. Most likely there’s a good chunk going to royalties, but even so it looks to me like this is a viable business built on a pretty radical product.

5 thoughts on “RCRD LBL economics

  1. Maybe the whole thing is a crazy dream. Or more likely my numbers are completely wrong. Anyhow, I’m impressed that the numbers could ever add up.

  2. Yes, I know what you mean. I have to think the numbers will add up for someone, and then we’ll see the musical equivalent of a google arise. It could be much smaller scale and yet have a major cultural impact.

    Oh, by the way, I’m in LA thursday night. Want to try to get together? I have a routine Friday hearing, for which I fly in Thursday afternoon.

  3. I read something the other day about advertising turning into the web 2.0 version of the dot com bust, i.e., now that *everyone* is looking at advertising as the successful model for making money on the web, there’s such a glut of ad markets that there are only a few that will find any profit in it.

    RCRD LBL is, IMHO, trying to establish a premium ad market, e.g., maybe something like Federated Media or the Deck, which both seem to be profitable. So, maybe that will work for RCRD LBL if they can provide a premium experience and build a premium audience for premium ads.

    But, altogether, I don’t know about the mass ad markets. Maybe Google / Firefox could offer ad sponsored soundtracks to web browsing and make it work on a mass scale?

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