The Country Music Association Awards were broadcast live on Tuesday night, but the stars of the country music world weren’t the only things shining during the show.
A small Nashville-based startup, HURDL Enterprises, used the awards to unveil their wearable device that’s hoping to solve a huge problem for the music industry in a time of declining revenues — how to make more money for the folks who actually make music.
A March article in The New York Times shows how dire things have gotten. As Ben Sisario and Karl Russell wrote:
Revenue from music sales in the United States has hovered around $7 billion since 2010, according to the Recording Industry Association of America. For 2015, the number was $7.02 billion, up slightly less than 1 percent from 2014.
Within that steady total, however, have been drastic shifts in listener behavior. CDs and downloads have been gradually abandoned as streaming has become the platform of choice.
The result is that the music industry finds itself fighting over pennies while waving goodbye to dollars. For instance, the growing but still specialized market for vinyl records is generating more revenue than the music on YouTube, one of the biggest destinations on the Internet, but that’s because YouTube pays royalties in the tiniest fractions of cents.
For Betsy McHugh, HURDL’s chief executive and co-founder, the question hit home. As a former agent and manager who worked for the powerhouse talent agency CAA, McHugh worked with artists whose paychecks were being cut as a result of declining sales and pricing of the actual music.
“I saw my artists’ income decline precipitously,” said McHugh in an interview. “Everything became about touring, merch, and brand partnerships.”
What McHugh and her technical co-founder Zach Shunk are aiming for with HURDL’s new wearable is to use the concert experience to extend the relationship between artists and their fans.
HURDL’s wearable, called the “PIXL”, is a LED that’s attached to a wristband and distributed to concertgoers at an event (think of it as a wearable equivalent to the 3-D glasses distributed at movie theaters — or a smart version of glowsticks).
Before the show, concertgoers can activate their device by texting a code to a special number. Once the device is on, concert attendees get special messages including discounts on merchandise from the artist and special prompts from an artist’s lighting director during the show.
“I was always so frustrated that I couldn’t send a message after to the show,” says McHugh. Now, instead of making a concert goer download an app, the artist can capture a user’s cell phone information and keep up a relationship with a fan after the concert.
“We can market to them, pre-, during, and post-event,” McHugh says.
The CMAs may have been the big reveal for the PIXL, but HURDL had been testing the product for a few months at events ranging from live Disney shows to at least one New Kids on the Block reunion show.
“Activation rates, no matter the demographic — whether it’s millennials or New Kids on the Block women — is in the 85% to 90% range,” says McHugh.
Users get perks during the show like free drink offers and the feeling they’re participating more actively in the performance and artists get cell phone data that they can use to start marketing directly to fans.
The hardware is relatively simple, there are two RGB LEDs and a couple of watch batteries in the radio-controlled device. The DMX interface has a 900mhz signal controller and is controlled from the lighting director’s booth. The PIXL attaches to a wrist band and is recycled at venues to keep costs down, McHugh says.
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“We see the future of live events in driving and making the fan part of the experience and then you have this one-to-one communication experience,” says McHugh.
HURDL makes money off the sale of its wearables and takes a percentage of every transaction that happens as a result of its marketing messaging, according to McHugh. It’s a 15% cut of any merchandise sold.
On top of the hardware and transaction fees, HURDL is also aggregating and selling the data it collects about users. Subscriptions for the data range begin at $2500.
So far, HURDL has raised over $1 million in financing from angel investors and is going back out to the market to raise another $750,000 to continue rolling out its product.