Billboard is the barometer of the music industry – at least at its highest levels. The Billboard Top 100 charts are considered the gold standard for knowing which tracks are selling and which aren’t.
In the late twentieth century, Billboard became the industry standard for ranking record sales by tracking album sales at checkout. It collected reports directly from Nielsen SoundScan scanners rather than from music retailers after the sale. Its focus on collecting real data and not inflated numbers from retailers made it the most reliable source of what was hot and stood the test of time. But today, Billboard’s reign might be coming to an end.
Single Music Founder Tommy Stalknecht realized that in the 21st century, Billboard faced a new challenge in tracking sales: ecommerce platforms like Shopify. After a meteoric six-year rise post-college, from Apple Store employee to Director of Product Development at a major music merchandise company in Nashville, Tommy created Single Music with his college roommate to solve this challenge.
Single Music helps online retailers report accurate numbers to Billboard from Shopify sales and give artists more control over direct-to-consumer sales. However, it has ballooned into much more than Tommy ever imagined, and is even poised to enter the NFT space as a Shopify partner.
Here’s how he created his $1.5 million ARR D2C business.
A Chance Encounter in Music City
After finishing college at Middle Tennessee University in 2010 with a major in Music Business, Tommy moved to Nashville (a.k.a. Music City) to start his career.
“I came down to Nashville because it was cheap and there’s a good underground scene for any genre of music here,” says Tommy. “A lot of people here are oldhead music industry people who didn’t want to live in New York or LA. 2010 was the end of it being cheap to live here. In 2014 and 2015 this place took off.”
Tommy’s entrance into the ranks of the music elite happened through a chance encounter. While he was working as a Specialist at the Apple Store, he convinced a music executive to keep his iPhone. The next thing he knew, he was working on websites for artists like Kenny Rogers.
“This man came in right after the iPhone 4 came out,” says Tommy. “Came into the Genius Bar and said, ‘Siri sucks!’ and I agreed. At that time it did suck. He wanted me to replace his phone but I said, ‘No.’ I explained that it was a software problem and not a hardware problem. If I replaced his phone he’d just hate Apple more when the software updated and he didn’t have the better phone. He liked how I handled that conversation and he gave me his card.”
Not one to pass up a contact, Tommy sent the man an email later asking how his phone was doing. “He told me to come to his office to chat. I went over there and then he started asking me some strange questions about how I’d run a business,” he says. “I was pretty brutally honest with my answers since it was a casual conversation. Suddenly he called this other guy in and then I realized this had turned into a job interview. I now had the CEO, president, and CTO in the room too. I was offered a job on the spot.”
In just one year, Tommy hopped into his dream industry as an account manager at that man’s digital agency called MCN, handling artist merchandise websites. How’s that for a film-worthy start?
Even Today, the Charts Matter
Handling websites for major artists under labels like Live Nation, Tommy became well aware of the music industry’s reliance on Billboard numbers.
“There’s a lot that comes from getting yourself listed on Billboard,” says Tommy. “There’s the trophy side of things and a lot of labels and people within the industry use it as a benchmark for how things in the industry are going.”
Tommy entered the music merchandising industry when everything from the past few decades was getting shaken up. Of course, this was far from the first time it had happened.
“It’s not like the Foo Fighters run their storefront,” says Tommy. “Most merchandise started getting sold by ‘merch’ companies’ – basically, guys in cars selling CDs – back in the ’80s. These guys in their cars later evolved into modern ‘merch’ companies. These are ecommerce guys focused entirely on sourcing and selling merch at scale. Many of them, my company included, went over to Shopify recently for their backend because they don’t like to focus on tech stacks.”
When merch sales began to move over to platforms like Shopify, it suddenly became a lot more difficult to report record sales to Billboard. Tommy noticed the system had become very manual.
“My company moved from a proprietary ecommerce system over to Shopify back in 2015,” he says. “When they did that, they lost a lot of tools they’d made for things like reporting album sales to the Billboard charts. Once a week we would have somebody going through spreadsheets showing album sales from Shopify and then submitting that to Billboard.”
Handling automated reporting for sales on Shopify quickly became the obvious solution Tommy needed to create, planting the seed of Single Music.
Making Single Music
Despite being young, Tommy was ready for running his own startup. He’d already been doing it at his last job.
“When I started at MCN, they’d recently purchased a site called bombplates.com which is basically a Squarespace for musicians. When they purchased it no one was running it. I asked the CEO if I could run everything and he said to go for it. I started GMing a startup at 23 and learned how to work with dev teams. However, I was getting tired of having to wait on engineers for smaller tweaks and stuff like that.”
Feeling he was stagnating, Tommy left MCN in 2018 and created his startup with his college roommate and backend engineer, Taylor O’Connor. Tommy used his graphic design background to teach himself frontend. By 2018, they’d bootstrapped a simple webpage with a simple task: automating Shopify sales reporting to Billboard.
It wasn’t too difficult to find clients. Tommy had been working at one for most of the past decade.
“Once we got the first company, the rest was direct sales,” he says. “I had a little tradition for a while. My wife would watch The Bachelor and I would sit on the couch next to her and look at the source code of every artist’s merch page and see who built it. It turned out there were 15 to 20 merch companies doing everything in the US. After seeing that pattern I realized there were only 20 people I needed to convince and that’s everything.”
Tommy believes he was successful at getting contracts from major labels because he approached the merch companies, not the record labels.
Instead of going through all the red tape at a label that gets pitched every day, I went down a rung, and between the label and sales is all those merch companies. No one ever pitches them.
“Instead of going through all the red tape at a label that gets pitched every day, I went down a rung, and between the label and sales is all those merch companies,” he says. “No one ever pitches them and because I came from their world they were easy to talk to. I’d seen them all at conferences before and now I wasn’t competing with them anymore.”
Tommy’s pitch strategy turned out to be golden. He says today they work with most of the 20 merch companies minus a few holdouts. His old company, MCN, is even a client. Their white-labeled product runs through 3,000 storefronts today.
How Single Music Works
Single Music is a pretty straightforward system. Their API analyzes orders and passes the data through to Billboard. This ability to track orders has unlocked a lot of extra value for businesses on Shopify. One of the most revolutionary acts Single Music did was create a way to effectively sell and report single tracks (hence their name).
“There wasn’t a way to sell individual songs efficiently on Shopify,” says Tommy. “Because of us, you could sell singles and we would also report those as record sales to the charts. So that’s really what it started. We created the idea of bringing music onto Shopify, which I guess seems odd to talk about in an age of streaming, but it’s just another income stream for artists.”
Single Music also helped companies expand what counted as a sale to Billboard through sales on Shopify, “What we added to the music space was letting live-stream tickets count as sales,” says Tommy. “Companies could run promos like, ‘Buy a t-shirt and get access to a live stream of this artist.’ This helped artists make $23 million on live streams during COVID. I’m very happy and proud of that.”
Since reporting to Billboard becomes increasingly important at the top of the industry, Single Music focuses mostly on bagging big label names for most of their customers.
“If we can get the Foo Fighters’ label and sell a thousand records, we just need ten of those versus a thousand indie labels,” Tommy says. “About 70 percent of our clients are major labels working with artists like Adele, Foo Fighters, Travis Scott, Juice WRLD, all that kind of stuff. We’re running the gamut, but the vast majority is on the major label side.”
Working with some of the biggest names in music has generated some impressive numbers in just four short years, “We’ve done 70 number one records, delivered over four million albums, reported five million albums to the charts, and sold over a million live stream tickets,” says Tommy. “We just don’t publicize all that much. It all exists in a white label behind the scenes.”
Almost as impressive has been how small he’s managed to keep the team while running a $1.5 million ARR business.
“We have 14 people on staff, more heavily weighted towards client and artist services,” Tommy says. “The team has grown fairly steadily. We launched in 2018 but 2019 was our first big year due to album bundling (that’s selling albums along with t-shirts). However, now that doesn’t get counted as record sales to the Billboard charts.”
Shopify NFTs and More
Tommy hopes to keep his business active by keeping it focused on solving problems for artists, “Our main goal as a company is to always look for the things artists and their teams choose to use third-party marketplaces for,” he says. “How do we put them in control by bringing everything to them?”
Tommy strongly believes one of the next big avenues for his kind of service is NFTs. His business is part of the Shopify NFT beta program launching in January 2022.
The issue with NFTs today is a lot of people are making keys to doors that don’t exist yet. We want to create doors for those keys.
“I think the NFT tech is here to stay,” he says. “The issue with NFTs today is a lot of people are making keys to doors that don’t exist yet. We want to create doors for those keys. The true value of NFTs is using them to unlock discounts and access to special content. For example, you can get the alternate cover as a digital download or whatever if you own a certain NFT. They should be sold right next to the t-shirts.”
As you might expect, Tommy is bullish on the future of crypto, in both music and the economy in general.
“In the next two to three years every single person will have a crypto wallet,” he says. “There’s so much money and investment and inertia. People say it’s a bubble but there was a bubble with the internet and we still got eBay, Amazon, and Google out of it. With web3 and NFTs, a lot of businesses will go out of business but the really good ones will be left.”
For their run of Shopify NFTs, Single Music plans to use the Solana blockchain, “We use Solana because of the speed, energy efficiency, and cost,” Tommy says. “We want people buying stuff for $20 bucks using USD. It can’t be $1,000 per transaction like it is on Ethereum.”
As for his advice to other founders, Tommy advises to take your time and look for better solutions to your problems.
“We’ve been able to operate more quickly by moving slower as a business instead of raising capital and diving specifically into something,” he says. “I don’t think it would have succeeded if we’d dived right in. Taking our time has let us achieve growth and retain growth. The biggest lesson is to know when to hold onto your cash when you can spend it.”
The music industry dominates media today, yet relatively little is known about its inner workings. Situations where only insiders understand an industry are ripe for disruption. Founders like Tommy who can find those insular businesses and figure out what is broken within them are quietly getting rich with little competition.
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