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Ep. 34 - Making the Music Industry & Ecommerce Work Together with Tommy Stalknecht

Tommy Stalknecht, the founder of Single Music, helps musicians distribute their music through Shopify. He went to a recording industry college in Nashville, Tennessee before getting a job working a music agency. One of the divisions for that agency was an ecommerce and fulfillment division. He was surprised that Shopify was so big, and yet there didn’t seem to be a solution to make it compatible with the music industry, so he set out to make it.

In This Conversation We Discuss:

  • [2:36] The music industry’s technology being stuck in the past
  • [3:05] What SoundScan reporting is
  • [6:38] Musicians presenting themselves as a brand
  • [9:13] What artists run through Single Music
  • [11:03] Direct to consumer trends in the music industry
  • [16:16] Translating music trends to direct to consumer ecommerce

Resources:

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Transcript:

 

Tommy Stalknecht

I tell everybody everything that we're working on, not only hold myself accountable when somebody asks whether or not we're still working on it, but it's all about the execution of it is the hardest part.

 

I'll tell you what we're working on. And if you want to try to do it before we do good luck, but that's kind of the part of it.

 

Annette Grant

Welcome to Honest Ecommerce where we are dedicated to cutting through the BS and finding actionable advice for online store owners.

 

Chase Clymer

I'm your host, Chase Clymer

 

Annette Grant

And I'm your host, Annette Grant.

 

Chase Clymer

And we believe running an online business does not have to be complicated or a guessing game.

 

Annette Grant

If you're struggling to scale your sales, Electric Eye is here to help. To apply to work with us. visit electriceye.io/connect to learn more.

 

Chase Clymer

And let's get on with the show.

 

On today's episode of Honest Ecommerce, we welcome Tommy Stalknecht. Tommy helps musicians distribute their music through Shopify, solving a very old problem.

 

Hey everybody, welcome to another episode of Honest Ecommerce. This one's going to be super fun because it is blending my previous life and my new life as, I don't know, Ecom expert, I guess.

 

But yeah. Today, we welcome to the show someone I actually met at Shopify Unite and we finally are connecting on the podcast.

 

So today I'm going to introduce the Founder of Single Music, Tommy Stalknecht. But before I get into what Single Music is, Tommy, do you want to give me a bit about your background?

 

Tommy Stalknecht

Yeah, sure. So first off, thanks for having me. Yeah. So, what we do... Well, actually, so my background kind of blends into what we do. So where I came from is... I went to a recording industry college here in Nashville, Tennessee about 10 years ago.

And then when I left, I started working for an agency overseeing the... Well, it's the account manager at the beginning working with Charlie Daniels, and Kenny Rogers, and a lot of those people. A lot of like high-level country artists.

 

And then I moved over to overseeing how to music for the entire company. And one of the divisions for that agency was an Ecom and fulfillment division.

 

So anytime that the guys would have issues with Ecom, they would be coming to me to try to find those solutions for that. So we had about 60 Shopify stores that were running on...

 

That we’re going through that division of the company and anytime they had issues, I just said, "This is ridiculous that this company can... Well, Shopify can be so big, and there's not a solution for this already. So we can't be the only ones having this."

 

So I set out to basically make Shopify be compatible with the industry.

 

Chase Clymer

And for anyone that isn't in the music industry. Let me just tell you right now that it's in the fucking past. There are so many weird things that are still handled by spreadsheets.

 

I can remember on Thursdays, we would have to go and find a fax machine at whatever terrible hotel we are staying at you know, --Holiday Inn or something-- we had to find a fax machine and fax in our Soundscans every week.

 

So this plays into what Tommy's doing over there at Single Music. So I guess first we should explain what Soundscan is.

 

Tommy Stalknecht

Yeah. So, like you, said a lot of the stuff that... So, Shopify, being a powerful platform as it is, the music industry is, as you know, super convoluted when it comes to certain things.

 

And what Soundscan reporting is, that's the data provider for the Billboard charts. So they have scheduled times. It's basically every... Well, it's a little bit different for digital and physical albums.

 

But basically, you have to submit your sales through Soundscan in order for those sales to count on Billboard.

 

And prior to Single, that was a manual process just like you had described.

 

So every week, artists would either have to manually put that stuff in or merchandisers would have to do it for their entire roster or labels.

 

And so what we did, --and one of the main things that Single does is support all of your sales automatically-- so you can just start selling records, things like vinyl, --whatever-- digital, and we will make sure that they are counting out of the Billboard charts.

 

Chase Clymer

Yeah, this is insane, next-level compared to what I remember doing back when we were touring.

 

But back, I guess when I was doing it, it was right before streaming came into the mix. It was right as iTunes was kind of in its heyday. But at, I guess...

 

When you're selling merch back then, it was definitely more a cash-based thing. And now, with technology, people are doing this. It's probably more credit cards at the merch table.

 

And tracking all that automatically is so much further ahead than we had like an Excel spreadsheet and it was just super annoying.

 

Tommy Stalknecht

Yeah, absolutely. Look, music is just like most other industries where they're moving towards direct-to-consumer.

 

And I think that's where Shopify has been able to champion and had their much growth is that most industries are realizing that, "Hey, I don't need to go through an Amazon or somebody much larger who doesn't share the data, and take the portion of their sales."

 

They can just create their own storefronts and own all they own the information. They own the data, they have the most revenue from that, they're not sharing any of that revenue.

 

So it ends up being way more lucrative for them. And so you're seeing a ton of major artists and even independent artists starting to create their own home on the web, getting back to how it used to be prior to even social networks, where you would direct-drive traffic to your own website. But now you can drive traffic to your own store.

 

Pretty much, it's the same but like you said before, music tends to be like 5 to 10 years behind the curve on most things and they're, just now, catching up on the server-side.

 

Chase Clymer

Absolutely. So the cool thing to think about with music, modern music, modern bands is they are legitimately brands, more than they are bands or musicians. They are building a brand.

 

When it clicks on in their head that they have this established community behind them as a musician or as an artist and they can tap into that with a direct-to consumer-retail site, they’ll (be) making so much more money.

 

Nowadays, record labels even see that. So, the day of age now, you make your money from merchandise and from touring. You don't really make it from CD sales anymore. Especially now with streaming.

 

Tommy Stalknecht

Yeah. you don't make as much money from recorded music in general. And you're completely right. When I was working for that old company, I wasn't necessarily so much on the merchandising side, but I have enough experience in it.

 

But the merchandising is like, you go to the Foo Fighters website, obviously, they're not coming up with the designs and stuff. They traditionally work with a merchandiser to find the designs and all that kind of stuff. So that was part of what my company did or that old company.

 

And when I would sit there with them, I would say look, the main thing that you want to do is present yourself as a brand.

 

So, somebody would want to purchase the t-shirt or purchase whatever items from you as if they were standalone items if they weren't a fan of yours. So you could have rather than just having your name emblazoned on a t-shirt, you have a very cool design.

 

That even if I don't necessarily like the band or I never even heard of them, I would still want to purchase that.

 

When you see even more and more different major artists --good examples being like Drake-- Drake doesn't really even sell much of merch branded as Drake, he sells everything as OVO, which is his clothing line.

 

So he has to kind of separate businesses but they're obviously commingled in the sense that he's making money off merchandise as OVO.

 

But OVO can sell merchandise without having his name on it. So somebody can just go buy the Little Owl and all that kind of stuff and see enormous gains that way.

 

Chase Clymer

Yeah, I just think that musicians in general just have such the upper hand when it comes to content marketing because what they're producing is the top-tier of content you could ever think of.

 

Tommy Stalknecht

Yeah, I mean, the other part too is most brands have the disadvantage that they have to create a relationship with the consumer. And so you want to sound hip and you want people to want to hear what you're saying.

 

When it comes to entertainment and music, when you already have fans, they want to get your newsletter. They want to hear from you. They want to know and they're way more open to hearing from the people that they already have a relationship with and the music is the marketing piece for the rest of their stuff.

 

I say that (but) I don't want to sound like I don't have any like a value for the music. I'm a massive music fan obviously.

 

But just like you said, merchandising and touring being where they're making their actual money from, it's the music that got them the fans so they could tour or they can sell merch.

 

Chase Clymer

Yeah. I don't want to play down the value of music. And this is definitely just coming from a business perspective. And this is how it is in the modern-day with just how the music industry works.

 

But it's just so cool to see how things are starting to take into that modern direction. So let's talk a bit about the app again. Who's using the app? Is it just random people off the street? Can you say any artists that are using it?

 

Tommy Stalknecht

No yeah. Of course. We work with, T-Pain, Foo Fighters, 30 Seconds to Mars, 5 Seconds of Summer. Independent labels like Smartpunk and Dine Alone Records. We have about 1000 artists that run through the platform now.

 

And I would say, predominantly, it's the highest tier artists and then it's probably about 60% - 40%. And then 40% of it being just independents that find us or don't have a solution for reporting their own sales.

 

So when I was starting the company, my path to market was to approach other merchandisers --like the one I was working for-- to say, "Hey, I know you guys are having these problems because we had those problems."

 

And so creating solutions to problems that we knew already existed, makes it a lot easier when you're going to somebody to say, "Look, we're solving a problem. We're not trying to just like sell you on just these newfangled ideas that sometimes you see in the music space."

 

So we're a problem-solving company for sure.

 

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Chase Clymer

So, now that you've been doing this for the last couple of years, what kind of trends are you seeing with some of these bands and how they're capitalizing on owning that direct-to-consumer relationship?

 

Are there any trends that you see or just like things that stand out?

 

Tommy Stalknecht

Yeah. With the resurgence in vinyl... Most people --if you're not in the industry-- don't realize how much of a comeback vinyl is actually having. I think it's a reaction to streaming.

 

So, people want to feel like they're supporting the artists directly. I think most people have just seen through general news reports, the payments... How streaming doesn't necessarily pay as well and how independent artists can be struggling on that.

 

But we see a ton of sales still existing for CDs even. I don't even have a CD player in my car, but people still buy it because they understand that that's directly supporting the artist. So we see a lot of bundling of digital and physical together.

 

Bringing the concept of buying a t-shirt and here's the CD into the digital age. So buying a t-shirt, it's like getting a digital copy of the record. Ton of that.

 

And obviously, those count on Soundscan as well, too. And then you can do... Vinyl sales are still doing very well. CD sales... Even cassette tapes are doing very well.

 

But I think the biggest overall trend goes back to what you're saying about the brand side of things.

 

As long as you have good design --and there are so many fantastic visual artists. And a lot of musicians are either visual artists themselves or have friends that are-- and as long as they're creating good packaging, and they're actually branding themselves very well, they tend to sell a lot better.

 

I'm not going to name any names or anything like that, but we've worked with independent artists that have sold tons and tons of records. Like 5000 - 7000 units and hit #1 on genre-specific charts.

 

And I've seen very, very large names --that anybody on this podcast would recognize-- sell effectively nothing because the merchandise that they had just wasn't good.

 

So they would end up just putting something out there and expecting that they're going to sell because they have their name. And people just don't buy it because it just looks like crap.

 

Chase Clymer

That's a fantastic point. Actually, I think that some businesses -- not even like musicians or bands or anything like that-- some businesses, in general, think once they get over that first hump, and they start to see those sales or they start to see that traction, that they can just slap their name on any old thing and it's going to sell.

 

And that is so wrong. It's got to be curated. It's got to be what your audience wants. It's got to be cool. It's got to be hip. It's got to be sexy. It can't just, it can't just be "Oh well, here's 10 things in our catalog we can throw our logo on. Let's do those." That's a pathway for ruin.

 

Tommy Stalknecht

Yeah, definitely. The other cool thing too, is you're seeing a lot more creativity in what people are offering. We had Lil Pump. Lil Pump is a rapper and he put out chains on his website and those chains sold a ton.

 

So he had these custom made chains that were silver. And when we put them up there, (we) weren't necessarily expecting them to sell as well as the rest of the merch. And I think he sold about 7000 just individual chains.

 

Chase Clymer

That's wild, especially because the price point on that was probably more than a t-shirt which is probably what most people think about when they think about bands and musicians. It's like, "Oh, they're just selling t-shirts. Right?"

 

Tommy Stalknecht

Yeah. That's the easiest path for anybody that doesn't think about it creatively. I've seen people do... Even that old company that I was working with, they would do things like making tea bags for a tour. The artists would sell tea on tour.

 

And I've seen other ones where they come up with some of just the craziest stuff and that sells well because they know who their audience is. And that was an independent band that was more in the sense of, they would assume that their fans were tea drinkers.

 

And that was when they brought them out on tour. They sold them online and sold them. And it's just being creative and understanding who your audience is outside of just selling them a t-shirt.

 

Chase Clymer

Absolutely. I actually... Notably... Recently, I know of a band. They're in the metal scene and they sold hand-axes with the release of their album. (laughs)

 

Tommy Stalknecht

Exactly. That kind of thing. And it does really well. So, I think that that's part of the biggest thing. Set yourself up outside. It's differentiating yourself.

 

There's just so much content and there's so much stuff that somebody can buy that showing something that's cool and trinkets and things that are unique are selling a lot better than just the basics that people are used to.

 

I don't necessarily buy band t-shirts anymore, but I'm really big on collecting art prints, either from shows or online.

 

Chase Clymer

Oh yeah.

 

Tommy Stalknecht

(My room is) covered in art prints just because those are what I like to have. And I think it's cool to have visual art and they last longer for me than a t-shirt because I'll just destroy it. Yeah. I mean, there's a ton of cool stuff.

 

Chase Clymer

Absolutely. So let's pivot a little bit here. Because any listener of our podcast is like, "Hey, I've got an online store. I'm not a band. I'm not a musician."

 

So how could we translate some of these efforts that are happening in the music world over to direct-to-consumer Ecommerce? I definitely know there are parallels.

 

Tommy Stalknecht

Yeah, definitely. So we put out something recently that we call BoostLinks. And the idea behind that is the bundling of a digital album with the t-shirts is fairly common practice but there are things like bundling follows to playlist or subscribes on YouTube and that kind of thing.

 

So when somebody purchases an item, the person that purchases immediately gets delivered an email that has a link list of whatever platforms that you want to promote. So that can be... Some brands (are) doing a lot of their culture marketing.

 

Setting up things like a playlist on Spotify. So you could be a makeup company that has a weekly playlist on Spotify that has different music that you feel relates to your brand. And you can funnel fans or your customers to those playlists.

 

And over time, if that playlist becomes big enough and has enough followers, you can monetize placement on that playlist. So not only can you promote yourself through music and marketing, but you can also create new revenue models through marketing that you might not have even thought of before.

 

Other stuff too is... Obviously, since gaming and influencers are massive sellers on Shopify, you can have somebody that... Let's just say that they're a gamer, and they're selling the game jerseys and that kind of stuff.

 

Somebody buys that and you can say look, "This is my Twitch stream and my Discord stream and I'm on TikTok or whatever."

 

And so, (there are) ways to expand your other marketing through the sales that you're already making and saying "Look, you might already be a fan of mine on Twitch but you might not know that I have a Discord channel or you might not know that I (am a) YouTuber or whatever."

 

So you can grow all of your different platforms around the people that are already supporting you most.

 

Chase Clymer

Absolutely. And just going back to the beginning there is something that I feel often overlooked with many brands --like direct-to-consumer brands-- is bundling a physical good with a digital deliverable, that can do wonders for your business.

 

You just got to think about what your target audience is into and give them something cool. I've seen it done with eBooks.

 

I've seen an interior design (company), they cultivated beautiful pieces for your home. And what came with your products was (an) interior design eBook on how to design your home better.

 

Tommy Stalknecht

Yeah, exactly. There are tons of... It's content marketing, as well, too. So a lot of people are saying how just writing blogs and becoming an authority in your space...

 

If you can offer more content around that, then that's just more things that you can offer to differentiate your store and your value versus somebody else's.

 

Chase Clymer

Absolutely. And it's just about thinking creatively going back to those items. It's like, "All right, do you know what your audience wants? How can you creatively serve them?" And the best thing about digital products is it doesn't cost you any more to sell another one or give it away.

 

Tommy Stalknecht

No, not at all. And that's the thing. And when you're talking about sending out an eBook or something like that, yeah, the cost is effectively nothing.

 

There's a little... We monetize on the music side of things because there's more into it to get it to go on to the charts. So we have to...

 

Our software is a little bit more robust on that side of things. But there's tons of stuff that you can use. A good example would be Maya Ives.

 

So she makes beaded jewelry. She makes beaded jewelry but she also sells the templates, how you can do that yourself at home. They sell those as well. She sells them on her website, too. Also on Shopify, I built it for her.

 

But what something that she can do and others can do is, whenever she sells a bracelet, you can also include the "How You Can Make This Exact Bracelet That You Just Purchased From Her (email)." At the same time, this is the plan for making that exact bracelet. So if you want to try to do it yourself... You're just growing the community around what you're selling as an authority.

 

Chase Clymer

I think that's fantastic. I think people are oftentimes scared to give away their secret sauce. And it's like, "Hey, people are lazy. They often just want you to do it for them."

 

Tommy Stalknecht

Oh, yeah. I mean, that's the thing. Whenever somebody has a great idea and they're starting a company, they always try to hold their secrets.

 

I tell everybody everything that we're working on, not only to hold myself accountable when somebody asks whether or not we're still working on it, but it's all about the execution of it is the hardest part.

 

I'll tell you what we're working on and if you want to try to do it before we do, good luck. But that's part of it.

 

Chase Clymer

Yeah, I think that's a calling card for a young entrepreneur, --which I'm not knocking young entrepreneurs by any means-- but often when young brands or young entrepreneurs reach out and say, "Hey, I want to tell you about this idea but you have to sign this NDA."

 

Nobody is going to be as passionate about what you're about to tell me or about what you want to do. Nobody's going to have the idea as fleshed out as you do. It's not worth an NDA.

 

Tommy Stalknecht

Though I did... I used to do that. When I started back in 2015, when I was first coming up with the idea, I was doing exactly that. And now I'm like, "This is everything that we're working on." So you stay interested in what we're doing.

 

Chase Clymer

Absolutely. And especially when you're talking to smart people, they won't sign NDAs because technically, if they're in a similar space, i.e. Ecom, almost nothing's proprietary.

 

Tommy Stalknecht

Yeah. Nothing that we... And that's the thing. We are very honest about what it is that we do here in Single We're not creating something necessarily all that flashy. It's much better of an experience both on the artist and on the fan.

But we are solving problems that have just been around for a long time. We're just creating solutions that make their lives easier. And it's kind of in a non-sexy part of the industry. We don't work on the blockchain, we don't work in streaming, we just solve problems that we know exist.

 

And so the biggest thing for us as an app developer is going to our agency partners and artists and just straight up saying, "What are we missing? What do you want to see? And what would be beneficial to you to help you grow your store?"

 

Because for us, we monetize on music... We don't take any portion of the physical merchandise, Shopify handles all of that.

 

But when you're running a digital album, it behooves us to support you to get more sales because it benefits us as well.

 

So we have a vested interest in the success of our artists to make sure that when they sell so we in turn also make money ourselves.

 

Chase Clymer

Absolutely. Well, with that being said, I think we've reached the end here. Is there anything else that you feel would be valuable to share with our audience here?

 

Tommy Stalknecht

No. I think the biggest thing is if you start... I have plenty of experience in Ecommerce outside of just music alone. And I think the biggest thing is understanding that it is a business.

 

And I think a lot of people try to get into Ecommerce at the beginning thinking that it's just this quick solution to start making a ton of money, not realizing that it is a full-time job. You're creating a business.

 

So there's going to be tough times where it's not going to go as well or your sales won't be that great.

 

It happens to every business but it's how you work through those and then find the issues and then find the solutions to those problems so you can get to the next quarter. And then you'll have a better quarter.

 

And then it picks up some snowballs and ups and downs but just to not burnt out on it and understand that it's going to be a grind.

 

Chase Clymer

Hey Tommy, that's pretty much what Honest Ecommerce is about right there. It's telling the truth and you hit the nail on the head.

 

Tommy Stalknecht

Cool, man. Well, thank you for having me.

 

Chase Clymer

Thank you.

 

We can't thank our guests enough for coming on the show and sharing the truth. links and more will be available in the show notes. If you found any actionable advice in this podcast that you'd like to apply to your business, please reach out at electriceye.io/connect.

 

Annette Grant

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