A New Tune
If you can't join 'em, promote 'em.
That's the approach Jorge Brea, a former DJ, took after he fell short in his quest for rock 'n' roll stardom but refused to give up his desire to succeed in the music industry.
The company did $5.4 million in revenue in 2016, up 74.1% from $3.1 million in 2015. Brea, who owns and operates the company with assistance from his brother Julio and wife, Janette Berrios, says the company is at $6.4 million in revenue so far for 2017, and he projects it will end the year at $8.2 million. “So it's been pretty solid growth over the past few years,” Brea says.
Brea says Symphonic not only has been insulated from the plummet in sales of CDs and MP3s — but also has benefited from it. Early in its existence, in 2008, the company partnered with Spotify, which at the time was a little-known Swedish startup. Symphonic also works with many artists in the electronic music genre who can record albums using laptops instead of expensive instruments, sound systems and rented studio space.
Those musicians have money to spend on the services of a distributor like Symphonic, which in turn is all too happy to have a growing roster of talent to offer to Spotify and other content-hungry streaming services. “Our core business is distribution,” says Brea. “Once we put the song out there, if it's downloaded or streamed, we retain a percentage [of the royalty]. However, if the artist opts for a 100% royalty, we are paid up front to deliver the song.”
Symphonic also makes money by providing ancillary creative and branding services to independent musicians, including audio mastering and music video design and production. “We are in a competitive industry, so artists need more than distribution,” says Brea, who attributes Symphonic's rapid growth to “how consumption, from a user standpoint, has changed in music. The past two or three years have seen the industry shift from downloads to streaming. Consumers are now using Apple Music, Spotify and Pandora to listen to music, rather than buying CDs and downloads.”
However, Brea worries about the consolidation of the streaming industry as players like Rdio have fallen by the wayside and others struggle to turn a profit, despite boasting massive subscriber bases.
“At what point can these companies become profitable?” he asks. “While they're bringing in great revenue for a company like us, they themselves are not very profitable, or in some cases, like Apple Music, it doesn't matter because they're backed by infinite amounts of cash. That's a concern. I believe we're going to see more consolidation in the future ... only a few options will be available.
Symphonic, with 23 employees, markets its services to musicians via web ads and blog posts, but also a hefty amount of face-to-face networking. Brea arranges presentations and panel discussions about the music industry at schools and music conferences nationwide and in Europe.
“I believe that educating the next generation of creators is important,” Brea says. “Education enables us to advertise our brand to someone who's pretty much ready to get their music out there.”
The pitch, he adds, is simple: “We want to go ahead and get your message and your art out there in a cost-efficient manner and give you back 100% of royalties for it. So from an artist perspective, you have the ability to pay pretty minimal fees in exchange for control of your own music and your own repertoire, and you also get paid for it.”