Derek Webb may now be the President & Founder of the successful music company NoiseTrade, but what has best prepared him wasn't a business degree or years chipping away at the industry from the inside. It was years in his folk-rock Christian band Caedmon's Call and years following as a solo singer/songwriter.
“Honestly, it’s just the only thing I’ve ever been able to do,” Derek admits.
Entrepreneurship may have never been the goal, but when it came calling, Derek knew what he had to do.
Caedmon’s Call was an indie band from Texas in an era that pre-dated social media, online ticket and merchandise purchases and, quite simply, regular internet usage. “We learned a lot about the importance of tribe building and really investing in every individual fan, especially the ones that would be the last ones hanging out and want to follow you all the way to the IHOP after the show. We learned pretty early on just how important those people were. Most of what I learned that I still depend on in terms of instincts or the grid through which I look at the business, I learned in those early years in that band.”
And although Derek humbly says, “We were so young, we didn’t know what we were doing. It was just the right moment,” it was far more than that. This talented group had cracked a code most independent acts never figure out: the fans are everything to a band's success. They went on to sell over a million cumulative albums, be nominated for ten Dove Awards, winning three, and boast six #1 hits on Christian radio.
Since he left the band in 2003, Derek has released eight solo albums, many of them pushing boundaries both lyrically and musically. It was on his third album, Mockingbird, that he had an epiphany.
“My third solo record is what kind of lit the fuse for starting NoiseTrade. I was three records into my career as a solo artist. I had a small but really robust tribe of fans that followed me out of my old band into my solo career. No matter what kind of marketing money we spent to promote records, whether it was $10 or $100,000, we sold the same 20-30 thousand records. That was my crowd, and we literally never broke the ceiling,” Derek says.
A half year after Mockingbird was released, Derek found that, “My tribe had bought it, so they had it. The sales had kind of stopped after about six months. The marketing money was spent. There was really nothing left to do, but no one was disappointed. That was what we had budgeted for. I don't make music that appeals to everybody. I’ve always been a niche, niche, niche kind of artist in my career, so that was no big deal. On this particular record, though, I think I had a little bit more ambition that there were people that had not heard the record, that our marketing dollars weren’t finding, especially after three cycles with two previous records. I knew that there were more people that would be into it.”
Derek approached the label about it, but they were already looking forward to the next record. Derek remained unconvinced that this record had maximized its reach. He told the label, “I’d love to continue promoting this one if there is a way. And they said to me, I think rhetorically, ‘Unless there’s a way for you to promote the record further that doesn’t cost us any money, we have to move on.’”
Derek took his artist creativity and knowledge gained over the years as an independent artist and decided to do something “crazy": give his record away for free (for emails and zip codes).
His reasoning: “The people who were going to buy it had bought it at this point, so we’re not really poaching any sales. The people who download it for free and hate it— we were never going to get their money, so there’s a zero opportunity cost on those people. And the people who download it and love it and only heard about it and got it because we made it free and took every barrier of entry down- that’s just found opportunity for us. I’ve got two previous records I can now sell them, and I’ve got all the records in the future. I’ve got tours and I’ve got their zip codes, so I can tell where they are in the country or the world, so I can tour smarter and sell more tickets. There’s a million ways to make money with data. I persuaded what was then Sony Columbia, the parent label, to let me do this, and it worked like crazy.”
The secret sauce yielded success beyond anticipation. Derek gave away 85,000 records in a mere three months. And the best part was, he now had data that would further shape his music career.
“When I looked at the data, in the five cities that I had given away the most records, two of them I had never played a show in as a solo artist, not once. And that was New York and L.A., because these are super competitive markets and it’s really hard to make money and build in those markets if you’re a niche folk singer, which I was. But here’s this data saying I have a ton of fans in these cities, and I immediately wanted to take the data for a spin and see if we had figured something out. I called my agent and I said, ‘I want you to get me any show for any pay in any venue in L.A.. I’ll take anything.’ They came back and said, ‘We got you a Wednesday night, which is horrible, at the Knitting Factory on Hollywood Blvd.’ They’ve got their big upstairs room, which is a huge room for really established artists. They’ve got their middle room which is maybe 3, 4, 500 capacity. And then they've got this downstairs bar, which holds maybe 100 people. There’s a bartender down there with a PA. They don’t usually have music down there, I don't think, or they didn't at the time,” Derek says. “And they said, ‘We got you the downstairs bar at the Knitting Factory for zero guarantee but 90 percent of the door. So if you pull people in, you’ll make money. And if you don’t, that’s on you.’ So I said, ‘I’ll take it, that’s fantastic.’”
Derek put his data to use immediately. He emailed the same fans that had downloaded his record within 20 miles of Los Angeles, thanking them for the record and inviting them out to the show. A second email went out two days before the show without any idea if this geo-targeting effort would actually pan out. When Derek arrived back at the venue after soundcheck, a long line snaked around outside. He said to his buddy, "I wonder who’s playing the big room tonight. Maybe after my show, we can sneak in and see that show.”
Turns out, Derek was the big show. That night, he sold out the bar area and turned away 200 people. After finishing his set inside, he headed outside to play for the people who couldn’t get in.
“They booked me that night to come back six months later in the next bigger room for a guarantee, which I did and sold it out. Same exact thing happened in New York City at the Bitter End. We literally turned away the capacity of the room. All of a sudden, I was like, oh, there’s a model here. I’m all of a sudden making money- a lot more money- giving away music for free than I was making selling it the old way. It was a real lightbulb,” Derek says. “It wasn’t a lightning strike. It wasn’t a random fluke. We did this with data, and we can do it again in twenty cities.”
NoiseTrade, a “tribe-building platform for artists and authors,” was born. “We launched with a dozen records on the site. Mine was one, but among those was the Civil Wars’ first Live EP, which was the only thing they had recorded at the time, because Joy Williams has been a friend for almost 15 years. She and JP had just started their thing, were still slowly finding fans, but had a really great little live recording. So, they put that up. We had some cool stuff at the beginning, and now we have around 35,000 artists that give away a quarter million records per month.”
Most recently, NoiseTrade was even acquired by the popular crowdfunding and direct-to-fan platform PledgeMusic. Derek remains the President of NoiseTrade and is also GM of the PledgeMusic office in Nashville.