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As the record industry undergoes radical change, Jamie Estrin has placed himself at the forefront of the revolution. Neena Dhillon meets the self-styled champion of independent music.
In just over a year, one website has revolutionised the whole of the digital music business, evolving into the largest independent download site in Europe and, more importantly, convincing fans and the industry alike that there is a credible and commercial future for independent music online. Behind this success story is a tight-knit group of dedicated individuals who have worked tirelessly to provide the high-quality digital music service that promotes over 3,500 labels from around the world. Behind the tight-knit team are two brothers, Jamie and Daniel Estrin, who poured the capital they’d gained from a management buyout of their last successful enterprise into co-founding their innovative online vision—KarmaDownload.com
“During our latter days at Profe
ro (the UK’s first interactive advertising agency established by the brothers in 1997), we became fascinated by how the music industry would collide with digital space, especially with the onset of broadband,” says Jamie Estrin. “Our vision revolved around the firm belief that fans would make the transition of discovering, sampling and buying music online, provided they were given a high-quality service.” But while there was no shortage of people willing to come onboard as part of the team that would establish the service in one year, it proved tougher to get the money-men signed up.
“In early 2004, when we were preparing the groundwork, the biggest question was whether music fans would pay for digital music,” Estrin continues. “It proved a real barrier and we had to work hard to convince the corporate world that digital music could be a commercially viable concept.”
Having secured the capital, the team then faced the challenge of persuading independent labels that KarmaDownload could become their champion in the marketplace, not only in providing them with a new revenue stream but also promoting their catalogues on an online global distribution platform. “It was absolutely pivotal to the music industry that there were legal digital services involving fans paying and labels receiving revenues,” Estrin comments.
Just as important has been the response from music enthusiasts, who have latched onto the benefits of being able to discover and sample music 24-hours-a-day, seven-days-a-week. In just two to three clicks, music can be downloaded for 89p (around €1.30) per track or £7.99 (around €11.70) for an album. The website has already attracted two million visitors from 200 countries and in November will begin pricing in euros and other currencies.
As the link between independent labels and the music fan, KarmaDownload has also developed into a credible guide to new and emerging music. But Estrin is quick to give credit to the fans: “They are the people who decide what music should break out—we just make it available to them.”
A huge music enthusiast himself, Estrin’s career is reminiscent of the country’s most noteworthy entrepreneurs. Leaving school at 16, he flung himself into work, joining Sky Television at the tender age of 17. During his five-and-a-half years at the company he became fascinated by changing attitudes to the way television was watched and consumed. This interest in new markets flourished at Profero with its focus on the emerging internet, and continues today with the relatively young digital marketplace.
Perhaps it is the experiences of Sky and Profero that have allowed Estrin to deal effectively with the pressures of another new business, but this doesn’t mean that there aren’t concerns and worries. “The responsibility for the great bunch of people who work here, and deserve every credit for the product we have today, keeps me awake at night,” he acknowledges. “Without a great team, we couldn’t offer the service we do; but it is challenging to keep everyone together. The nature of this business means we have different people working together, from IT and design experts through to customer service and admin staff through to marketing specialists.”
Adding to this concern is the pressure of writing new rules every day for a business in its infancy. “The music industry is still trying to get its head around the digital marketplace so we have to write new rules as we develop this market,” says Estrin. “Crossing these barriers every day can result in some very dark days—it’s not like running a restaurant or a shop.”
Having just returned from a week’s holiday—the first in a year—Estrin seems to relish the prospect of returning to work. He admits he could quite easily be consumed by the business every waking hour, but the overriding factor that keeps him going—even through the tough days—is his belief in the viability of digital music. He explains: “The greatest motivator is that I know our service is going to be 10 times better in another year’s time.”
MY FIRST JOB
I left school and joined a football collector card company, where I learnt how important a strong team is to the success of any business.
BEST PIECE OF ADVICE I’VE EVER BEEN GIVEN
During my early days at Sky, one of my first bosses taught me to approach everything with a “can-do” attitude. In five years, I’d moved from Promotions Assistant to Brand Manager across all channels during a time that saw the Sky subscriber base grow from 600,000 to 6.5 million.
BACK ROW: MICKEY DAVIS, NATHAN LEWIS, STEVEN SIMS THIRD ROW: JOHN-PAUL HAROLD, REBECCA OSBORNE, JOEL DELANE SECOND ROW: SAM HAMILTON, MOLLY FLOWERS FIRST ROW: JAMIE ESTRIN, JAMES LANGLEY, AND DANIEL ESTRIN
KarmaDownload has already launched in North America to great acclaim. Next year’s key markets in Europe will be developed by the brand, while test markets in the Far East and Australia will be identified. While the company is hesitant about releasing a turnover figure for its first year, the site has achieved 20% growth in revenues month-on-month, while payments to labels increased by 40% in the last quarter.
Of course Estrin is proud of these achievements to date, but he remains vigilant about the challenges ahead. “Our biggest job is to continue educating music fans and labels about the benefits of an online service.” This is why Estrin seems unfazed by the prospect of growing competition. “The more the merrier,” he says with a shrug.
And just before he returns to overseeing one of Europe’s most popular online music services, Estrin pauses to reflect on his hope for KarmaDownload in five years’ time. “I’d like the service to be used by music lovers in every corner of the globe and become the most credible, independent digital music brand in the world.”
FIVE THINGS I WISH I’D KNOWN BEFORE I STARTED
1. The number of sleepless nights I would be having and how much this business would take out of me.
2. How little the music industry knew and understood about the digital world.
3. The sheer complexity of the digital business and digitising content itself.
4. The forthcoming plans of electronic companies for the device market.
5. The role that mobile phones are going to play in this market—a question we’re still asking today.
UNFULFILLED AMBITION
I shouldn’t really say too much about this but I’d like to take the Karma brand into new industry sectors. I love the music space but I’ve always been interested by all business so I guess one of my biggest ambitions is to see the brand taking on new markets.
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