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Hello Echo Closes Down Leaving Artists In The Lurch

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Thanks to MusicAlly TMV learned yesterday that the Echomusic platform, touted as a dynamic integration of website, email-list, merchandise sales and fan connection tools is being closed down by its parent company Ticketmaster. TMV drills down and analyses the implications of this for artists, labels and other competing platforms.

Hello Echo established in Nashville during 1999 was growing solidly, purchased by Ticketmaster and established as there social an artist network arm in 2007. Interestingly I was interviewed for the job to be Director of Hello Echo Europe in May 2008; eventually the role went to Adrian Coultas-Pitman, formally Managing Director Digital at MAMA Group Plc.

As far as TMV can discern Ticketmaster purchased Hello Echo with the intention of providing an integrated platform where artists would use it to control their total web presence. Some artists had to pay albeit it is rumored that top-level artists like Kayne West and others had the $30K fees waived.

So, what was in it for Ticketmaster in terms of providing such a service for artists? Three areas were key a). All artists using the service had to sell all tickets via Ticketmaster (hello booking fees and venue fees), b). Artists also had to sell all merchandise via the platform, and c). Ticketmaster essentially owned the relationship between artists and fan.

What does Ticketmaster’s decision to close down Hello Echo signify? In TMVs view it could be a number of things separately or together. The first being that it was not delivering results in terms of income as well as acquisition of new clients (i.e. artists) was slow. Secondly it could be that with the ongoing integration associated with the Live Nation and Ticketmaster merger, a platform such as Hello Echo was no longer required. Or it could just be that it was a non-core acquisition that in the end was not a viable proposition. TMV will leave our readers to decide.

We would like to examine the effects this has on firstly, artists directly affected by its closure and secondly the wider industry in terms of similar competing platforms still in the market place. According to reports even though Ticketmaster and Hello Echo knew about the closure months ago artists using the site were not informed until mid-May and told everything would be “turned off” on 15th June 2009.

Interestingly when TMV checked this morning, the www.helloecho.com website was alive and kicking with known front-page announcement that it was closing down its operations. Same goes for the www.helloecho.co.uk site.

Where does this leave artists? Well according to a number of managers whose artist were using the site, website designers and coders require a minimum of 60 – 90 days to code and launch sites. So basically, artists who were previously using Hello Echo have been left out in the cold. It gets worse. Many of Hello Echo’s clients were also informed that as sales tax had not been displayed at the front end and so said artists would have to pay the sales tax before Hello Echo would allow artists to access their digital assets.

“The larger tragedy here is that just as a new generation of artists were challenging the dominion of a calcified record label system and its decades-long chokehold on career development, tour support, radio play and national album distribution, along comes another, unanticipated near-monopoly with vertical control over the most lucrative and influential parts of the music business – touring, ticketing and management.” – What more needs to be said? (http://www.stringtheorymedia.com/2009/06/darknet-echo-artist-clients-face-imminent-web-shutdown.html)

Moving on. What are the implications of this on platforms such as Reverb Nation or Topspin and many others in-between? Firstly, it may mean an upswing in terms of new client acquisition from those leaving Hello Echo and migrating over to the aforementioned businesses. Yet let’s move forward using the analogy; “once stung twice bitten”, would an artist little own there manager or label seriously consider using one of the aforementioned services? Whilst, yes, these services do bring convenience in terms of providing one destination to help the process of managing the artist fan community. Is it worth the risk of being left in the lurch if they go belly up?

Perhaps time to be checking those user terms and conditions more closely to determine what your supplier of these services offers in case of insolvency or voluntary winding up. Brings the Trinity Street collapse earlier this year to mind and the many labels it left in the lurch in terms of their own D2C retail offerings. In TMVs opinion, services such as Reverb Nation and Topspin offer essential propositions. With new social networking services entering an already crowded market. Services that allow the artist and associated labels or managers to manage critical fan relationships via one destination are an important part of the ecosystem and need to be nurtured.

On a final note, will we see the megastar acts like U2, Jay Z and others signed to Live Nation using the Hello Echo proprietary fan community management engine in the newly merged Ticketmaster and Live nation company? Watch this space…

 

 

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