All right I’ll admit it. I’m old enough to remember dropping dimes into jukeboxes. The mixtape culture of the 80s burning C.D.s in the 1990s and the arrival of peer to peer music sharing platforms like Napster at the turn of the 21st century. Call it tribal. Call it communal. There’s always been something collective about music. We make it together and share it with one another. And while the method and the mode may have changed over the years the bottom line is still the same thing. There’s a magical feeling to sharing a new song or an old one with a friend for the first time or sitting around and listening to that album with your friends in the basement doing God knows what and nobody understands that better than the fellow joining me in the Corner Booth today Mr. Alex Oberman the mastermind behind the Flo Music app.
Flo is the jukebox of the 21st century. The next evolution in the ongoing streaming music revolution and Alex Oberman is the man who’s poured his brains blood sweat and tears into making it a reality. Changing the world ain’t easy. And as Alex is sure to share you’re gonna struggle along the way. But because Alex chose to never give up. We all have the Flo Music app today and it’s a tool that’s going to make sharing music with the people around us more meaningful than ever.
It adds new layers to the shared experience and is as much a game changer to the music consumer as it is to the artists themselves. So go on. Grab a seat in the Corner Booth and listen in while Alex and I discuss the future of music and how to turn a simple idea into a groundbreaking application.
“I hope you don’t ask me the last concert I went to I was sitting here. Was that any of the things I dealt. I can’t remember. That would sound so terrible a guy making music app doesn’t remember his last concert.”
I was not going to ask that but what I did want to lead off with was what was the first concert?
“My first concert was Dave Matthews Band.”
What now, what year would that have been?
“That would have been ‘95-’96.”
Is that where this whole thing with music started?
“I’ve always loved music is next as much as the next person not less not more but I would always consider myself a pretty average music consumer until 2012.”
“One of my friends wanted to make an app. We had an idea to make a Bluetooth app that hooked up to the Sony PlayStation so that you didn’t have to buy a $40 headset to be able to game and talk to people. Sony wouldn’t let us into their Bluetooth stack and two years later we tried again hoping things would change. They didn’t. And then this idea of Flo came about, the ideas about five years old and then it took us about six months to really start a company and developing the app.”
Tell us what it is.
“Elevator Pitch. Flo Music app is available on the IOS App Store and it combines Spotify, Apple, iTunes and SoundCloud into one music ecosystem to serve a few distinct features. Essentially it’s a jukebox. Everybody’s got music on their phone today, but today when we’re listening to music we’re relegated to switching an aux cord or at worst a Bluetooth connection, asking a friend to see their phone to put on a phone saying, hey we’ve been listening to your music all night.”
“So, Flo is the jukebox for the streaming age we all know the jukebox has been popular for decades and Flo is powered by today’s leading streaming streaming service providers and we’ve also found that one in three users that have either Apple or Spotify, also use SoundCloud. Which is really kind of the the non mainstream the upstart for a lot of artists and a lot of mashups and mixes can be found there that become really popular.”
“Flo is a way to put the non mainstream SoundCloud into the same playlist as your majors Apple and Spotify. Now you’ve got a seamless playlist instead of using two different apps and really the cool thing about building a jukebox for the 21st century is, I’m a big basketball guy and I’ve always wondered what the players are listening to pregame warm up. Well anybody who runs their Apple or Spotify through the Flo music app. Anyone in the world that has either a Spotify or Apple would be able to tune in and listen and live with people. So that’s pretty exciting.”
I could search for your Flo playlist or your Flo Music catalog and I could listen to anything that you have that you’ve downloaded from iTunes or Spotify or anything like that?
“So the Flo is is really a emphasizes real time live. So you download the app you’ll see everybody who’s on the app whether they’re close to you or verified or their Flo is trending. However, you can still go to a user that are already has created an account and see some of their playlists so that you can listen to it when they’re not live.”
“So they don’t even have to be actively using Flo for you to get into their music.
True. That’s right. However the you know there’s a value to real time experiences. Instagram Live, Periscope, Facebook Live. You know when you watch things on television live like an NBA Finals game and then there’s you know, the cached going back to finding something and re-listening to it. The best of both worlds.”
And that’s one of the things with Flo as well. It’s not just you’re able to listen to somebody’s music you can literally communicate with them through the app too right?
“Yes and no. The host has the ability to speak over the music to all of the people listening. However if you can imagine someone who even has a modest 20 thousand followers and let’s say they have a couple hundred people listening to them live on a Saturday barbeque that they’re having, they can speak to all their listeners but we couldn’t give all the listeners the ability to speak because then it would just be, you know, kind of a messy right chaos.”
“However there are three different roles and Flo. There’s a host who runs the show. Collaborators who get to add music to the Flo and then their listeners. So collaborators actually can also speak over all the speakers but only when the host is. So, it’s kind of a walkie talkie of sorts. You know you could pre game with either of your friends or you could be three hip hop artists in different cities and all the the audience, the listeners would be able to listen to several artists communicate and then when the host said it’s time for us to stop talking, let’s continue and go back to listening to music they would have better discretion to end the shout out if you will.”
So in addition to being the Global Jukebox it’s also I guess a means to sort of be an instant disc jockey or you could do your own theoretically a show you know your own broadcast through the app.
“Absolutely. There’s been a person, I guess the, coined term like it’s a radio station for everybody. It is exactly that anybody could get on there whether you have a following or not. And occasionally when I listen to music by myself, I’ll just, on a normal like this morning there will be a stranger that joins my Flo and listens for a song or two before they pop out.”
“The nice thing about jumping in and out of people’s Flo is you never know what you’re going to discover and if you tap the song you will have the option to add it to your Flo playlists or favorite the song. So you know there are a lot of times that even when we’re with friends we know what the song is but we just don’t have it added to a playlist. We make it really easy to grab the music whatever Flo playlist you’re in and catalog it to a favorite or put it on a playlist.”
“I think I speak for a lot of people curating playlist is it’s very difficult. Not everybody has the talent or the patience to do it. And I think it’s one of the reasons some of the leading streaming service providers have had such success with building a playlist ecosystem where people could go in and listen to rap caviar and it’s all set out for them. Kind of taking the onus off of each one of us to build our own playlist and really just find a playlist that we like. So if you use our app with your friends once or twice a month for a year before you know it you’ll have these playlists built just by kind of picking and choosing songs when you run across them and you like them so you don’t need to sit down for two hours and wrack your brain to build a playlist, you just chip away at it. Over time before you know it, maybe you’ll have the next big hit Spotify playlist or Apple Music.”
It’s almost like the early days of Napster in the sense in only in the sense that what an amazing way to really discover new music.
“I grew up in the age of Limeware, after the fat Jewish had a funny meme that said kids today will never remember giving your computer aids just for free music. And I remember coming home from class walking home and telling myself I’m going to make the most fire playlist when I get home and I’d go up to my dorm and sit down with the world of music at my fingertips and I would go blank. When you crowdsource that into a collaborative curation, everybody’s gotta bring.”
“We had a party on Saturday night and I had about six people on the Flo. There was about 15-20 people at the house and everybody who’s one of the collaborators, who has the song add permission, they know they’ve got to bring a good song. Bring their A game.”
It’s almost like anything now when you sit down in front of your television and you’ve got Netflix, Hulu, Amazon, Prime. It still takes you two hours to actually land on something to watch. No different than when you used to sit there and try to put that playlist together. This does some of that heavy lifting or at least points you in the right direction.
“That’s right. You know you can still access your playlists that you follow on Apple or Spotify. So if you’re a Spotify user and you download Flo Music you’ll see your playlists there that you already follow. So you can ramp those up real easy start a Flo with one of your existing playlists or you can jump in and find a bunch of either your friends using Flo people that are close people who are verified or popular trending Flo’s and to your point I think one of the the niches that Flo serves is about connecting with people through music. You sit down and you say what do I want to listen to maybe you have a mood or something you kind of have an idea of what to listen to. Flo kind of helps funnel you to do that but connected through people.”
“When you close your eyes and think about the last 5,10, 20 years of music the people that you were with when you experienced music throughout your life are just as important as the music. So to be able to connect to even if it’s a synchronicity to someone who’s famous to be able to listen to them that adds a little something special and unique and it’s engaging. Not only do you follow somebody but you can also listen to music with her. Same goes with your friends you can connect with your friends even if they’re in a different city around music and play the playlist that you listened to in high school. And it’s special. There are a lot of people who kind of like the idea of Flo and then they’ll use it and once they connect with people and they build a playlist with their friends it all just dawns on them like this is what this is. Why has no one built this before.”
With everything available at our fingertips these days, we’ve almost plateaued when it comes to making music special again. I remember literally recording songs off of the radio with a cassette. I don’t know it’s weird but it added something to it and it just feels like when you can have any song instantly. Sometimes it takes something away. This seems to add another layer to enjoying music again.
“I would agree and I’ve done that.”
“You have the radio on and you’re waiting for that song to be played again after two hours it comes on and when you have that tape it’s like already six seconds into the song.”
You’re just yelling at the DJ to shut up.
“Yeah same with CDs There is always a friend or two that had just real fire CD and everybody would ask “Hey can I burn that CD?” and they’d say yes. Some of them would just be honest and say no. But it was always really difficult to get a your friend to give you that CD to burn it because again it you know it took time.”
“I had an older man tell me when he grew up they would buy an album of vinyl and they’d put it on and I’ll just sit around in the den or the living room and listen to the whole album and you know to your point I’m really not here to judge what’s right or wrong I’m just an observer of the changing and evolution, evolving music marketplace. And to me there was a value in that.
“But today we have engagement it is at all time highs the affordability and accessibility to music is higher than ever. There’s a lot of people who couldn’t afford a lot of albums back in the day that now they can enjoy music. So, thanks to Spotify and Apple and iTunes and SoundCloud for allowing us third party develop. To be able to innovate and create a cool experience that I, I would agree with you. It adds something a little special into music that at least doesn’t exist right now in this marketplace where you can you know listen to some oldies on Sunday with your mom and you live in a different city than her. Or we like to joke that long distance relationships have a 75% higher success rate with couples that useful or music. So you know there’s something about it. It’s not talking and looking at video music has been an audio sensory experience. You know we’re dancing, we’re looking at our friend, we’re laughing, so Flo is still about very much about the music as we hear it. We’re connected either at the same party collaboratively curating like a jukebox or across space we’re connected through music. And to me that is a deep value of the social good that is music Flo adds to the conversation of music in the 21st century.
Everything we do nowadays is becoming more and more insular. We have our headphones on, we’re looking down at our phone, you know music has become just something we primarily do in private now and it shouldn’t be, it should be the kind of thing that you share with friends, family, the people you love. And I do really like how Flo is kind of giving that aspect of music back to music lovers.
“Thank you I think so too. It’s a noisy world and no one has done this yet. Just like Shazam makes so much sense for not just identifying music. I use Shazam a lot to catalog music. You know what a great product we feel that Flo Music is a product that people use when there’s two or more people who want to contribute to music or there’s two or more people that want to listen to it and it’s really that simple. You know in the age of digital music over 90% of all the music from Amazon, the Spotify, Apple, it’s the same music.”
“You know Drake ‘Nice For What’ isn’t any different on one streaming service than the other, so it’s just a matter of matching the metadata. You know people can swear that Apple is better and that iTunes is better, Spotify is better but in reality when you get together it’s about the music. So if we can facilitate people connecting and around and through music then we’ve accomplished our goal.”
And you’re dropping names like Apple, Spotify, SoundCloud. How do you get in bed with them? I mean how does Flo even initiate conversations with, with names like that.
“Well, that’s a really good question. When you get as big as them it’s not really easy to compete with Spotify or Apple so what they do is there’s a term called an API. It’s called Application Program Interface and because Spotify and Apple and SoundCloud are large enough to where they don’t have to necessarily fear new competition in ways that you would normally think of. They open up their platform provided you have to stay within a Terms of Service of use. By doing so by opening their platform up they actually encourage innovation like a DJ mixing app where you can mix two different songs. An app that will actually sync phones together for volume.”
“So we simply went and created an account a developer account with each one of these companies. They’re aware of us. We didn’t have to ask for permission. We just need to abide by their Terms of Service and we believe that these are partners of ours. Because you have to be a paid user to use Flo Music as well as other apps that use these APIs that we’re actually encouraging people into the paid tier of music in order to have cool experiences like this. There’s something called the value gap in music and there are so many people that get free music and royalties aren’t paid to the publishers the labels and artists that it’s detrimental to the industry.”
“So if we can be part of encouraging people to get into the paid tier where everyone gets paid especially the most important to us is the artist then we’re part of a larger equation to a sustainable music industry. So really these companies encourage innovation. We didn’t have to ask permission we just have to behave and use their their content respectfully and legally.”
How different is the music scene today if 20 years ago artists had gotten in on the Napster thing rather than spending all their resources to fight it? Because it seems like Napster sort of the Godfather or the grandparent to all these different in a way all these different music services was it. Was it a mistake to go against them? Should they have you know what I’m asking.
“That’s a really interesting question I’ve not heard before. How did have gone the other way, maybe the artists collectively could have more control over their fate. I think some of those questions are being asked right now of Spotify is in the news and they’re courting artists to forego the label and the big publisher like Sony, Warner Chappell and Universal and just list their music direct with them. And you know that’s that’s a good a good question. A lot of artists and I think this is one of the reasons SoundCloud has so much really so much respect with the artists community is their platform where an artist can upload their music and people can come and listen to them. So it’s really a champion of the artist.”
“Twenty years ago most of the big name artists already had contracts, so they weren’t collectively making the decision, kind of a workers revolution if you will to support or not support Napster. It was simply a disrupter from, you know, physical albums, cassettes and CDs to digital albums. And how that music could be pirated and how the people who invest in music from artists all the way to the top of the management chain how they’re properly paid for it and everybody likes free stuff at the end of the day I think we’ll all agree that if we all cannibalize and pirate something like music something we love so much to an extent that it hurts the industry everyone really loses.”
“So Napster probably helped kind of light the fire of what digital music was kind of decade of iTunes where you did not to buy a 16 hour album you could just get the hit for 99 cents. It’s been fun to watch and what comes next is the question and we kind of believe we’re one of the curbs after some of these streaming services where friends even if they have a different service provider can still enjoy music together. I mean it just seems to make a lot of sense that someone is gonna go build an ecosystem that it doesn’t matter where you get it because it’s all the same music that people can use and enjoy together with their friends, family as well as artists, celebrities, the influencer of the day.”
Music used to be a one way street. You went to a record store and you bought the album of your choice that was available. There was no two ways you couldn’t be the artist and say “hey could you sell my record in your shop?” and that’s what I think Flo does so well is it’s a very artist friendly platform.
“It is. And one of the terms and conditions of the streaming service providers that we work with is that you do not monetize. You do not have a commercial product unless we have their good graces. What we’d like to do is through a subscription model and artist. So let’s say there’s an artist who’s independent. They’ve got 50 to 100,000 social media followers there. They don’t want to sign a contract yet they kind of want to get over the hump. Kind of like. Chance the Rapper did. Flo means that you can engage your following directly maybe those fans even if it’s just 1 percent are willing to pay a monthly subscription.”
“We believe that, that Flo could be a tool for another revenue stream for artists something all the artists today as an entrepreneur or artists are entrepreneurs in the music space. It’s very difficult. It doesn’t matter who you are to start a business or to become a successful artist. And at the royalty rates that these artists are getting paid now they really rely on merch sales and touring to make the lion’s share of their annual income. And if you had access to when an artist was listening to music and that let’s say that artist was, you know, every couple songs would jump in with the shout outs feature I spoke of earlier and said something maybe they spoke for five minutes just like a radio DJ like Kid Kraddick that we all loved to listen to.”
“Sometimes that personality kind of helps to put the experience of listening into music you know good a nice kind of commercial or just a nice experience. We believe that there’s a way to monetize access to people’s live music listening. And so it’s about, it really is about the artist. And while there there could be some just social media stars who are famous for social media, you could also make money off that or our goal and our focus is to not just connect people through music but to build a product that helps artists get paid.”
“There’s a interview with Daniel. For those of you don’t know, he’s the CEO of Spotify and is a genius. He was at, an interview and they took questions from the audience and Jimmy Buffett, he asks Daniel. “I know that you pay the publishers who end up paying the labels and then the labels end up paying our manager in US but is there any way that you could pay us directly?” and Daniel was just like “ugh, God”. You know it’s it’s hard enough for them to have made a successful business out of this. Spotify is really concerned with market share at this point not as much profitability but the margins are really thin, is the point. And for Jimmy Buffett to have asked Daniel this you know it was kind of like a galley is if we’re not doing enough or maybe it’ll be a third party and I’d love to have that conversation with the who’s who at Spotify and Apple and SoundCloud and in the future Amazon and Visa which is a big player in Western Europe that competes with Spotify and have a conversation say let us monetize this to help the artist the content curator earn a more stable income in today’s day things go viral quickly. You have a hit and within 30 days you have 100 million streams. You made $300,000. That is not a lot of money.”
I mean it is for a lot of us but not when you’re paying managers not when you’re managing a tour or not when you have all the added expenses of being a artist at that level.
“That’s right. And so what’s changed in the industry is, I had to buy a $16 CD if I wanted to hear an artist you take that $16 CD, the artist would get you know a buck or two of that.”
“And if they had a successful first album when they signed on with the label their second contract would be more beneficial and they’d make more of those margins will global recorded music industry revenues. So these are recorded music industry revenues for the world in 1995 were 25 billion dollars in 2009, they were 14 billion. So 40% of the global recorded music industry revenues vanished because of streaming and only until I believe 2015 did we see a growth start to continue where streaming was now offsetting the loss, the loss had kind of started to stock with physical album sales. You know it’s it’s a new environment the consumer expects it.”
“And it looks like there’s a long term sustainability to it. We’re all trying to figure it out. Our company is a very small player in this space. But the idea we hope will spark a revolution of helping artists to make you know even if it’s just another couple hundred dollars well now that artist doesn’t have to worry about gas money to get to a venue or buying studio time, production it costs a lot of money to have an album professionally produced.”
“You know that’s our goal is we’re really focused on the consumer and the artist. You know without these artists we wouldn’t have all these great songs we love today.”
Is there any aspect of Flo that’s I’m thinking of almost like a patron on situation where if you’re a follower of an artist are you able to make donations or contribute to them voluntarily in a monetary way.
“I’m not sure if that’s within the terms and conditions but that’s OK. That’s essentially what we want to go forming what you’re talking about here is let’s say $10,000 people are on Russ who’s one of my favorite artists right now. Half of them have Spotify and the other half of Apple their music that Russ is listening to that we’re matching the metadata and queuing up and synchronizing when it plays is really coming from their Spotify account or their Apple account. So in order for anybody to make money outside of Spotify and Apple in that we need their blessings to do so.”
I wonder if you could bear with me here a minute, I want to just back it up a little because when we started talking we went from this headphones app you were developing to Flo we sort of glossed over.
“The struggle is what I call it.”
Well that’s what I wanted to say. I, instead like you talking to me I’m listening, I’m loving it all but it can’t be that easy. You had to stumble across the way. What were some of the what were some of the hurdles you had to clear before Flo is a reality.
“Well, I’m a Energy Broker by trade, has had been since 2006 so I really knew nothing. It was the App Store was on fire. Everybody was making apps and my business partner had really wanted to. And so we, we tried a little bit with discovery two years later we tried the same idea and we were out on a ranch and everyone was arguing over who got to play music and it kind of came to me in September of 2014.”
“And so for a couple months we started looking at developers, it was probably a list of 50. We spoke to 10 of them at least three times and really learning how to develop an app. It was really difficult. And what it comes down to is competent developers who have the appropriate skill set to be able to execute your digital product and the experience of a mobile application and the cost. So we had outsourced Flo Music to a great company called Fueled that was purchased by a company called Okta for the first two years and we actually launched low in May of 2016. Cool launch party in New York and a lot of media tech and music media there, successful party. However, our key performance indicators of people returning to the app how long they stayed in the app. The growth rate monthly growth rate of the app wasn’t there. And we kind of gathered after we had gotten 400,000 installs a lot of money had been invested. It really just dawned on me like, hit me like, a ton of bricks that we had thought this would be a small small investment of roughly a quarter million dollars to build an app get it out there kind of see what happens.”
“We ended up spending quite a bit more than that. And I’d rather not say.. “
No, no but it does. I mean anybody who’s, anybody who’s played in that space knows it adds up superfast.
“Right. And in a way it’s a war of attrition to continue to keep yourself there. You know if I had any advice for somebody who was thinking about building an app is, make sure people want the idea. Do some focus groups ask some friends for some good you know honest advice and hire people in the house. So if you hired a contractor, an app development company you’re gonna be paying anywhere from $70 on the really low side but for the great app development companies, these developers today are in high demand from Java C plus back in PHP you name it. Python upwards of $132 an hour for some dev ops developers. So if you can hire in-house one of the reasons we didn’t hire in-house is because there are so many facets or knowing who to hire managing these people. I had never had any experience so it made sense to us to hire a contractor.”
“Well two and a half years in we’ve hired our own in-house developers and our burn rate has gone down from a divisible of five. Now our money is getting us a much more. You know there’s some times where I felt like the developer at the contracted firm wasn’t really shooting us straight. So, you know, a lot of learning and I’ve always liked Malcolm Gladwell is the outlier of his 10,000 hour rule that if you do something you’re not going to be great right away when you start it.”
“I’ve been extremely fortunate to have a business partner who’s also the investor who has been both patient and who has held the conviction that this concept had legs to it that there was something to the jukebox. I mean the jukebox has been successful. It’s not like we were recreating the wheel we were building the jukebox of today and here we are. And we’ve got a growth rate substantial monthly active user base with a growth rate and we’re marketing and growing and artists using the app. So nothing good comes easy. “
“And there was a big learning curve that was very expensive that you know there were a couple emotional breakdowns in there. It was tough. There’s another line on my forehand to prove you know these things. So, I saw this as maybe you know the opportunity to make a couple million dollars and really take me level up. And we, you know, we’ve gone after it and it’s been nearly five years that we’ve been on this journey and really everybody who’s close to it, as well as new people that we pitch this new product that just got changed a little bit. But its scope and reach is much greater, its applications is much greater than the Flo 1.0 before it. We wouldn’t be here today with people saying “wow this is amazing” “yeah, awesome” the feedback you can just feel the momentum and the vibes you can hear it in people’s intonation that there’s something special going on and we wouldn’t have had that if we gave up. Persistence is resistance. Nothing good comes easy. And you know Steve, there’s no guarantee that this thing’s gonna be a success still. It’s just that we’re at a place now that there’s more excitement organically happening from Flo as well as the people that we’re contacting.”
“And it’s because we endured the failure, we listen to the users and we learn from our mistakes picked ourselves up back up and kept going. So really it’s just about perseverance and you know when things get tough just get through it don’t quit and you might. There’s no guarantees in life. But you might find yourself in a stronger, more reinforced position than you were before. And that’s typically how things in life go. This is what it’s about. This is the vibrance of the American free market experience in entrepreneurs and believing that you can effect change through a product or service. And it’s it’s not boring. I’ll give you I’ll give you that and the rest is history.”
Fashions change but we all still gotta wear clothes.
We all still want stuff.
It’s just how and where we buy it changes. I love on demand and free second day shipping as much as the next guy, but it’s every bit as important to remember why we love the things we love as it is to have them delivered instantly. Yes the Flo Music app is the jukebox of the 21st century. But more importantly, it’s a reminder of why we love music in the first place because we get to share it with the people we love. Keep that in mind the next time your favorite song comes on the radio.
Download the Flo Music app.
And share it with somebody that means the world to you. My thanks to Alex Oberman. And until next time. I’ll be keeping the seat one for you. Right here in the Corner Booth.