When, how and why was the company formed? Mike Clark, GD Worldwide:

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Chapter 4 E-environment

In any business, you segment your high value customers and you treat them accord- ingly, but in the music business that doesn’t really seem to happen at the moment. In terms of visibility, we are looking to build this as a strategic business and we know we are not for everyone. We are in that long tail and finding those people is going to be important. We are looking for other alternative communities. Our marketing will take a kind of grassroots approach, in the venues themselves. Q. How do you earn your money? Mike Clark, GD Worldwide: We don’t want to be in the business of horse-trading an artist’s audience as that’s the most valuable thing the artist has, so we create an audi- ence community but don’t hit them with advertising or sponsorship. We take a 20 cut of every transaction that happens in the Usync channel – which is a recognition that we give the artist as much money back as we can, so they can decide how to reinvest it. We don’t ask for exclusive rights deals or touch their copyright and don’t ask for a share of future earnings, and don’t ask for a cut of sales outside of Usync. They can also set the prices they want to. If they want to give their material away for free, that’s fine by us. Q. How much have you generated in sales so far? Mike Clark, GD Worldwide: I don’t have specific figures I can share at the moment, but the situation we are at as an organization is that we have around 30 artists that are either active or building their backstage areas with us. We’ve only just enabled people to come to the site remotely and sign up, and we’re signing up around two or three people a day at the moment. And we haven’t really started any heavy promotion of that yet. We’ve started to work with companies like Sonic Bids [which allows musicians to produce electronic press kits] to promote ourselves to the artists in their database. But we’re also not overly aggressive in terms of acquisition – we don’t want the 3m Myspace artists, we want the hardworking, independently-minded artists who want to put the effort in to make it work. Q. What’s your position on DRM [Digital Rights Management]? Mike Clark, GD Worldwide: We use MP3. Everyone’s started to talk about it but we’ve heard from various people over the last few months that DRM is dead, and that consumers are starting to vote with their feet. DRM has definitely run its course and I don’t think it has a future. There will be much more sophisticated non-DRM models that will emerge in the future. Q. How can bands get access to financing outside of the label system? Mike Clark, GD Worldwide: We are looking at different tools that we can use to support artists from a financial perspective. We feel that copyright needs to be supplemented by some other device or right, and we are looking at ways we can bring those tools. We have looked at Creative Commons and it is interesting, but it is focused on bringing flexibility to current copyright law. We feel that there is another step we could take that is completely outside of copyright, and we are talking with some top entertainment lawyers here in the UK and in the US to help us develop that, and we will probably bring that to market in around a year’s time. In terms of financing, for a small band, getting money together is difficult. So we are working on how to solve that problem. We are thinking that in an artist community, other artists may be willing to put up some money to help other artists, maybe in the form of a levy on some of the transactions.