At that time, I had asked if they planned on servicing hip-hop DJs and fans. But the group of DJs, engineers, marketing/lawyer/go-to-guy needed to walk before they could run.

It seems as though Beatport has been on a power walk, considering that today the company has millions of downloads and upwards of 80 people that fill the floors of the Jonas building on Broadway.

The company is world renowned as a global leader in independent dance music, evolving their site to version from 1.0 to 3.0, offering over 100,000 tracks from some 2,700 music labels.

The success behind their rapid growth has been the result of putting a huge emphasis on their original target, the DJ, while improving the customer’s online experience via customized features, like “My Beatport,” an Amazon-ish “Users Also Bought” referral tips, and the launch of Beatportal that is the center for electronic music, videos, and podcasts, along with DJ and club news.

After Beatport went through the typical growing pains most start up companies endure, they were ready to dive into the hip-hop world, and in February of 2008, the company launched Beatsource.

Shawn Sobo, Beatport co-founder and marketing director states, “We have a lot of the infrastructure with Beatsource now that we didn’t have with Beatport. I’m four years wiser as a marketing guy, all the content guys are four years wiser; we have better management and better accounting. We’re just a better company all the way down the line.”

Beatsource’s director of operations of Urban Music, Anna Thompson, explains how things got rolling. “When we started this project, it was, ‘Take the Beatport model and make it fit hip-hop.’ We started with a blank slate, but everyone we hired as a resource, myself as the exception, really know hip-hop.”

This includes radio talent Mario “Chonz” Rodriguez from KS107.5 and long time Colorado based hip-hop promoter and community supporter, Francios Baptiste, along with Tim “Mantis” Barnes and Steve Christou.

“I’ve been doing the hip-hop scene for a really long time and I’ve been proud of everything I’ve done,” says Francios.“I’ve been through some really exciting points of my life, but when I get into something where I see the writing on the wall that can revolutionize an entire industry, that’s exciting. My biggest things has always been, ‘How do I make the hip-hop community better? What can I contribute to it?’”

Anna continues, “We hired these people because of their very specific knowledge of certain genres, and they know hip-hop better than anyone else in the building. So we’re taking what they know and applying it to the Beatsource model. The be-all-end-all is to be really true to hip-hop.”

Although Beatsource is definitely catapulting off of the Beatport foundation, it’s still apples and oranges when it comes to how businesses is done at the end of the day. Francois elaborates, “It’s just the process of translation. The dance world isn’t completely different than hip-hop, but it is different in terms of the style, the marketing and communication. But the overall business model for Beatport works well for Beatsource.”

The model that got Beatport to where it is, and a model that is now providing the same services and product to Beatsource customers, is the 24/7 access to thousands of quality MP3 tracks from wherever you’re at. In the past, DJs would need to digitize their vinyl tracks to an MP3 format. This was not only time consuming, but the results were not always on par. Now, as electronic DJs discovered four years ago, the high quality, ready-to-go hip-hop track is there for between $1.49 to $2.49, based on the music’s exclusivity, file format (MP3, MP4 and WAV) and release date.

Shawn explains the connection between the needs of the evolving DJ and what Beatsource and Beatport bring to the table, “When people go from vinyl to the digital format, you can re-buy that content. Chonz, for example, who used to play all vinyl is now all digital. All the content that he had, the old Run DMC tracks, the old KRS-One tracks, he has to get the digital format. If you’re a working DJ, you’re going to buy that music again, you’re not going to steal it.”

For Francios, who has spent many, many years in the hip-hop world, even he was taken aback by the sound that came from the speakers. “The quality of music is ten times better than what they’ve been stealing or trading. The sound is absurd. In my car, I naturally listen to music loud. I’ll admit that I jacked some stuff, which was like 192 bit rate. In testing Beatsource, I purchased the music off the site legally of course, but not only is it so much louder in my car, but the detail and sounds I heard were amazing.”

That’s one of the main things that led him to spreading the Beatsource gospel to the DJs. He tells them to, “Kick it up notch. When you’re in the club the sound quality alone is going to be 10 times better…your set, your mix tapes, or whatever else you do with music.”

While the quality of music is highly important, so is the selection, along with providing all the versions of those tracks, from the instrumentals and scratches, to the remixes and a capellas. This is key when the company goes to make their label deals.

For those that have been in the DJ game for a while, or for those of us that spent much of our youth in record stores for hours at a time, the Internet has enabled labels, DJs and music fans to reach across continents from their laptop.

Meeting this need is really the essence of both online portals, says Anna. “We want to be that mom and pop record store that is disappearing from every street corner, from the people that we employ that used to put the records up on the shelves for you to listen to, to the whole experience that all of use grew up with. We’re looking for all ways to revive that within the digital space.”

Shawn explains further, “iTunes is like Virgin Megastore. Do you shop there? Or do you shop at Wax Traxx here in Denver. If you live in California, you go to Amoeba. If you live in New York you go to Fat Beats. Everybody has their niche record store that speaks to them.”

But for a DJ who isn’t in New York or San Francisco, who lives in a town where the only music outlet is Wal-mart, or for a DJ that lives in a far away place, the physical limitations have been frustrating. For electronic DJs, their gain was having a digital source like Beatport, where they could download a track and play it their gig that night. And now the hip-hop DJ can jump on that bandwagon.

“That’s what we’re most excited about,” says anna. “This is the fist time in the hip-hop world where somebody has taken a global approach. We want to bring all those hip-hop scenes that are taking place in France or Germany and bring them to everybody.”

“Beatport and Beatsource do what the physical world can’t do,” Shawn adds. “If you’re a small record label in Germany, you really can’t get any CDs to Denver. Even if you have the money and you’re well-funded, it’s almost impossible to get CDs through your distributor and stocked on shelves here.”

Because the digital music business model is new to hip-hop, business development managers like Francios are starting at square one, which involves an education process that may be more involved than what the Beatport biz dev people went through.

“The hip-hop industry is slightly different from the dance industry. The DJs in the dance industry own their own labels. The DJs in hip-hop don’t necessary own their own labels, they just DJ. The independents are just scattered everywhere. So it’s the kind of thing where we had to figure out which labels we wanted to bring onto Beatsource, and say, ‘Hey, here’s another opportunity to sell you music.’”

Through this process something unexpected happened. The learning shoe was actually on the other foot as Francios and the others discovered a wide array of hip-hop communities spread all over the world.

“I was kind of ashamed of myself when we were tracking down these indie labels and discovered just how much more music and better music there was out there,” Francios admits. “It really opened my eyes to what the major labels and some of the public are not able to see. That’s what made this store so exciting. We are really about to let the world know about worldwide music. I can’t understand German or French hip-hop, but some of the beats are AMAZING.”

Not only is this digital environment delivering the opportunity for artists and indie labels worldwide to bring their music to the masses, the reverse is also happening, where people in India and Greenland are buying up tracks. It’s the same experience of going to the record store and digging through the crates, where you can chance upon thousands of tracks and spend those hours digging from your keyboard and mouse.

This is one major key differentiator to the local record store; the ability to buy music in foreign countries while also discovering how hip-hop is done in France versus the U.S., or in Italy versus Africa.

One exciting thing for me personally was getting access to the back catalog of classic, old school hip-hop tracks, like KraftyKuts’ "Gimme The Breaks," "Bassline" by Mantronix, or "Feel The Bass" by Dynamix 1+1.

“Hold on tight,” Francios says, “’cause one of the main areas that we’re targeting for Beatsource is to that back catalog. I was never a true DJ, but I was a fan of the DJ. In college I lived with a bazillion DJs and I promoted. There was nothing like that 12” single that you got…the clean version, the dirty version, instrumental, a cappella, a remix version. It was so much fun back in the day to hear those songs from the Golden Age.”

This involves going back to the education process, working with both indie and major labels that have bought the rights to compilations that contain those classics, while also getting their current content.

When it comes to the old school catalogs, Francios shakes his head, laughing. “I don’t think they understand what they have. They have a goldmine in a vault somewhere just sitting there.”

Those dusty vaults came about when major labels absorbed little labels over the years, which piled up masters to hip-hop classics they can only be found on eBay for a hefty price or by the music fairy, who happened to wave her wand when you hit up a garage sale or ARC Thrift Store.

“Majors are mainly concerned with selling their current music, or the issue of people stealing it. But we’re trying to tell them that, 'You’ve really got a mint in there if you let us dig in and let us go to work for you. That’s the next big thing for us and them.”'

When it comes to the money issue and the rights issue, Beatsource and other like companies realized a long time ago the reality of the digital age. Francios states frankly, “The business models of old are not relevant for today’s kid. ‘Okay, you’re not going to let me buy it? Then I’ll steal it. Or I’ll borrow it and burn it, or whatever it takes, I’m gonna get it.’”

Francios, being a music business person himself, has amassed hundreds of articles on the progression of digital music, how labels went from DRM (Digital Rights Music) format, which restricted how a person can use an MP3 they purchased, to how labels have begun to move away from DRM because of consumer outcry and the people's demand to listen to the song they purchased on their MP3 player, mobile device, or computer.

Beatport has always been DRM-free, and slowly but surely, the record labels are realizing that opening the door to digital music sales equals money in the bank. “It was a huge percentage of sales [for labels] last year. They’re already in on the ringtones. But we’re talking about the whole song here,” says Francios.

He and the team believe that as more and more labels embrace the digital business model, “all the great music from the 80s, 90s, and even from the stuff from today will be available. The conversations, from the time we started to today, have flipped. I feel really enthusiastic that in the next four to six months we’ll have the majors on there. But at the end of the day, if they come around, they come around. Right now our focus is on the DJ and the music. When you focus on those two things, everything else falls into place.”

Up until the beginning of 2008, you had to be an English speaking, credit card holder in order to buy off of Beatport. Many, many workhours later, Beatport's site and customer service is now localized, supporting seven different languages, including German, French, Italian, Portuguese, Japanese, English and Spanish.

Shawn explains how the company didn’t have any other choice but to support international customers. “If you’re in France and you listen to French hip-hop, we want to be that portal where you can go purchase that your music. We want to speak your language, we want to have your content and take your currency. Would you go to site to buy boots that that only took Yen? You wouldn’t do it, even if they were the hottest boots that you couldn’t buy anywhere else.”

The extensive amount of effort, time and money Beatport endured to support all these languages allowed Beatsource to do the same from day one. This expanded their reach sales wise, enabling more people from around the world to view songs in their native language, speak with a representative who understood them, and also purchase songs through an alternative payment method, PayPal.

“It’s a whole other level of professionalism. It’s opened up a lot more opportunities for us around the world,” says Shawn.

Part of their global reach not only means accessing international labels electronically or by phone, it means having warm bodies in those local music scenes as much as possible. This included adding two Beatsource label people, Sebastian Zeiger and Christine Kakaire to their satellite office in Berlin, which now has 20 people on staff working with labels in Europe and beyond.

They’re also planning for a Tokyo office within the next 12 months. Speaking about why they chose Japan for the next office, Shawn states a number of reasons. “It’s ranked in the top five for both electronic and hip-hop sales, plus it’s a technologically advanced country so the MP3, mobile music thing doesn’t scare anyone, there’s a lot of DJs…it’s just a great market for us to go to next.”

While it’s still early in the game for Beatsource, Francios is already looking into the crystal ball to determine their their next steps, while also reflecting on his years in hip-hop, which led him to this place. “When you look at the history of hip-hop, 25 years ago it started in neighborhoods of New York. And now it’s in the most obscure places in the world, where people are using hip-hop to express a political message or just to talk about where they come from. It’s amazing to look at where this music started from, where it’s at now, and where it’s going to be 25 years from now.”

If you want to test drive Beatsource, they have 10-free-tracks promotion you can download after registration, which includes the chunky beats of Actioneer on Om Records, a bit of Uk/Grime via New Flesh, a taste of Italy's Bassi Maestro, and chip off the ol'e hip-hop block, DJ Jazzy Jeff, among others.

www.beatsource.com
www.beatportal.com

-Kim Owens, April 9, 2008