Phoenix music service Arena pays artists more than Pandora, Spotify

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Arena Music is a Phoenix-based music streaming service that pays artists higher royalties than other services like

To some of the biggest movers and shakers in the music industry, Damon Evans has become a wanted man.

But the founder and CEO of Arena Music is determined to remain elusive by making his Phoenix-based platform more than just about the money in an industry where the bottom line is the only line.

Evans has created what he described as the only streaming platform that’s not financed by a major label. Arena represents a threat of sorts to the big guys with a platform that offers an alternative. Evans said they have approached him wanting to invest and his response is always the same.

“They need us out of the way. They want to break it and have it go away,” explained Evans, who said that in the early days, the corporations tried unsuccessfully to get him to move to a paid model. “Streaming services always stay underwater (and) slaves to the major labels. … Arena will never become anything in the major label system.”

Arena Music

Where: 4808 N. 24th St., Suite125, Phoenix

Employees: 22

Interesting stat: Paid and ad-supported streaming generated 51 percent of music revenue in 2016, bringing in a total of $3.9 billion. In 2015, streaming music was responsible for 34 percent of the music industry’s annual revenue according to the Recording Industry Association of America.

Details: arena.com

Evolving format

When Evans launched Arena in 2013, it was his nimble reaction to a changing market in which fewer consumers bought music to own. The Phoenix company actually started in 1997 as a conventional distributor that physically put CDs and records on shelves in then-music hubs like Tower Records and Sam Goody. When preferences moved from physical to digital, so did Evans.

When they changed again, Evans responded with Arena as an on-demand free streaming service without ads or a monthly subscription. The goal: Offer musicians and artists an opportunity to earn a fair living doing what they love by allowing them to earn higher royalties than popular streaming sites. Meanwhile, consumers enjoy free exclusive music and the ability to build playlists from independent and major-label artists.

“Every one of the (other) platforms targeted customers. Arena was designed as a viable option for artists that want to have sustainable careers in the music industry,” Evans said.

Arena began with 750 artists and labels that brought 275,000 registered listeners. Today, Arena has 803 artists and labels, 706,000 registered users and 3.5 million tracks, according to Evans. Arena averages 750-1,100 new listener accounts each day.

The platform can be accessed through Arena’s website or the Arena Music app.

Arena's merchandising division supports the music side. In addition to artists’ music merchandise, Arena Merchandising has the equipment and expertise to offer printing, product development and other marketing-related tools to traditional customers ranging from schools and small businesses to churches and tattoo parlors.

Streaming is the “it” method when it comes to music consumption. In 2016, for the first time ever, streaming music services were responsible for more than 50 percent of all U.S. industry revenue, according to the Recording Industry Association of America, which cited paid services like Spotify and Apple Music. Last year also saw a decline in paid downloads, with sales for CD and digital services like iTunes falling.

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Damon Evans said his goal for Arena Music is to offer musicians and artists an opportunity to earn a fair living doing what they love by allowing them to earn higher royalties than popular streaming sites like Spotify and Apple Music. (Photo: Mark Henle/The Republic)

'Millennials don't buy music'

Evans described a typical contemporary consumer: He’ll sign up for a 90-day free trial with a streaming service. On day 89, he’ll cancel the account and create a new email address and start over with a fresh account. This makes it difficult for paid services to keep subscribers.

“Today’s consumer is really unique. Millennials don’t buy music. They jump between services,” Evans said.

Arena artists earn a full 1 cent for all streams, which is exponentially more than Spotify and Pandora, according to Arena. Arena artists also earn no less than 50 percent of merchandise revenue — for T-shirts, hoodies and caps, for example. There’s also a Listen to Own rewards program that gives listeners the option of choosing between Arena credit or a free download when they’ve fulfilled certain listening criteria. The model is patent pending.

“For us, it makes sense. We want to pay (an) artist a full penny per stream. (With other services they) must be part of a major label to get that,” Evans said.

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Damon Evans, the founder and CEO of Arena Music, said he is determined to remain elusive by making his Phoenix-based streaming platform about more than just money. (Photo: Mark Henle/The Republic)

Helping independent artists

Evans works very closely with the independent artists that come to Arena. Clipper Arnold and his Phoenix punk band Red Tank! are among them. The band formed in 2010, and although it has collaborated with some local labels, it is unsigned and independent. Most recently, the band collaborated with Arena for its album "Bio/Feedback," which was released last summer.

Arnold, the front man and guitarist, said knowing that Arena understands the independent mindset made partnering with Evans extra appealing.

“They are fully independent and focus on helping independent artists flourish and create some sort of stability,” Arnold said. “Damon and Arena have this hope of growing independent music, especially in Phoenix. Being out here, it’s nice to have something that aligns with that goal.”

The benefits, Arnold explained, include the higher royalties and helping to lay down the merchandise and marketing infrastructure that independent musicians can struggle with.

“They have a vested interest and providing that locally is really something I appreciate. They’re filling this need that a lot of other companies aren’t recognizing or responding to sufficiently,” Arnold said.

Raised in Lubbock, Texas, Evans was on his way to California when a detour to visit his parents in the Valley proved to be permanent. He left a banking job to work in a warehouse for Caroline Distribution, which was the first label for bands like Smashing Pumpkins and Hole. Here’s where Evans’ affinity for independent music was cultivated. When Caroline was purchased by EMI, Evans broke out on his own and started the company that eventually became Arena.

Back in the day, labels still controlled what consumers had access to because they determined what went on shelves. As an indie distributor, Evans would place independent content next to what the majors were pushing.

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A portrait of Arena founder Damon Evans on Thursday, August 31, 2017, in his office at 4808 North 24th Street, Phoenix. (Photo: Mark Henle/The Republic)

Pulling the pieces together

In an industry where streaming platforms struggle to break event let alone profit, Evans said Arena is debt-free and turning a profit, “Because we chose to do everything opposite of what’s being done in the industry.”

Evans knows he and Arena’s model are being studied and scrutinized. He’s well aware that trends and fickle preferences could put him in a vulnerable spot when pitted against the financial giants of the industry. Still, after three years, “No one has been able to come close to how we put the pieces together.”

He is not intimidated.

“The reason we’re safe is because none of them have thought about the artist. It’s all about making the money, not the art,” Evans said. “Because we don’t think like that, we always elevate.”

 

 

 

 

 

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