How You Met My Podcast

I love opportunity. When it knocks, I answer, and last week it knocked loudly in the form of Jay Andreozzi, General Manager of AmalgamDigital.com. I’ve done work with Amalgam Records before so I was already familiar with the company when the press kit arrived. After a few emails I learned he was launching a downloading website for independent Hip-Hop artists and not only would it include albums and singles, but also podcasts, and he wanted to include podcasts of my radio show, The Adam B Experience. Obviously I sent over the shows I had on MP3, but I also wanted to learn more about the venture, so I sat down with Andreozzi to find out all about Amalgam Digital. I ended up learning a lot, and not just about the site, but also about digital aggregators, how CDs are actually most retailers’ biggest loss leaders, and how the shelf space at Best Buy has become the most expensive real estate around.

Adam Bernard: Start me off with the basics regarding your site. With all the downloading sites out there why did you decide to create Amalgam Digital?
Jay Andreozzi: As a Hip-Hop fan I go to some of the traditional digital retail sites and sometimes I find it hard to find what I’m looking for, or some deeper catalogue stuff, so what we’re trying to do is to make that stuff a little more accessible for unsigned artists and labels. I’m also the type of person that likes to walk into a mom and pop record store and talk to somebody that really understands and is passionate about the music and can tell me about a featured artist’s album. I may hear an artist on one album and then they’ll put me on to something entirely different that I didn’t know about. We’re trying to recreate that experience digitally with a relational database where I can click on the artist and it will show everything from all different labels and if he’s on any podcasts, radio shows, interviews or other artists’ albums. For instance, if we have anything from Hushh and they’ve been featured on your podcast it will take you to their artist detail page.

Adam Bernard: That sounds great, but what about all the artists that are already on iTunes?
Jay Andreozzi: Actually it’s hard for an independent label to open up with iTunes. In the beginning they were trying to get catalogue in there and they built themselves up, but now it’s at the point where you need something substantial to catch their attention otherwise you’ll have to go through a digital aggregator which in the traditional physical world would be a distributor. So you’re gonna have to go through another service or company to get into iTunes. Right now AmalgamDigital is not currently set up to work with digital distributors and digital aggregators. We prefer to work directly with the independent artists and labels because at the end of the day we’re fans and we’re trying to provide a platform for them.

Adam Bernard: I’ve heard horror stories regarding profit splits, what are Amalgam Digital’s?
Jay Andreozzi: We sell all albums at $8.99 regardless of the amount of tracks or content and all individual tracks are sold at 89 cents unless it’s deemed free by the label. We pay the artists and the labels $7 per album download and 70 cents per individual track download.

Adam Bernard: How do you make any money that way?
Jay Andreozzi: It’s an ad based model.

Adam Bernard: Do you have plans to work with anyone other independent artists?
Jay Andreozzi: We’re really trying to pursue getting a lot of vinyl only releases. There was a lot of really cool stuff that only came out on 12 inch in the mid-90’s and that’s stuff you don’t traditionally see in the some of the bigger retailers. We already have some catalogues from the 80’s, for example we’re getting in the B-Boy Records catalogue and they have a lot of unreleased albums from Scott LaRock and stuff that only came out on vinyl that for the first time ever will be available digitally.

Adam Bernard: Everyone talks as if downloading will eventually kill the CD. I know Amalgam is also a label, Amalgam Records, so I’m wondering, do you think it’s possible that there will be a future where downloading and CDs will be able to live in harmony together?
Jay Andreozzi: There’s always going to be a market of fans that want the physical product. I do see it slowing and I do see the number of units that we initially press getting smaller and smaller each year. The interesting thing is the way it’s set up now, and a lot of fans may be unaware of this, with retail and the larger stores, your Best Buys, your Virgins, you have to pay a retail marketing program. For Best Buy a CD is a loss leader, they want people to remember they bought an album there and come back to buy their refrigerator. Where they’re really making the money is in real estate, they’re selling shelf space. That’s why you’re gonna walk into a Best Buy and you’re gonna see 50 Lloyd Banks albums on the wall, the major labels can afford to have that product placed there. You won’t see as many independent titles because the budgets just aren’t available. In a lot of cases what happens is artists don’t end up making money and labels often fold because the money didn’t come back from the distributor because a lot of money is spent at retail just to put product on the shelf. That’s after the manufacturing cost and all the promotional expenses that go into the product.

Adam Bernard: So digital distribution is a way for smaller labels to sidestep some of those costs.
Jay Andreozzi: Yes and where it benefits the artist is we’re not paying for the manufacturing of product and we’re not paying the two to three dollars that’s built into every CD to have it sit on a shelf at a Best Buy. Now you’re eliminating four to five dollars of cost from a product and there’s going to be a higher profit margin.

Adam Bernard: But you’re still going to press up CDs, right?
Jay Andreozzi: Having physical product available, I believe, is key because as a fan of an artist I may want vinyl and I may want a CD, but the shift is coming, we’re watching more and more retail stores close and it seems like these retail marketing programs that they’re offering, the prices are increasing and I’m gonna have to pay Best Buy $50,000 just to have my independent CD sitting on an end-cap somewhere. CDs could become like vinyl and be a niche thing. Maybe one day my kids will want to go out and get CDs because that’s what people did 20 years ago.

Related Links

Amalgam Digital: AmalgamDigital.com
The Adam B Experience: Podcasts (look for the Adam's World logo)
The Adam B Experience: Playlists