Ron Suarez — Tools for Independence

By Bud on July 7, 2007 TrackBacks (2) Comments (5)

Ron Suarez and I dissect the business model of his new company, PromoVUZ. PromoVUZ is targeted at independent musical artists who want a low cost, digital means of promoting and selling their content. We discuss the revolution that is sweeping digital music distribution and the role that services provided by companies like PromoVUZ play.

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Filed under: Ann Arbor, MI | Digital Distribution | Finding Gaps | Information Technology | PromoVUZ | Ron Suarez | Web 2.0

In this podcast (download ipod compatible, 175MB), Ron Suarez and I discuss his new venture, PromoVUZ, which took runner up in the Great Lakes Entrepreneur's Quest. In a sentence, PromoVUZ offers promotion and marketing tools for independent artists. PromoVUZ allows artists to track the audience that is listening to their promotional content and who is purchasing their songs.

PromoVUZ has partnered with Dick Huey of Toolshed, a digital media marketing firm, and Tunecore, a digital distribution firm, in developing and marketing his tools. Both partners also focus on independent artists. PromoVUZ and its partners offer tiered services to their clients with bargain basement entry level pricing. For instance, PromoVUZ will warehouse one song on the Internet for one year for $10. Tunecore and Toolshed have similar business models where they charge the artist for their services, often offering starter packages at very low rates.

Obviously, this business model differs from the traditional record label where the label signs an artist to a contract and then subtracts promotional and marketing fees from CD and other proceeds. As Courtney Love recently noted, the costs record companies charge back to artists are enough that most bands only earn very small wages for the albums they record if they earn anything.

When I asked Ron how he was able to do it for so much less, he pointed out that he had eliminated many middle layers that required significant compensation. It should also be noted that PromoVUZ has high technology leverage. Almost all of their entry tier services are fully automated, not requiring human intervention. PromoVUZ's more premium priced service offerings do require human intervention and are priced accordingly. Nonetheless, because of PromoVUZ's technology leverage, the overall cost still continues to be much less than may be typical of traditional labels.

Ron has an interesting background. Through an IBM program in the 1960's, he was exposed to computer programming while attending high school. Later he earned a doctorate in cognitive psychology at the University of Michigan, completing a post-doc and holding a couple of academic posts at nearby universities. During this period, he spent a lot of time automating the processing of wave form data and figuring out other ways to make lab work more efficient. He also briefly ran a Grateful Dead bootlegging operation (these were tolerated by the band which viewed them as marketing for their concerts).

When I asked Ron where he wanted to be in a year, he mentioned that he wanted to be in a position to sell the business. At that time, he thought he would be profitable from artists' fees alone.

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» PROMOVUS-Dr Ron Presentation from Naresh

I went to a presentation delivered by Dr .Ron about his new business PROMOVUS.Dr. Ron idea was to provide a web enivironment in which musical artists can public their songs and he is going charge. only $10 per song per... Read More

Tracked on October 3, 2007 6:26 PM
» Tools for Independece from Clarke Keranen

Ron Suarez, interesting, independent and innovative. Do you have to like music or business to be successful in the music industry? I would say both must be true. Ron has succeeded in both recognizing a need and cutting out the... Read More

Tracked on December 14, 2007 8:23 PM

5 Comments

Amanda Murray on November 19, 2007 2:28 PM
This is a very interesting approach to offer an emerging musician the chance at getting his/her break. One question that immediately enters my mind is that what if the musician knows nothing about marketing or promotion? It is true that this may help them, however; are there enough musicians that want a break and are willing to work on the marketing and promotional efforts too? Also, this is not the only "job" that Mr. Suarez has. Is there enough time to dedicate to PromoVUZ and effectively take care of the rest of his obligations? Another thing that I have to question is the credibility of the industry. This software may enable anybody with money to start promoting their musical skills, regardless of their true ability. Do you think that this could potentially overexpose the industry resulting in something similar to brand overextension? It will be interesting to know how this company is going to affect the music industry overall. Amanda Murray
Mary Cassista on June 1, 2008 8:12 PM
I am a college student taking a class in entrepreneurship. My teacher directed us to the Michigan Innovators site. I watched Dr. Suarez’s July 7, 2007 pod cast and felt that he made several points that supported concepts I’ve learned in class. I then surfed the net to find out recent developments regarding PromoVUZ and have found nothing newer than late 2007. I don’t know if that means that PromoVUZ has not been successful or if the company was sold and is running under another name. Either way, I will comment on two things in the pod cast that related to my class. The first issue is the globalization of the company. PromoVUZ appears to be pursuing a global presence through its connections with Guitar World and the reggae music distributor. It’s a terrific strategy. PromoVUZ looks like a bigger presence in the industry than it really is. It also creates avenues for distribution to a non-US audience. However, does the company have the knowledge to help non-US indie artists with their licensing requirements, etc. if those artists wanted to use PromoVUZ services? The second issue that is of interest to me is how an entrepreneur decides what type of business to start and how it gets off the ground. Dr. Suarez’s description of how his interest in non-top-40 music lead him to PromoVUZ made me realize that a good entrepreneur is always thinking like a good entrepreneur! Dr. Suarez didn’t just realize that others shared his musical interests. His realization was quickly turned into a way to make a business out of it. He took this idea and ran with it. I thought that his decision to hook up with Dick Huey’s company was also an excellent example of entrepreneurial thinking. This connection aligned him with a knowledgeable partner with valuable industry connections. And, lastly, while Dr. Suarez is getting into a new industry – music – he’s not straying far from his field of expertise – computers. That’s another valuable lesson for a budding entrepreneur – utilize your skills as often as possible.—Mary Cassista
Brian Dickhart on June 10, 2008 4:06 PM
Hello Dr. Ron, PromoVUZ is a great way to let the "little guys" in the music industry be heard. Its almost like the artists are controlling their own label. The PromoVUZ target market is pretty large. The largest obstacle for independent artists is to get their music heard without a huge investment or loss to a traditional record label. It gives the artists a better idea of what is involved to promote successfully in such a competitive industry. ProomoVUZ will benefit greatly from the strategic alliances with Toolshed and Tunecore. These two companies already have their name out there and help PromoVUZ get their name out there. It seems that the corporate cultures of each of the partners are similar so the alliance should be a successful one. This is yet another great business idea utilizing the power and versatility of Web 2.0. Good Luck in your Venture, Brian Dickhart, Eastern Michigan University
Matthew North on March 31, 2009 10:10 AM
Ron's idea for PromoVUZ is a great one and one that can curb the high barrier to entry cost for aspiring artists when they had to use major recording label companies. One great concept of PromoVUZ is that because it is virtually all automated, the services can be used from artists around the world. This globalization strategy opens up PromoVUZ’s potential to every artist in the world, as opposed to those only in the U.S. or North America. What PromoVUZ does is really unique and I think a great thing for the music industry. I would be willing to bet that a lot of great artists out there never make it to the big-time and some probably quit trying very early on because of the very high costs that the major recording labels charge to produce the music. It has to be quite discouraging for an artist to know that he or she may be selling thousands of albums daily, but making very little money for it. With PromoVUZ’s services, these artists can hopefully have a better chance of sustaining a place in the industry. I think that his desire to sell the business within a year may be a little lofty. While I think the business and the idea are great, I just can’t see the company being that profitable in only one year. It was hard to find any information on the web regarding where the company stands now.
emu_student on October 18, 2009 8:20 PM
PromoVUZ seems to have a great approach to structuring and pricing services, as well as a great understanding of the music business along with your partners. These are essential parts of a strong business plan and this goes along with how well you did in the Great Lakes Enterpreneur’s Quest! You described PromoVUZ as having a “staircase model” that goes from your hosting of one song on the Internet for one year for $10 to providing additional services as artists start making more money and need more sophisticated services like customer analysis, promotional management, and legal assistance with licensing. You are essentially being problem solvers for independent artists and making the music industry accessible to what you are calling the middle class of musicians. I’m interested in how you are marketing this, as the interview was more about the origins of the business and the idea itself. I found it interesting that you mentioned that artists should put their music out through multiple channels since more people know about iTunes and myspace than things like PromoVUZ. Have you thought about how you are going to measure customer satisfaction and get feedback from artists on how this is working for them beyond the analytical data that you can obtain from the website? I hope that when you do sell the company, that the Michigan connection doesn’t get lost! It’s great to have innovative thinking here in our own state, especially in Internet businesses and industries like music that are heavily dominated by other parts of the country.

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