“A juggernaut of growing influence,” “[one of] 100 essential websites,” “the future of all media” – in the late 2000s, Hype Machine was being fêted as few sites ever have been. Founded in 2005 by then 19-year-old college student Anthony Volodkin, the music blog aggregator unexpectedly exploded. Volodkin had sent links to the site, which he had built in his spare time, to pioneers in the online music world, but rather than critique his project, they began enthusiastically sharing it. By 2009, Hype Machine was considered so crucial to the ecosystem of online music that artists and their record labels were actively trying to game its popularity charts to promote their work.
Its meteoric rise is all the more reason why news about the website earlier this year was so unexpected: Hype Machine needed the financial support of its users to keep running. Without investors or funding, the site had been operating for the last 12 years on advertising revenue alone, but due to the shifting nature of ad buys, it could no longer rely on that MO. Having always been a lean operation, it only needed enough funding to pay three full-time employees (including Volodkin) and to keep the servers up. Thankfully, the site was able to hit both of its crowdfunding goals in mere months of announcing the campaign. Thus, Hype Machine whirls on.
I recently discussed Hype Machine’s rollercoaster journey with Volodkin. In our conversation below (which has been edited for clarity and brevity), he describes the changing economics of online advertising that reward the largest websites while starving out smaller ones, but also how users can buck this trend. In short: The indie ethos of relying on only the support of your fans now applies to websites as much as it applies to bands.
Noisey: In 2009, The Guardian declared Hype Machine one of its "100 essential websites." Now, less than a decade later, you’ve had to launch a crowdfunding campaign to keep the site running. What the fuck happened?
Anthony Volodkin: It's hard to overstate how much the Internet has changed in the past 10 years. Many of those changes affected Hype Machine, but there were a few that directly impacted us the most.
First, there is a big shift in advertising spending. Instead of ad dollars going to a wide set of individual sites, they now primarily go to Facebook and a handful of large services (Google, Snapchat) and publishers (Buzzfeed, Vice, Vox). The rest goes to programmatic ad exchanges that show a large volume of ads to targeted users at much lower rates. These ad exchanges sometimes work well for high-traffic sites, but yield little for smaller niche properties.
Then there’s the shift away from desktop web usage. This includes many of our own users, who now listen primarily via our mobile apps, which results in a decrease in desktop ad views. We’ve experimented with mobile ads a bit, but found that they bring in little revenue unless they are overwhelmingly intrusive. The mobile ads we tried in our app were various types of image banners shown in lists of tracks. It seems that full-screen, interstitial images and video would have brought in much more revenue, but at a significant cost to user experience.
How much was ad revenue at its peak versus today?
Because of the ad spending changes, we are seeing probably one-tenth of the revenue we used to get from advertising. It’s a big change and it’s why we started our funding campaign.
Hype Machine had advertising partnerships with other companies, like Buzz Media (now known as SpinMedia) and Townsquare Media. How did these play out?
We've worked with these and a few other partners (including Vice) to run advertising on Hype Machine. The deals are simple: The partner finds brands interested in our audience and keeps a commission of the ad buy. Usually, they work with a bunch of music sites at once, creating a convenient package for an advertiser. Before the sweeping changes in the industry, this worked well. We ran lots of ads for movies, music, car and electronics companies, partnered with brands on sponsored events, and more.
Today, a company offering ad space across a group of music sites has to compete with ad exchanges that identify people as “music listeners” based on what websites they visit. These ads aren’t always very effective, but the pricing structure still pushes other ad brokers to lower their own rates.
Has there been a decline in users due to the rise of other, larger online music services?
It’s hard to pinpoint the impact of a particular service’s growth, but overall there’s only so much time and attention people have for listening to music. The solution is the same as ever, though: offer an experience that others don’t, which we’ve continued to do.
Hype Machine focuses on surfacing music you don’t know you like yet and presents it with context so you can actively explore more. We index hundreds of sources to create an eclectic stream of new tracks, with links to posts so you can read about what you’re listening to. These recommendations from writers are one filter, and then our charts are the next one, where tracks that are resonating move up based on the community’s response. We make it easy to see what people—writers, listeners, etc.—interested in music are into right now.
Many services recommend music based on your listening history or similar listening patterns, which limits what you can encounter. There is a place for lean-back discovery too, but we think both listeners and artists benefit from a variety of approaches.
How much of Hype Machine's value is derived from the fact that you serve up music straight from blogs rather than from catalogs?
That’s an important part of the service. As a group, independent writers highlight lots of unexpected stuff, which you might not see in a playlist on a larger service or that’s just not available there. I am glad that we can spotlight this mix of hundreds of different perspectives with our work. And because music only gets onto Hype Machine once it’s written about, it’s a classic filter: If someone cared about a track enough to write about it, it’s likely worth checking out.
The crowdfunding campaign appears to have been a success. Why do you think there was such an outpouring of support?
The campaign has been a great opportunity to have a dialogue with our users about what we do. We now have over 3,500 supporters, which has allowed us to keep the service running for the past several months. As more supporters sign up, we’ll be able to invest more in developing our service and apps. Hype Machine provides a unique music experience, and our community’s response to the campaign shows they appreciate that.
Any surprising results from your discussion with users? Any suggestions you plan on implementing or new features that their support will allow you to roll out?
Mostly, it has been refreshing to learn directly about the role Hype Machine plays in people’s lives. I was surprised by the number of requests for Night Mode, an easy way to change the site colors to a darker set. It’s a small detail that turned out to be important. We recently released it to our supporters. We haven’t reached a level of revenue where we can build bigger things yet, but we are headed in the right direction.
Were there any other avenues that you considered to keep Hype Machine running?
We’ve always had some investor interest, but we’ve avoided this approach so far because the pressures of a traditional investment are not necessarily well aligned with making something useful for our audience. Tech investments work best when a company is on its way to significant scale. For a music product, this means building an experience that attracts the largest possible number of people, which often rules out services that prioritize emerging/lesser known artists, as we do. Hype Machine is built to serve listeners actively looking for new music, which is not a venture capital-scale audience. Changing our focus to deliver growth would have been a disservice to our community.
Has your unwillingness to sell users' information ever cost Hype Machine support?
We’ve probably missed out on some revenue. One more obvious area is just the kind of advertising that has run on Hype Machine: We’ve prioritized user experience over aggressive ads, so we’ve passed on some campaigns that would have made the site more frustrating to use.
Do you think that the "Hype Machine model"—independent websites funded by users rather than investors—will grow in popularity elsewhere online? Or are we doomed to the McDonaldization of the Internet?
It has been refreshing to see the continued growth of Kickstarter and Patreon. People have become more aware of how creative things on the Internet get funding and are more open to supporting them directly. Seeing this change was part of the inspiration for our campaign.
Whether or not this is a permanent shift in how services are funded on the Internet remains to be seen. We were lucky enough to have built a dedicated community over these last 12 years, and they have decided that they want to keep our approach to music discovery around. As long as we can keep making a service that people enjoy, Hype Machine will be here.