With Loudcrowd, Nabeel Hyatt Sees Mult-Billion-Dollar Opportunity in Music Gaming: “This Thing Is Ours to Screw Up”

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if you hang out on Loudcrowd long enough, you’ll probably hear a lot of cool new music. (The groups currently being played on the site include Friendly Fire, Justice, Phoenix, Santigold, and The Twelves, and the labels Conduit has signed up include Beggars Group, Domino, DFA, Downtown Records, and Modular.)

The pitch to artists and labels is that Conduit is a new way to monetize their recordings, by introducing tunes to listeners in a social context—more like music used to be before the iPod made listening a passive and solo act, in Hyatt’s view. “Our goal as a company is to create engaging experiences that people will pay for,” Hyatt says. (See the full interview below.) The existing experiences, which revolve around Dance and Spin, are just the tip of the iceberg, he says. Conduit will roll out new games regularly, some complex and competitive, others light and easy, but with music as the constant element.

The ultimate goal, Hyatt says, is to reenergize people around music in the same way that MTV did in the 1980s—except that Loudcrowd has an easier path to monetization than MTV did, in Hyatt’s view. Conduit may have to work out a few bugs before Loudcrowd can climb to MTV’s heights—the site gave me a female avatar even after I’d clicked “male,” for example, and apparently there’s no way to change genders without re-registering under a different e-mail address. [Update, March 18: With help from the folks at Conduit, my avatar’s been turned back into a dude.] But the site does have the smell of something big.

Here’s the whole text of my interview with Hyatt.

Xconomy: What kind of reception has Loudcrowd been getting so far at South by Southwest?

Nabeel Hyatt: We’ve been very happy with the reception. This is the perfect place for us to start talking about Loudcrowd, because obviously there is this strong mix of Web and consumer folks, and today is the start of the music festival as well. We have a booth set up, and it’s pretty crowded. We’re having a launch party tonight. It’s been great to walk by the lobby of the Hilton and see people playing Loudcrowd.

Loudcrowd Spin gameX: It’s interesting that you should put it that way—“playing Loudcrowd.” From what I can see, Loudcrowd is more of an environment or a community, with games that you can play embedded in it.

NH: I think that’s exactly how we talk about it ourselves. I just happened to look at those people and see them dancing for other people on the site, and if you watch, it’s a form of play. But Loudcrowd is definitely a community first. If you don’t care about music, then Loudcrowd isn’t the place for you. I think what we really boil down to is people who care about music enough that they actually want to do more than just listen to it; they actually want to interact with it. We’ve seen a general trend with music in the last 10 years that it’s become more isolated and passive, and those things are not good. It’s become more iPod earbuds, and typing “White Stripe” into Pandora and leaving it to play for two hours. I think the gaming helps to raise the level of engagement, so that you’re actually paying attention to the music. That’s a general trend of going back to what music used to be—something that you attended to, instead of something that’s just Muzak.

X: From the consumer’s point of view, Loudcrowd may be about attending to music, but how would you describe the commercial proposition? Isn’t the underlying goal here to get people to spend more time on the site and ultimately see more ads and buy more tracks?

NH: I think the aspect of music that is completely underutilized in most businesses and online companies is that people are absolutely willing to pay for music—they feel a real passion for it, and it’s still one of the big cultural drivers. But they are not willing to pay for a commodity product, which is what music has become. Even last year, well into the recession, you saw that Rock Band and individual Rock Band downloads were selling very well, and that concert revenues were up. All of those things point to the fact that music is more important than ever, and even more of a driver of commerce than ever. It’s just that recorded music isn’t the way to drive it.

Our goal as a business is to create engaging experiences that people will pay for, and of course those experiences are proprietary. They are ours. They are unique experiences that you can’t get anywhere else. We are using that [to make money]. By the way, we don’t focus on advertising at all. We feel like consumers will pay for this if it … Next Page »

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Wade Roush is a freelance science and technology journalist and the producer and host of the podcast Soonish. Follow @soonishpodcast

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