Ever since the emergence of Napster and the explosion of the internet, the music business has struggled to redefine its niche in the consumer’s pocketbooks. Why pay for an album when you can get it for free, or if it only has one good song? What’s the point of making music if you can’t get paid for it? These are questions that face the executives of a sinking ship that is today’s music business. Claes Loberg, CEO of Guvera, may have found a solution that takes care of the executives, the artists, AND the consumer. We took the time to figure out what Guvera is all about and why it has the potential to redefine the industry.
For those who don’t know, please explain your position at Guvera and your responsibilities.
I’m the CEO and founder of the company. I came up with the original idea as well as the algorithms and technology. Now I run the company, negotiate payments, that sort of thing.
Explain to me how Guvera works–a site where you can download music for free and yet the artists are compensated.
I think what we’ve done is created a business that offers fixes for two different industries: number one is the music industry being able to be paid for the actual download when all the customers just want to get everything for free. Number two is the actual advertising industry: up until now, advertising has actually been the annoying thing in the middle of content. If we’re watching TV or listening to anything and an ad comes on we sort of have to listen to or watch an ad. Now, when we’re in this interactive world when everyone can click past and get around and ignore everything. The idea of advertising being annoying just doesn’t work anymore. You’ve got these two industries: this sort of multi-billion dollar industry in music that’s actually losing money and can’t generate any revenue, and this ad industry that spends 600 billion dollars a year trying to create a relevance for themselves, yet everyone is able to get around it and ignore it. As consumers we don’t actually want to watch an ad so we record everything. Guvera allows the advertisers, instead of being annoying, to build their own channel and then have their own content within that channel. You can imagine Jack Daniels has a specific type of music or whatever car has a specific kind of music that fits within their personality, whether that be urban, or rock, or country, or whatever best suits the brand. What happens is that the advertiser pays for every download that their targeted audience listens to or watches. It basically just reverses the model: instead of the advertiser being this annoying thing, the advertiser actually becomes this useful thing that’s actually giving something away, but still achieves it’s aim of getting in front of customers.
Where did this idea formulate and what was the context in which you came up with it?
I’m actually from a mixture of backgrounds that sort of blend technology with advertising and entertainment. I think with any invention it’s when somebody actually knows multiple industries, sees a couple of different problems, and just strings them together to where a solution makes sense. It all started in 2002 when I sat on the board of, I think it was called The Brand Content Market Association in London, and the purpose of that was just the advertising industry trying to figure out where to spend its money. Their idea was based on this concept of branded entertainment, so I just suggested to the group “What if we just reversed the whole model and instead of advertisers making any entertainment, what if they just funneled all the entertainment that everybody’s already downloading for free, and we just allow you to become the channel?” It generated enough excitement that, seven or eight years on now, after we’ve raised the capital and built the technology, here we are for the first sort of “real” months now. We’ve been distributing all of Tech N9ne and all of the artists content through these various channels.
Well you kind of answered my question I was about to ask, “What experience do you have previous in the music business?” I mean, what you’re doing is a really big move.
Well I’ve been developing technology programs since the early-90s. My experience is blending with a heavy foundation in technology and a knowledge in entertainment projects along with advertising. It’s really the split of all trades that makes this possible because what I think is happening is that you’ve got a bunch of music executives and people from the music business that have tried to create some sort of answer to this idea of free downloading and a lot of those ideas have fallen apart. I think they’ve fallen apart because they’ve just been trying to answer one question: how do we actually respond to free music? I think if you’re trying to make something free that you want someone else to pay for, then it has to answer their motivation as much as possible. That’s where I think a knowledge of all trades comes in handy.
What made you guys decide to team up with Strange Music to promote Guvera in the United States?
Like anything in the world it was just connections. We met with a couple of different people over the last six months: some were rock, one was a country-rock. If we’re going to support a team of people and sponsor a tour, we want to make sure that they’re going to support us and help us build something together. It seems that of all the people we were speaking to, the urban market just a-hundred-percent gets it. With Strange it just worked and it’s been working very well. Within a couple of weeks we’ve seen sparks all over the place. It couldn’t have been a more perfect pairing. It’s just been phenomenal.
What do you guys normally look for in new employees? The people I’ve met are very go-getter and spunky types.
I think that pretty much every successful company–and I can guarantee that Strange is about the same–everything is about culture and you find a people that fit the mold of those who get the concept–and that can change as companies grow. I think right now we’re in the “maverick”, “revolutionary”, “fighter”, “get up and go” sort of concept that everybody has to have as well as be willing to work constantly and every hour of the night, putting everything together for the dream and actually build the idea that we’re putting together. That kind of thing naturally attracts itself to the team, and attracts members to the team. People look in and see these people putting in 23 hours of work a day and think I want to be a part of that. I want to be involved in that. You just naturally attract the kind of people to come out of the woodwork, turn up, and start working.
Is “Pirate Slayer” an official position within the company?
(Laughs) Definitely! Everyone has that as their second-role.
Nice. How’s the word spreading so far in the US as a result of this tour?
This tour has been our first real solid push. We launched in March with the beta to attract early adopters and appetize people around the music industry who are realizing that this actually works and fixes a hole in the business. Now that we’ve done that for a few months we’re now in this “push” phase of actually getting the word out there. Using the market research of Alexa.com, we did a comparison with Guvera, Facebook, MySpace, and Twitter, just over the last month to see where we’re at. Now that we actually got all these fans on and downloading music, how long they’re spending on Guvera compared to other sites is phenomenal. The most time spent out of all the sites is on Facebook, where I think they have an average of 30 minutes. What we’ve done in the last two weeks, is that people are spending just as much time on average on Guvera as they are on Facebook, which is just unbelievable for us.
That’s wildly impressive! I can understand that too though because after that first successful download I could imagine being pretty hooked. I want to ask about this revolutionary stance you referred to. I noticed lingo like “Fuck Pirates” that definitely separates you guys from hoity-toity companies. Do you plan on continuing that kind of message?
Absolutely! The whole theme, style, and tone that we’ve had definitely fits within this language. What it does is create a comfort with up-and-coming bands and fans around the world, to where they’ll be on stage with a Guvera shirt, and I think that message is more effective than anything. I think we’re a-hundred-percent on the right page, using the right language that fits within the artists and consumers. Why would we change it?
I wouldn’t either. Moving on, a lot of music labels are tanking and have been since the early 2000s. Where do you think they went wrong?
I don’t think it’s where anybody went wrong. There had to have been a lot of fear and concern. There’s always this fear that drives people when something goes wrong everyone reaches out and uses government, prosecution, or some sort of protection agency to create some sort of cradle that keeps the business alive–and not just the music industry, but every industry relies on to some degree. The thing that they hadn’t anticipated correctly was this movement of having instant access from every home to just about everyone else around the world. It doesn’t matter what kind of security you create: whatever can be written can be unwritten. If you’ve got some brilliant design or program, some equally or sometimes more-brilliant hacker will pull it apart. Anything you create to try and stop something from happening, somebody will find a way around it. The only thing that has to happen is to recognize that the model is actually disappearing. Music is just the first part of it. Realistically, people can bitch about the music industry and say they didn’t act fast enough, they didn’t do anything, but the reality is: everything they have done and everything they’ve tried is going to be mimicked and mirrored and modeled as we move into the same thing happening to film and television, news, sports, every piece of content that actually can be shared and distributed freely. You need to find a brand new model. The music industry was just the lamb to the slaughter, the first to go through the process. We’re figuring it out now and a lot of labels are still going to feel a lot of pain as this transition happens. I think companies like Guvera and similar are that little light at the end of the tunnel to where it starts looking like a new shift, rather than trying to prosecute in order to keep the old model.
You’re basically embracing what’s inevitable. Is that how you feel?
Definitely. I think that’s the same with everything in the world. If you look at history and see that there’s something that cannot be stopped–you can try and stand in front of it but it’s just going to run you over.