Regular readers of Online might be familiar with the story of how Adam Driscol - along with fellow founders Be Rozzo, Jeremy Ledlin and Nick Moore - gave Oasis their first London gig and only made a net profit of three quid. Their response has been to embrace the net. Now they film every gig of every unsigned band that plays at their venue, archive them, and plan to sell them on the internet once a broadband market is established, and the bands have made it big. Channelfly began archiving the bands last summer. Nearly 200 different bands play at the venue each year, and the archive already holds exclusive concert footage of chart newcomers Coldplay, Badly Drawn Boy and current industry darlings Elbow and Idlewild. But to build a successful music distribution company, Channelfly says you have to consolidate your business in the offline world, and boost your takings by building revenue streams offline.
The company now owns the Student Broadcast Network (a network of 49 college stations) and hosts a Channel 4 late-night music show, the Barfly Sessions - held at the Monarch in the heart of London's indie scene. It makes money through the door of the venue and behind the bar. It sells advertisements in the magazine and on SBN and sells content to companies like iChooseTV. Channelfly already sells MP3s on its website, but says it has to play a waiting game while the market for digital distribution is established.
Channelfly raised money through the Alternative Investment Market (AIM) and went for its first round of funding in November last year. It raised £3.5m with an initial share price of 50p. The company returned to the AIM market in July this year and raised a further £4m through an institutional placing.
Since August, the company, which employs over 50 people, has sought to consolidate and last month they even dropped the dot.com suffix from their name. With investor disillusionment about dot.coms increasing, Channelfly says it wants its name to reflect the broad nature of its business. Channelfly is still not in profit, and its share price has slid as confidence in internet companies has subsided. But it insists it has enough money to wait for broadband to kick in. So, clearly, this means that to have a successful online music company, you have to be able to make money in the offline world. That there is a market for digital music distribution, Channelfly is in little doubt. And it says that when that happens, it will have a diverse company that can promote music on several platforms - and that is the key to online music success.
