The President of the innovative music-tech startup Muzlive Joe Seok always wanted to build businesses. He started as an entrepreneur at a young age and experienced all the ups and downs of a business journey.
Now his company Muzlive is creating success for him and his team with their innovative product KiT, a smart device for music albums that can be attached with smart devices. The company is seeing phenomenal growth in the first two years of its working and Seok believes it’s the uniqueness of its product.
Joe Seok spoke to Koreatechdesk.com regarding the company Muzlive, the startup business and the growth in a tough industry like music.
1. Please tell me about your personal background, and what are you working on currently?
I started my own business at the age of 23. It was even before I graduated from university. I made good money in my late 20s and also experienced losing everything. And now, it’s been 12 years since I started the business that connects music with technology. During that time, I collaborated with CJ E&M and SM Entertainment, and the service launched in America was introduced at the New York Times and NBC Today Show. Currently, I am a representative of MUZLIVE. It is the business that supplies new multimedia, which is called the KiT. This business keeps expanding in the music industry.
2. What motivated you to get started with your company? And how did your earlier career choices lead you to where you are now?
After 11 years of running the business, I’ve realized that it was too difficult continuing my business with only digital content. I thought people do not seem to easily pay for intangible goods. Even the film industry seemed like a space sales business, not the content business. I thought to run a business with digital content, it was necessary to sell space or physical media that could link to unique services. In the music industry, the CD was still the most consumed media and it accounted for 50% of the market, then the music consumers used smart devices instead of CD players. So I thought there should be a new media for the music industry. This idea came up with the KiT, which is a physical medium that operates on smart devices. The business requires both physical manufacturing and technology, and an understanding of the music industry. Fortunately, I had experience with both the music and technology industry for about 11 years. I also had experience in manufacturing in the past for 7 years. So, it seems I was optimized for this KiT business.
3. Please tell me more about your founding team? And how did the team come together?
I met the current CMO when I worked for a Swedish multinational company. He was one of the employees there. He joined the KiT business and worked hard to source the contents in the music market at the beginning. Now he is in charge of all sales in MUZLIVE, and works with record labels and music distributors. The CTO of MUZLIVE is responsible for the core technology of the KiT, which is Encrypted Ultrasonic Waves Communication. He made a significant contribution to MUZLIVE with this special technology. Three of us were sure about the KiT’s vision and we were willing to dream the future together as MUZLIVE. As I think back, the strongest motive for being together was that we trusted each other.
4. How have you attracted users?
I believed that I could make a new value by providing physical albums to music fans, who buy CDs to just collect or decorate. However, what music fans really like about the KiT Album is the exclusive photos and instrumental function. Fortunately, the KiT Albums went viral between fandoms. Every time the KiT Albums get released, they get all sold out during pre-order. Until now, more than a hundred titles have been released and more than one million KiT Albums have been sold. Currently, we are working on developing a fan community inside the KiT Player, so they can enjoy the KiT Album to the max.
5. What’s your business model, and how have you grown your revenue? What strategy worked best?
The fundamental business model was the B2B model so that we supply the KiT Albums to the record labels and music distributors. From this November, MUZLIVE will run kitalbum.com. We target the global market and sell our products directly to it. As we run this website, we expect to secure both B2B, which is the KiT supply, and also B2C, which is the album sales in the market. In the first year of supplying the KiT, we sold 50,000 of them. It was far more than our expectations for the first year of business. For the next 2 years, we have reached a 2000% growth. Currently, as long as supplying the KiT Albums, we collect the KiT Album usage data and analyze them. Since this April, we have been providing the data to the record companies. The data includes a user’s region, language, age, and how much of each music track has played. Surprisingly, any traditional music media, such as CD, tape, vinyl, could not provide any useful data. Because they are not online. These data are the most profitable and significant, but it never been recorded and analyzed. KiT will become a new medium to solve this problem. Also, we expect this data will strengthen the relationship between the record companies and MUZLIVE by providing this amazing data platform. In the long run, we hope to create value as a multi-music platform – providing physical media and digital data platforms.
6. What are the challenges you face and how did you overcome it?
Currently, we only sell KiT Albums in Korea. However, about 60% of the users are from overseas. We expect to release global artists’ KiT Albums. In this case, each country should proceed with a copyright agreement. Existing copyright provisions exist only for the digital sound recording service and the right for the physical recording. KiT has a characteristic of being a physical product that downloads and transmits content. Therefore, we need to build a mutual understanding of the application of copyright rules. Fortunately, copyright is a form of notification, not permission. If there’s a reasonable regulation, the cost of rights will be settled. Now, we’ve signed a contract with the Japan Copyright Association, which is our first time making a contract with a company outside Korea. We plan to make contracts with copyright associations in China and the United States.
7. How much money have you raised in total so far? When was the recent funding round?
The company has attracted investment of about 5 billion won. The most recent investment was carried out in March, and the company value was estimated at 32 billion won at that time.
8. If you had to start over and raise funds, what would you do differently?
The introduction of the company for the funding at that time seemed to boast of our performance. It didn’t well explain the technical values and strategies for achievement. So, MUZLIVE hasn’t explained our unique technology and its development. In the next round of business introduction for the investment attraction, I will focus on the value of technology and its future.
9. What are your milestones for the next round? and what are your goals for the future?
The next goal is to create a B2C sales channel, which will be launched in November. And another goal is to release a KiT Album of a Japanese artist in the Japanese market. Our ultimate goal is to implement KiT Album sales and data platforms at the same time. The data platform will be very useful and valuable for record labels, distributors, and actually everyone in the music industry. In order to take advantage of this unique data, the market must increase the release of KiT Albums instead of CDs, so that the value of MUZLIVE can reach higher levels.
10. What’s the best advice you’ve ever received? And what advice do you have for someone who is interested in doing similar things like yours?
My father used to say “There is no other reason for failure, but you are not ready to succeed on your own” to me and it’s the best advice for me. And if I advise someone in the future, I would say “What I can do is more important than what I want to do, and what I should do is more important than what I can do.”