Way Behind The Music

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Backup Player Coran Capshaw rarely steps from behind the curtain. He built his company to help artists like John Legend supercharge their brands and businesses.

Unsung Masses Just some of Musictoday's 200 employees. Many are musicians themselves, including Nathan Hubbard (at lower right), who runs day-to-day operations. All of them are rabid fans.

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If there's any musician who can make sense of the tectonic upheaval in the industry, it's John Legend. Before teaming with Kanye West and Snoop Dogg on his major-label debut, Get Lifted, the ultrasmooth R&B singer-songwriter worked as an associate consultant for the Boston Consulting Group (under his given name, John Stephens). When the recording sold north of 3 million copies worldwide--and snagged a trio of 2006 Grammys, including best new artist--John Stephens the consultant had some cautionary words for John Legend the musician: Protect your brand. It was some of the best advice he'd ever gotten.

Legend, who's 28, knew people would be lining up to take a piece of every dollar he could pull down, and that if he went the traditional route, there wasn't much he could do to stop them. After all, it was the label, retailers, and ticket companies in the sweet spot at the center of every transaction with his fans. "I can't let someone else have more control over the relationship people have with my music than I do," he says.

So Legend took control in a way that would have been unthinkable for a new artist just 10 years ago. He still releases music through a major label, Sony BMG, but last fall he formed John Legend Ventures with two friends and began researching how other bands were creating their own businesses and increasing their leverage in the market.

They found that the Internet has become not only a channel for distributing music but one for insinuating bands into the lives of their most enraptured fans. They found that the efficiencies of the Web are such that for very little cost, an artist can build his own online operation and outsource everything, from peddling "merch" to boosting the fan club to ticketing and marketing. And they found a full-service company that had built an infrastructure so vast and so efficient that no one could rival it.

Legend's new partner is a virtual unknown outside the industry. The machine, by design, remains invisible. It's called Musictoday.

Founded by Coran Capshaw, the storied but reticent manager of the Dave Matthews Band, Musictoday works behind the scenes to fashion an online identity for artists, then connects them with fans--and drives commerce. It feeds the sort of passion, or obsession, that turns a $20 teddy bear in a Dylan shirt or a $45 Red Hot Chili Peppers messenger bag into a necessity. It fulfills fantasies: owning Carlos Santana's black fedora, say, or playing blackjack and softball with the Backstreet Boys, or sitting in on a soundcheck with John Mayer. Musictoday can even help fans become part of the music itself, as when Christina Aguilera incorporated their voice-mail messages into "Thank You," a song on Back to Basics, her most recent release. "This is all about taking your fans behind the velvet rope," says Matt Blum, Musictoday's fan-club manager.

While the big money is still in touring, Musictoday rechannels revenue streams--merchandise margins and ticket fees that traditionally padded someone else's pocket--in the talent's direction. For new or lesser-known bands, that money could mean the difference between touring and trading in that Stratocaster for a busboy tray. "Somebody you've never heard of will sell $10 million in merchandise in two years," says Jim Kingdon, executive vice president. And for megabands like Dave Matthews, which has more than 80,000 fans paying $35 a year for fan-club membership alone, the money can snowball.

"We're heading to a do-it-yourself world where artists will be taking more control of their careers," says Michael McDonald, John Mayer's manager. Or as Legend puts it: "In the not-too-distant future, this could mean you won't need a label anymore. That's the pot of gold at the end of the rainbow."

In The Foothills of the Blue Ridge Mountains, in an unmarked former chicken-pot-pie plant outside Charlottesville, Virginia, the music revolution is humming along nicely. Here in Musictoday's 350,000-square-foot headquarters, that revolution is most visible in the plastic bins filled with stuff: shower slippers, coasters, and leather coats plastered with the Rolling Stones' wagging-tongue logo. Eminem bobbleheads. Phish onesies. Snoop Dogg rubber wrist bands. Carole King yoga pants. As harmless, even useless, as these tchotchkes may seem, they are upending the industry for one simple reason: Traditional retailers aren't selling them--the artists themselves are. "That direct interaction is unique," says Capshaw. "It's a bonding experience."