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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In fact, Capshaw, Pollstar's manager of the year in 2004, is notoriously media shy. It took more than a year to arrange this interview, which proceeds with all the brio of a Quaker meeting. However detached he may seem, Capshaw is intimately familiar with every gear in the machine. "He gets the same reports every day that I do," Hubbard says. Capshaw will weigh in on the wording of a fan email, the timing of a promotion. "He'll ask, 'What was Robert Randolph's ticket count Saturday night in DC?'" says Flohr. "'What was Trey Anastasio's pre-sale?'"

Flohr's so confident in Capshaw's model that he switched sides. Four years ago, he left RCA and came to work for him.

What the Musictoday machine does particularly well is tame the chaos inherent in the unfun, unsexy part of the business. In early November, once again it's fans of the Dave Matthews Band triggering a frenzy in the warehouse, this time with pre-orders for its latest live compilation, The Best of What's Around, Volume 1. Tens of thousands of orders pile in, many to be delivered on the exact release date. (In the past, as many as 70,000 of the 470,000 or so CDs sold in the first week were purchased through the band's site.)

This massive facility, with white-tile walls from its days as a frozen-food factory, is the clincher for visiting band managers, agents, and artists--the part of the tour that seals the deal. Often, bands have come after trying to run their own stores and getting overwhelmed. "Sometimes we're competing against somebody's uncle who makes the band's T-shirts in his garage," says Hubbard. "In many ways, this is still an unsophisticated business."

Musictoday couldn't possibly coordinate orders of this scale, complexity, and precision without state-of-the-art warehouse-management software and equipment, such as handheld scanners and a $200,000 automated packing machine. The logistics are made even gnarlier by the special offers that bundle in exclusive knick-knacks and routinely turn the sale of a single CD into a shopping spree. It's a fine example of Capshaw's vision of the symbiotic artist-fan relationship--fans get special items, the artist gets the profits. But that kind of customization creates a fulfillment nightmare that would challenge any retailer--and bring a hungover band to its knees. All the more amazing that Musictoday boasts "a 98.4% to 99.8% accuracy rate," according to COO Del Wood.

The other side of the warehouse is like the stash of some obsessive-compulsive collector: 30,000 items from about 400 clients. The shelves, lined with different-colored bins, keep going and going. Ramones flip-flops. Cans of Arnold Palmer iced tea. AC/DC boxer shorts. And behind a locked door, pricier items, like a $5,000 lithograph signed by the Stones. The inventory, too, is organized for maximum efficiency, with the fastest-moving items on the front racks, within easy reach--"nose to knees," as Hubbard says.

Logistically, selling tickets is equally complex, with even less room for error. Just ask U2, not a Musictoday client. In 2005, it had to issue an apology when fans were left in the lurch by scalpers who'd infiltrated its site. "When we screw up, fans don't blame Musictoday," says Hubbard. "They blame the artist." So the company's system is built to handle near-instantaneous sell-outs as well as several hundred simultaneous events. It sells tickets for its clients as well as handling all the ticketing for certain arenas. The arena business is sure to grow since Live Nation owns, operates, or has booking rights at 170 venues worldwide, and its Ticketmaster contract expires next year. "Our system runs like a Ferrari," says Wood. For an Eric Clapton concert in October, it allocated 15,000 seats in 15 seconds.

Before acquiring Musictoday, Rapino, Live Nation's CEO, visited Charlottesville. "I was blown away," he says. "This is not a business you can dabble in. You have to invest in the infrastructure or you can't execute, and they have." The company's remote location has built-in cost advantages, namely affordable space and a top-flight young talent pool at UVA. In that sense, says Rapino, Musictoday "is impossible to replicate."

A few years ago, Nikki Vinci heard a song by a little-known rock band called the Damnwells and "fell in love." She went to the group's site and bought a T-shirt. "I felt like I was supporting them," she says. Without knowing it, though, Vinci had become a Musictoday customer. Now she manages dozens of Musictoday online stores--for Tiger Woods, Led Zeppelin, the Bonnaroo Music & Arts Festival (Capshaw is an investor; for more, see "The Temptation of Superfly"), even her beloved Damnwells. "I never forget what it feels like to be a fan," she says.

The challenge is not tainting the fan relationship: Musictoday tries to be like a church that happens to sell communion wafers.