Business Rx: A jukebox democracy in search of voters

April 24, 2011
The Entrepreneur

What if you could have a say in the music playing in your neighborhood bar — not by feeding the jukebox, but by popular vote? University of Maryland at College Park computer science graduate student Randy Baden pondered that idea and came up with a mobile application that would allow consumers to do just that, using their smartphones. He developed the app as an entry for the University of Maryland Mobility Contest, challenging students to create mobile applications to support campus life. On campus, places such as the student union could use his app. But he saw potential beyond the campus. He teamed up with MBA student David Croushore to turn his app into a business. The pair is calling their D.C.-based company Atmosphere Entertainment and the application system “Atmo.”

The Pitch

Croushore

“Location-specific social networking and social media have become a big movement, but the one thing that none of those companies let you do is actually affect the environment you’re in. Our system allows users gathered in a public place to use a mobile app, vote through their phone, and impact the music that is playing in that place. If you’re out at a bar with your friends and you have a favorite song, you can find it in our playlist, you and all your buddies can vote for it, and it will play. We’re democratizing the jukebox.

“The Atmo system is currently in public beta, operating in two commercial venues: the Terpzone bowling alley and lounge in the student union at the University of Maryland, and Justin’s Cafe, a bar near Nationals ballpark in Washington, D.C. Once the commercial Atmo system is ready, venues like these will pay a subscription fee to use the system and have music streamed into their venue by Atmosphere Entertainment. Their patrons (our users) will be able to use our free app or go to our Web site to vote for the songs they want to hear, and the most popular songs will play.

“Our business model faces a bit of a ‘chicken and egg’ problem. We need to be hosted in physical venues in order to create users, but we need a large user base to become attractive to venue owners. Our marketing strategy needs to be sensitive to this issue, and we are working out the best way to approach the early stages of our rollout.

“We need to find a way to monetize the user base. We want this to be free — we think it won’t spread unless it’s free — but we don’t think there is enough money on the venue side, so we need to find a way to make money on the user side.”

The feedback

Asher Epstein, managing director, the Dingman Center for Entrepreneurship

“Monetization is always important but it is critical to first clarify the value proposition of the site. Most social networking services are focused on advertising, but if you don’t think you can get enough critical mass to make advertising successful, that becomes a challenge.

“A big advantage of your platform is you have very specific location data for your users so your advertising could be much more targeted. Because your primary relationship with your consumer is an audio one, there may be an opportunity to splice in some type of location-based audio advertising. That’s a unique angle that might be worth looking into further.

“Your whole value proposition revolves around the power you’re providing consumers and how that translates to their likelihood of staying longer in that bar. Can you lock promotions into the voting process — perhaps discounts or free drinks for Atmo users? Collect data to quantify the habits of your users. If you can show that the average Atmo users is staying in a bar longer than other customers, you can make the case that they are likely buying more drinks, which is a compelling sell to bar owners looking to increase revenues.

“At some point, you’ll have to monetize, but at this phase I would focus on the value proposition and user adoption — getting a solid base of users that keep coming back to your platform.”

Reaction

Croushore

“I agree that right now we need to focus on proving out our value and then building out our user base.

“I do think we have a user acquisition potential that makes advertising revenue reasonable in the long run, especially given the fact that we will have location-specific data and also context behind users’ decisions. The leap is getting from now, where we have about 60 users, to that future where we have a few million users. The really encouraging thing is so far, all of our user feedback has been incredibly positive.”

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