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Wednesday, February 3, 2010
The Pitch
Dympol aims to appease online music listeners, marketers and musicians
By Brendan Lynch
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Dympol Inc.
Headquarters: Waitsfield, Vt.
Web: www.dympol.com
Email: jziskrout@dympol.com
Founded: 2008
Employees: 3
The Pitch: Dympol is looking for $500,000 to develop an API and validate its technology.
After about 20 years in the music industry, the first drummer for the punk band Bad Religion has launched an Internet startup with a plan to make online music cheaper — and to help marketers as a side benefit.
Jay Ziskrout has started Dympol Inc., which comes from “discounting your music purchases online.” Ziskrout likens Dympol to a Google Adwords for corporate entertainment sponsorships. The software enables personalized “microsponsorships,” which can be bought for pennies at a time. Those pennies show up to the consumer as a subsidy for songs they buy through websites or through Dympol’s browser toolbar. The consumer gets a cheaper song, the corporate sponsor gets analytical market data, and musicians get money (rather than nothing in the case of online piracy). In theory, everyone is happy. The trick is figuring out how much of a discount to apply to the songs to benefit the consumer and the marketer, Ziskrout said.
“What we’re measuring is elasticity of demand,” he said.
The company has bootstrapped itself with about $400,000 from Ziskrout, friends and family. After leaving Bad Religion following its first album in the 1980s, Ziskrout worked in promotion for Enigma and Arista Records. He launched Epitaph Records’ European division and served as CEO of independent label Grita! Records before serving as COO of the CMJ Network, which published weekly trade and monthly consumer music industry magazines. While at Grita!, he started selling 99 cent MP3 downloads on the web site LatinoVision.com in 2001 — two years before Apple Inc.’s iTunes debuted in 2003.
“I discovered I was way too early,” Ziskrout said.
Now, Dympol is looking for about $500,000 in funding to validate its technology’s value proposition and to develop an application programming interface, so other software companies can use its technology in their applications. Ziskrout doesn’t believe “free” works as a model for music — companies valuing their product at zero are stuck in a race to the bottom, he said. But by discounting songs, Dympol is trying to give consumers a reason to be grateful to the brand subsidizing the song, or as Ziskrout calls it: good will. The company isn’t necessarily trying to solve the problem of music piracy (which reportedly causes $12.5 billion of economic losses annually, in addition to lost income, jobs and taxes, according to a 2007 report by the Institute for Policy Innovation), but sees the phenomenon as an opportunity, Ziskrout said.
“If you were to shave 1 percent off (online music piracy), you’re talking about billions of dollars,” he said.
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