"It's Motown all over again." Smashing Pumpkins' drummer, now a CEO, wants to save the music industry through tech

In the 1990s, few bands were more adored by critics and fans than the Smashing Pumpkins. Combining the brute force and technical chops of heavy metal, the ambition and theatricality of arena rock, and the dark, disillusioned lyricism of grunge, the Pumpkins dominated concert halls, television sets, and bedroom stereos at a time when I was in my formative years as a music fan.

They also reigned during a much happier time for the music industry. Propped up by exorbitantly high CD prices and the explosion of MTV as a cultural mainline into the hearts of America's youth, music was making more people more money than ever before.

But since 2000, the amount of revenue created from selling or streaming music in the US has been cut in half, from $14.3 billion to $7 billion. Blame iTunes, blame Napster, blame Spotify and Pandora, or blame shortsighted record company execs -- regardless of how we got here, there's a new normal for music industry stakeholders, who are all feeling the pain. And while it's an overly simplistic way to frame this crisis, the debate over loss revenues has largely centered on artists decrying tech companies for ripping them off.

Which is part of what makes ex-Pumpkins drummer Jimmy Chamberlin's recent move into tech entrepreneurship so fascinating. He's lived through and reaped the benefits of the golden era, witnessed its decline, and is now the CEO of LiveOne, a Chicago-based startup trying to do its part to breathe some life (and hopefully dollars) back into the music industry. LiveOne's flagship product is called Crowdsurfing, and it's designed to make livestreams of concerts or other events a more social experience by allowing users to interact with other people watching the stream like they would at a real event. These virtual concertgoers can find others to chat with, filtering by location or Facebook friends, and LiveOne already counts huge brands like Budweiser, Red Bull, and Yahoo as clients.

So what made Chamberlin switch to the other team?

Part of it is that he has a wife and kids, And while the life of a tech entrepreneur isn't always conducive to family life, it's better than being on the road all the time. But disillusionment with the music industry also prompted the move.

"As the music business began to get more homogenized and less creative and more cookie cutter, some of the dynamics that were attractive to me as a young man started to disappear."

In other words, for Chamberlin, the decline of the music industry is about more than dollars and cents.

"When every part of your life has a capacity to be vaporized"

"Music in general is going through a very big dynamic change," Chamberlin says, "and I think music is always reflective of the culture that consumes it. And if the culture becomes more disposable, when music delivery is more disposable, when 90 percent of a young person's life is in the cloud, it becomes less about product and more about experiences."

That's part of why so much of youth culture has shifted its attention toward genres like Electronic Dance Music (EDM). For fans of artists like Skrillex and Kaskade, the experience of seeing the artist live, dousing yourself in the sweat of strangers, and seizing up amid a light show that cost more to produce than most artists make in a year is at least as important as the music itself. Not that experiences haven't always been a huge part of music fandom. But in the age of playlists and instant availability of content, the idea of buying a record and locking yourself in your bedroom to listen to it front-to-back is downright antiquated. Chamberlin thinks evidence of this can be found in the fact that nobody cares if a band "sells out" and ties its music to brands anymore.

"I think it's indicative of the disposability of the culture, when every part of your life has a capacity to be vaporized," Chamberlin says. Music moves in and out of people's lives so quickly today that there's no time to worry about whether the band is on Exxon Mobil's payroll. And even if that was the case, most people wouldn't care because there's less of a connection today between fans and musicians. In the pre-digital days, we expected more from artists because fandom took a greater buy-in on the part of the listeners.

"If you wanted to participate in the culture, you had to have the T-shirt, you had to see the video," Chamberlin says. "Nas, Eminem, Beastie Boys or Flavor Flav... those people had cultural components that still drive the culture today."

It's not that Chamberlin is some old man yelling at the ravers to get off his lawn. "I love EDM and that music, and I think it's super important and critical," he says. But will it have a longterm effect on culture like the artists he cites? Or will it be lost in the fog of short-term millennial memory, like an embarrassing drunken Facebook photo we delete the day we apply for our first real job? Ask that question in ten years, Chamberlin says.

So what about non-EDM artists who don't want to suffer and starve for their art? Chamberlain even says of his team at LiveOne, "If this were 1992, we'd probably be in a band together." Should modern day creatives just say "Fuck it" and get tech jobs?

Reliving the Motown moment

Musicians love to complain about low royalty payments from Spotify and Pandora. But at least they have it better than Barrett Strong.

Strong co-wrote the 1960 hit "Money (That's What I Want)" which, along with generating millions in royalties thanks to cover versions by the Beatles and the Rolling Stones, helped kickstart the success of Motown Records which would go on to produce 79 Top Ten singles over the next ten years.

But Strong's name was removed from the copyright filing by Motown executives who claimed that his inclusion as a co-writer was a clerical error, thus depriving him of a share in the royalties. And yet, many who were there when the song was originally recorded back Strong's claim. "It all emanated from Barrett Strong,” said recording engineer Robert Bateman. (The New York Times has a good rundown of the whole story).

This is only one of many instances where Motown artists, through lack of business savvy and possible malicious intent on the part of Motown executives, lost the rights to millions in royalties.

Then, as now, it's easy to blame the evil corporate fat-cats for depriving artists of fair royalties. But while the powers-that-be are anything but innocent, Chamberlin says the only way most artists will make a decent buck in this business is to demand it.

"It's going to be up to artists to make sure they have a place at the table," Chamberlin says. "We're reliving this Motown moment where everyone's going to wake up and realize it was only because artists didn't have a place at the table. I'm not passing any blame, I'm just sitting here and watching it happen again."

Chamberlin emphasizes that, even during his time with the Pumpkins' at the height of the CD, artists have always been at the financial mercy of labels and publishers. The only difference between then and today is that in the 90s there was much more money to go around.

"I just think when money's swollen like that there's this 'high tide rises all boats' type of mentality," he says. Now that the money's dried up, labels are still demanding their share while doing less than ever to help bands.

"If you look at a record label today versus a record label 20 years ago, what are you getting from a record label now that you actually need? You need a physical product, you need a street team, and you need money to go on tour. Well, record companies aren't doling out any of that."

Record labels do play an instrumental role in getting artists on terrestrial radio stations, which is still a powerful driver of success. As much as digital svengalis like to say the success of, say, Macklemore & Ryan Lewis was a purely organic YouTube-driven phenomenon, the group still paid Warner Music Group to get their song on the radio. The big difference is that Macklemore retained the rights to the song. It was a triumph of business savvy as much as digital democracy.

Of course no matter how much control artists retain over their work, it won't change the fact that there's less money than ever to go around. And with recording and distribution costs fast approaching zero, there are more bands than ever vying for that cash.

That's why startups like Chamberlin's LiveOne, which sees missed revenue opportunities in something many bands are already doing (livestreaming), could play a crucial role in getting the industry back on its feet.

Today's startup culture is like the music scene in the 90s

Chamberlin's interest in entrepreneurship intensified around the time Groupon was starting to give Chicago some serious startup credibility.

"I knew (Groupon founder) Andrew Mason, knew (CFO) Jason Child, and just got swept up in the dynamics of that team," Chamberlin says. "It was dynamic and creative in the way the music scene was in the 90s. If this were 1992, we'd probably be in a band together. Through the years I found that there's tons of similarities. It really does attract the same kind of mindset."

Soon, Chamberlin was getting invited to sit in on investment rounds. And in the course of those meetings, he discovered the technology underlying Crowdsurfing. Chamberlin knew from his days with the Pumpkins that livestreaming concerts could be a positive revenue stream for artists, but he also felt that no one had really figured out how to keep people on the livestream page so that brands (who, like it or not, are paying for all this) could make an impression with users. By looking to replicate the physical experience of attending a concert as closely as possible, right down to avatars so users can see the faces of the people watching, Crowdsurfing turned Chamberlin into a believer.

He joined the team in April 2012, coming on as a Director of Partnerships, and about a year later was approached about filling the role as CEO. Now, instead of banging snares and kickdrums in front of thousands of fans, Chamberlin is striking deals with clients and working with payroll. But despite the shift in cultures, Chamberlin's passion and excitement hasn't wavered -- not even when it comes to that most dreaded and painful aspect of entrepreneurship: raising money.

"When you put your passion first, and you're not selling snake oil, the investor part becomes an attractive challenge," Chamberlin said. "It's not a drudgery, but a celebration of what you've created. There's no better benchmark for the company than its investors and who's been participating." Next month, LiveOne will begin its Series A round.

But regardless of how slick Crowdsurfing's technology is, do people really want to sit and watch an entire live event online? Sure, maybe they'll watch the Oscars or football games or other events people are already accustomed to consuming on their couch. And there are millions of fans who dipped in and out of livestreams of Coachella and other big music events. But to engage a viewer for a long period of time with a concert, something they're accustomed to seeing live, is a tall order. And without engagement and a considerable amount of time spent-on-site, it may be hard to attract the kind of advertising dollars that can translate into meaningful revenue for creators.

Chamberlin says he has metrics to back up the fact that Crowdsurfing's social tools do keep people on site. And as consumers continue to demand that content be available across all of their devices, the streaming of live events is only poised to explode, while advertisers have just begun to explore ways to monetize it.

As Chamberlin said in our conversation, people love music today for the experience at least as much as the songs. And to Crowdsurfing's credit, it's trying to optimize an experience to the point that either fans or advertisers will pay for it. Who knows, maybe some of that money will trickle down to creators in a significant way.

If so, it won't single-handedly save the music industry. But by adding another way for artists to make money, maybe it will at least convince a kid to start a band instead of a tech company.