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Interview with Jaxsta (ASX:JXT) CEO Josh Simons
September 11, 2023
We spoke with the new CEO of Jaxsta (ASX: JXT), Josh Simons, about the commercial potential of the company’s core music credits database, the huge upside from vinyl.com and Josh’s own creation, Vampr, a ‘linkedin for creatives’ which has been acquired by Jaxsta. The financial backing of Wisetech founder Richard White is a big help for Jaxsta, which has big plans to grow.
See full transcription below.
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Stuart: Hello and welcome to “Stocks Down Under.” My name is Stuart Roberts, and I’m one of the co-founders of our service. And joining me on the morning of Tuesday the 5th of September, 2023, is Mr. Josh Simon, who’s the CEO of Jaxsta, ASX, JXT. Josh, good morning.
Josh: How are you?
Stuart: Well, I’m feeling pretty good because I now know that all the records in my collection have been properly cataloged by Jaxsta, and those artists will, therefore, be in line to receive payments. You are the man who’s responsible for all that.
Josh: That’s true. We are doing some interesting things with vinyl records and obviously credits, which is kind of our background and our origin, which is baked in the world of metadata and making sense of it so that artists ultimately get paid.
Stuart: Right. Look, let’s go back in time. So, Jaxsta is the world’s largest credits database. So, anytime anyone has recorded a piece of music, Jaxsta’s people have gone away and recorded who were the artists who were involved. And with those credits, they’re then in line for proper compensation under the relevant copyright laws, I’m guessing is broadly a way you can describe this.
That’s been building up over several years, but you’ve since bolted on a couple of other interesting businesses to that. Talk to us about the origins of Jaxsta and where that core business is likely to go.
Josh: Yeah. So great questions. I’ll break them down into…bit by bit. So, we collect metadata from crucially official sources. So we’re the only database of our kind that actually collects all that information from all the major labels, all the major publishers, all the major indies, recording associations, all kinds of different societies.
And we take as much of it as we can, and we put it all together, and we clean it. Because it wouldn’t surprise you that, you know, some rights holders have information X about one recording, and a different right holder has information Y about the same recording. And so there’s ways that we can kind of resolve those conflicts, and that’s the real value of the database.
So, in some instances, we then sell that information back to the industry. But to be clear, we don’t process royalties ourselves. Although, we are trying to play more of a role in helping the folks who do service royalties do a more accurate job because when they do their job better, everyone wins. What we’ve added on more recently is Vampr, which is a social, professional network for people who play in the sort of music ecosystem, and then vinyl.com.
And I can see how an outsider might go, “I don’t see how those things connect.” But our job fundamentally, or the mission statement, is to help creators get paid. And a big part of that, if you look at the sort of flywheel, is they’ve gotta start by building a network. Without a network, you probably don’t get to the first show. You probably don’t get to your first completed production, certainly not your first release to shops and everything.
So, Vampr is about that first crucial step or crucial steps. Jaxsta is then about kind of sorting out your metadata presence online so that you know that the information’s flowing correctly between all the various complicated participants in the music ecosystem. And then finally, vinyl.com is an e-commerce place to sell official records that are chart-accredited so that you’re, you know, getting paid and connecting with your fans and the beneficiary of that long journey.
Stuart: Right. You were the man who created Vampr with your partners a few years ago. You’ve grown it into… It’s been described as the LinkedIn basically of creatives. So, basically, you turned that business into a success, then vented that into Jaxsta, which already had vinyl.com. Talk to us about your background before you got involved in Jaxsta.
Josh: Yeah, so Vampr was built in response to my time as a musician. So, I had a pretty decent run as a musician from sort of the late 2000s, early 2010s. And we did the Australian thing, so Triple J, lots of tours, you know, radio, TV appearances, all that kind of stuff. And it was great in Australia, but when I wanted to scale that in London, which is where I’m actually originally from, and just, it’s a larger market, too, frankly. When I wanted…
Stuart: No one in London knew who you were, basically.
Josh: Yeah, well, I had to start from scratch. And the starting from scratch bit is the expensive part. Like, building up the network, and finding your first manager, and finding a radio plugger that you trust or even a publisher, all of those things take years. And in expensive cities like London, Los Angeles, New York, Berlin, Melbourne, Sydney, any of those cities, it costs a lot of time to be sitting around twiddling your thumbs while hoping that you’d run into those people.
And so, at the time that I came up with the idea for Vampr, there wasn’t really a technological solution for meeting folks like that. That was sort of 2015-ish, and it was the heyday of the large social network. So, you know, Facebook and the Twitters and the what have you. But niche networks were only just beginning to emerge, dating apps had only just hit the scene.
So, this concept of a niche network to help you solve specific problems was quite new. And I’m not a coder, I mean, I can code HTML, but I’m not, like, a web coder. Sorry, a mobile coder, I mean. But I have a mechanical enough brain that I kind of had an idea of what those foundational building blocks would need to be in order to launch a service like that.
And I certainly had a background in marketing. I’d done a marketing degree in business. And so I think I had enough of the fundamental pieces in addition to running my own labels and publishing companies for nearly a decade. I had an idea of what it would take to start a business like that. So, yeah, it was my first tech startup, but sort of my third time in business, if you will.
Stuart: Look, I’ve met a lot of rock stars in business, but you are a real-life rockstar in business. This is amazing.
Josh: Yeah, I think the weirdest moment was I was doing a tour with Keith Urban, and I was standing on stage in front of about 15,000 people. And I just sung the last note of the last song, and Vampr had just received a little bit of investment. And it occurred to me, I probably need to make a choice tonight, which path I’m going, because I can’t really manage people’s money responsibly, you know, and build this startup if I’m also gonna be out there and building my artist career.
And so I made the only logical choice, which is you got to do right by the people who have just cut you a check. And it was emotional, you know, but it was an experience that not many people will ever have.
Stuart: Right. Fast forward in time. Obviously, you had a successful exit of Vampr into the Jaxsta vehicle. And you’re now getting ready to take that to the next level. Helped in large measure by the US Congress, who’ve just modernized the copyright scene for music through an important act in 2018. Talk to me about how the environment is perfect for what you do.
Josh: Well, it’s made it easier for collection of additional royalties that were previously not being collected. And for any new collection society that was gonna be starting up now, in light of new laws or just in light of some territories that never had PROs or CMOs before. Anyone starting up now, Jaxsta would be a perfect partner in terms of some initial core data.
Stuart: Right, vinyl.com’s got everyone surprised. Or is it just the emergence of vinyl as a thing? And you’ve created one of the largest portals to go looking for vinyl records for us at fishing artists who like vinyl. Talk to us about the market opportunity there.
Josh: Yeah, we just kind of see it as a digital cratedigger’s dream. And we are providing more access than most vinyl websites. And we do that through a partnership with, you know, various wholesalers in different territories. So it’s very much a store at the moment, but over time, you can see how there’s an opportunity for it to become a marketplace, too, and something even bigger. But as an industry, it’s the only form of music that’s sort of been growing consistently year over year for, like, the last decade.
And whilst an element of that could be a trend, there is undoubtedly something that’s been lost in the streaming era when it comes to holding and owning the art that you love. And that’s the physical experience. There’s something like 51% of people who are buying vinyl records don’t even own a player. So we know that that’s not even a barrier to entry there.
And it also provides the opportunity to do really interesting things like offer to frame vinyls and really turn them into, like, meaningful gifts from one family member to another person and what have you. Just a real e-commerce opportunity there, which we are looking to build on with additional collectibles.
So we’re still working on the roadmap there, but we’ve indicated pretty much from the outset that we see vinyl records as stage 1 in the largest storefront that just offers fans the ultimate sort of collectible experience. And that’s the vision that we’re pursuing,
Stuart: Right So, three important platforms now together in one company, and a new CEO in the form of Josh Simons to build it. You’ve also got some important backers. You’ve recently raised some capital to take Jaxsta to the next stage, and Mr. Richard White showed up, the man who created WiseTech. And he probably has a high net worth, slightly higher than yours, Josh, I suspect. What attracted Richard White to invest?
Josh: Yeah, I approached him about Vampr, maybe five years ago, and he… At the time, Vampa was a fairly…it was growing in popularity, and it was somewhat well known in the music space. But we hadn’t worked out how to make any money. And I think back then, too, that was a strategy of a lot of tech startups, too, was like…
Stuart: Just build it and then figure it out, right?
Josh: Figure it out. And he sort of had the discipline back then to say, “Figure out your model and then come back.” And I said okay. It was almost like homework. But we stayed in touch. We stayed in touch over email throughout the years, and every time Vampr did a funding round, I’d keep him posted and what have you. And I think he was just generally impressed with my commitment, first and foremost.
And then when we did pull off the sale to Jaxsta and, you know, a few changes were made, I think he was ready to finally pull the trigger and say, “We’ve known each other long enough now. I love music, you love music. Let’s do this.” And we went from there.
Stuart: Okay. So you’ve got a bit of money to play with. What’s the growth plan for the next 12 months for Jaxsta?
Josh: You’ll see us lean into the vinyl piece the most. In the background, we’re doing really important stuff to integrate Jaxsta and Vampr. So right now, this sort of probably looks like a house of brands from someone on the outside looking in, but we will simplify that over time.
But before we can do that, it means some fundamental core backend stuff to link all these services so that they’re speaking to each other and benefiting from the very different types of metadata that we’re collecting across the three platforms. But from a frontend experience and from a public perspective, I think you’ll just see us expand the vinyl.com store, like I said, with additional forms of collectibles beyond just the vinyl records. So, that is a big focus of the next 12 months.
Stuart: Okay. Josh Simons, well done on what you’ve managed to achieve in terms of bringing together this interesting new platform. In terms of why investors should pay attention right now, what’s your 32nd pitch in terms of how to make money out of this opportunity?
Josh: Yeah. Companies of our size, you might call it a micro-cap tech stock, can really grow in one or two ways. You know, there’s organic growth, which, of course, everyone’s always looking towards. And then there’s growth through mergers and acquisitions. And I would suggest that we are doing a great job on both fronts, but I can’t say much more than that. That’s my pitch.
Stuart: Okay. Let’s close this interview. A lot of people will be curious about your guitar collection to your right, the viewers left. What’s your favorite instrument out of all those?
Josh: The one that’s the most colorful that you see at the end there.
Stuart: Okay. And in terms of the autographs on the white one there, any one the viewers would recognize?
Josh: My mom’s. No, those are all my fans on the last headline tour that my band did in… I can’t remember, I think it might’ve been 2015. But the look for that album was everything was off-white. So we had this sort of creamy color in the backgrounds on the screens and everywhere.
And the guitar started the same And then I think we got about two shows in, and we thought, “Everything’s looking how we wanted, but it’s a little bit clean. Let’s dirty this up.” And so, at the end of each show, we invited fans on stage to sign various things, and by the end of the tour, there was just signatures everywhere.
Stuart: Well, Josh Simons, thanks for joining “Stocks Down Under.” Good luck on the next stage of the journey for Jaxsta. And keep us posted about how things go.
Josh: Thank you, sir.