Entrepreneurship in Music Series: 001
The Cardboardbox Project
Co-founders Aaron Seligman & Jonathan Achtman
The Cardboardbox Project is a direct-to-consumer merchandiser who has eeked out a niche in both online and at-show sales for artists like Arcade Fire, Sigur Rós, Stars, Alexisonfire, Half Moon Run, The National, the list goes on. They operate out of a small warehouse space in the Mile-Ex district in Montréal and have been around since 2007. We spoke briefly with them to see exactly what makes their business tick!
What does The Cardboardbox Project do?
Essentially what we are is a turnkey solution for what we like to call “career artists,” artists that have been working on their careers long enough to sustain themselves. We help manage and facilitate the merchandise sector of their business.
That ranges all over the place, from producing goods for their tour to managing their online e-commerce platform, we can design and produce their goods by working with local and international manufacturers, and facilitate the sale both online and at shows.
How do you work alongside your artists?
We work with any band that’s headlining shows and festivals and selling thousands of tickets, and at the beginning of their album campaign we work on a product assortment that will be sold online and at shows, designing and producing their range of products, making sure the final result is to their specifications.
If they tour, we will deal with the sales at their shows, the logistics of shipping goods to wherever they are needed and we’re touring with the bands unless they have a road merch person and organizing those numbers in-house (the counting-in and out and calculating settlements). Then there’s the online aspect, pre-sale campaigns and bundles, limited edition products. What separates us is that we work in a very brick-and-mortar sector, you know, t-shirts, but we’re also investing heavily in the data-tracking, management, and projections for our clients’ e-commerce information.
Isn’t this partly the label’s responsibility?
In our case, we partner directly with the artist to sell directly to the consumer, their fans. As artists gain more and more control of their business, and — these are the primary artists we work with — they are retaining more of their rights and property, they want to control and steer more of what is being released directly to their fans. They want to be hands-on as well, it’s their creative vision. Since we’re already managing their online store, from a technical perspective, and since we already have a level of trust with most of the artists we work with, they lean on us to help curate and facilitate that process.
Is it undercutting the label? Not really, in most cases the amount that the artist is going to sell directly to their fans is very small (in terms of albums, and special edition products) compared to what the label will sell via distribution, so often it’s a mutual understanding between the artist and their label the types of business channels that they are each trying to cultivate. Some artists only use their label for distribution, some have a more complex merchandising agreement set up. The artists we work with have retained a huge part of their records and how they’re distributed, these aren’t 360° deals.
You’re kind of like a merchandise label for these artists.
I wouldn’t use the word label, since we don’t own any of this property, we’re a service provider. We manage that business on behalf of the artist, and it’s “their” business, not ours.
CBP doesn’t have its own storefront. Why is that?
Our philosophy is that it’s the band’s brand that is being promoted, so we don’t want people to know that it’s us who is making the stuff, managing, picking and packing, and dispatching the individual product. We’re behind the scenes. Our website is a portfolio. And anyway, merchandise companies aren’t very glamorous, people are usually more interested in the labels or management teams, since they’re closer to the artists.
How did you land Sigur Rós as a client?
Sigur Rós has the same business management as Arcade Fire, they work with a lot of the same service-providers across their different needs. And I guess at some point, they weren’t happy with their merchandise people, so they looked outside and asked “who is Arcade Fire using?” and found Vincent Morisset, who managed the Arcade Fire’s website, shot video for them and designed a lot of their imagery. Sigur Rós collaborated with Vincent on a film and he put their management in touch with us. A few further recommendations came out of that as well.
We’re a small company, resource-wise, all we really need at a time is one or two album launches to keep us afloat. There are occasions where there’s a drop, and we need to seek out new business but we’re not showing up to festivals and handing out business cards, we base our relationships on very personal connections.
How much of your team are musicians?
Well, we have an “office band”! I think everyone, well maybe except for Mason, he’s a DJ, “Mason, do you play music?” (in a faraway corner of the office, he responds, “once upon a time.”) Well okay, most of us, we’re all music lovers! It’s not like a prerequisite for the job, but if you’re willing to be surrounded by t-shirts and vinyl all day you’re probably a music lover.
When we started this company, Jonathan was sort of this music lover itching to build his product out and help the industry, I ended up here by destiny (-AS).
You came on from the ground, and saw a need in the industry.
The real satisfaction for me, and how I got involved and stayed involved, is to help people build their careers and reach their fans. I’m not a music junkie or anything, I’m obsessed with sports.
What if the Toronto Raptors approached you guys to do their merchandising?
Well, that’s the dream! Haha.
The best for us is to get involved collaboratively with album artwork, or packaging design, we’re at the seed level and helping to faciliate a vision, we’re collaboratively involved as part of the team and it’s really satisfying. The best projects are when the communications back and forth are very constructive and positive and the results are satisfying for everyone!
We’re trying to get better at identifying warning signs of a bad relationship before we take on a client or project. But we don’t always see it coming…
Well there’s a number of technology companies. AtVenu for example, basically created an app that allows a touring band, from someone who sells 5 t-shirts to Keith Urban, to manage the sales of their stuff. And it’s available to anybody. In our case, we’re providing a managed service and we’ve built our machine, our back end, and customize the front end for each of our clients. So they’re very different products.
People look at merchandising now in a very different way than before the so-called “collapse” of the music industry, it’s like, “hey there’s a revenue stream here and it needs to be protected”. The one thing that has kind of hurt the merchandising industry is coming from how music is kind of devalued these days, the only way to make money is live touring, but there’s a huge saturation of bands constantly touring out there. That competition is in some ways good for us, but in some ways complicated, people don’t have enough money to spend on t-shirts.
We’ve seen the “per-heads”, the sales metric for sales per ticket sold, drop in the 7 years we’ve been doing this, but the concerts per year goes up.
Are you saving artists from having to deal with merchandise manufacturers?
We find that artists want to be very hands-on about their merchandise, and be involved in the decision making, but that’s why it’s so important that the interface with their merchandise rep is relatable, we can guide them through that process and have a conversation. A lot of artists do actually want to spend lots of time deciding what type of blank shirt is right for their designs, what fabric, color and cut. But yeah, they need to feel comfortable having those types of interactions.