Industry Profile: Milun Tesovic
By Larry LeBlanc
This week in the hot seat with Larry LeBlanc: Milun Tesovic
There are few success stories as sweet as Milun Tesovic, co-founder and chief technology officer of MetroLeap Media, based in Burnaby, British Columbia.
Born in Sarajevo, Bosnia and Herzegovina, and after being caught in the Serbsí blockade of the city with a siege force of 18,000, Tesovic came to Canada with his family in 1994.
Today, with CEO Alan Juristovski, Tesovic, 24, runs MetroLeap Media. Their flagship product, the lyrics website MetroLyrics.com, is the 3rd largest music site in the world, behind MySpace Music and Yahoo! Music.
Tesovic is also a full-time student at Simon Fraser University in Burnaby, studying for his MBA, which he will complete in early 2010.
Since the downturn of physical music sales, major publishers have increasingly focused on boosting the value of their catalogs, including putting lyrics onto clothing, toys, greeting cards and other merchandise.
Meanwhile, to their consternation, hundreds of thousands of internet sites offer unlicensed lyrics. Whenever a popular songís lyrics are entered into a Google search, thousands of separate sites are typically returned offering lyrics.
But publishers and songwriters are rarely compensated.
MetroLyrics.com, however, provides a database of over 500,000 licensed song lyrics from more than 16,000 artists through its partnership with Gracenote. The site reaches more than 33 million unique monthly visitors, receiving 100 million monthly page views, and is the exclusive lyrics provider to AOL Music and its array of music properties.
Click on MetroLyrics.com, and you find the entire lyrics of songs, as well as artist and background information. The site is free to users and operates on ad revenue.
With only a staff of 9, MetroLeap has been profitable since being launched 5 years ago. Its advisory board includes former MySpace Music senior VP Jamie Kantrowitz, former Yahoo! Canada GM Kerry Munro, and New York-based entrepreneur Charles Seely.
Tesovic came up with the idea of MetroLyrics.com when he was 16. At the time, he owned his own Internet hosting business. After analyzing the most popular destinations on the internet, he discovered that lyrics were being poorly represented.
There were countless websites offering lyrics but they were unauthorized (song lyrics are copyrighted, and can be legally viewed only on websites with permission from music publishers), and the lyrics were often inaccurate.
Developing a script with his own code, Tesovic started a database of lyrics. In 2002, he sold his hosting business and began focusing on MetroLeap with Juristovski, a family acquaintance who had been working as a VP for a construction company. Juristovski holds a Bachelor of Applied Science in Engineering and a Masters of Business Administration,
While originally lacking the necessary agreements with publishers to make their venture a legitimate service, the partners felt that only a legalized business model would be sustainable
MetroLyrics became the first lyrics-dedicated website to provide legal, licensed song lyrics, while compensating artists and songwriters when they signed with Gracenote to license its catalog of lyrics in Dec. 2007.
Key to the deal was the revenue-sharing model, which has allowed MetroLyrics to grow, while at the same time monetizing lyrics for copyright holders.
Gracenote, a wholly owned subsidiary of Sony Corporation of America, serves as an intermediary, directing royalties back to publishers. Each time a Metrolyrics.com visitor views a lyric; MetroLeap pays Gracenote to pay royalties to song rights holders.
Gracenote has license agreements with all four major publishers: EMI, Universal/BMG, Sony/ATV, and Warner/Chappell as well as agreements with dozens of leading independent music publishers including ABKCO Music, Inc., Cherry Lane, Chrysalis Music Group, Disney Music Publishing, Peermusic and Bug/Windswept Holdings; and hundreds of agreements for major songwriter repertoires.
In 2008, in response to the rapidly growing use of mobile devices to access digital media, MetroLyrics and Gracenote extended its licensing agreement to mobile devices and iPhone applications via a WAP portal. As a result Gracenoteís Lyrics service, is available to mobile consumers through MetroLyricsí WAP portal at m.metrolyrics.com.
As an integrated content partner for AOL Music, MetroLyrics provides song lyrics via a "Lyrics" link on AOL and its properties. Music fans also have the ability to access artist-specific lyrics pages from the navigation bars within the AOL Music properties. For example, when watching AOL Sessions performances, customers can click the lyrics link and be directed to MetroLyrics.com to see the lyrics for those songs.
MetroLeap Media and its founders recently received recognition as a 2009 Ernst & Young Entrepreneur of the Year Award finalist in the technology and media category. The winner will represent the region at the national banquet on November 24 (2009) in Vancouver.
How do you view the music industry?
The music industry, as far as Iím concerned, is re-modeling itself. There are so many opportunities to make money and to make it a better industry overall.
I read a report that estimated MetroLeap Media to be worth $5.14 million.
Thatís a matter of opinion. It varies with a lot of different factors.
The report also estimated weekly ad revenue at $7,000
Thatís very low. It is considerably higher.
You now have an office.
We have an office now. We had been working from our homes until this past February (2009). Then we got an office. It has been a bit of an eye opener (having an office). Things got a bit more serious. (The company) has much more of a business type feeling to it now.
You arenít going to go corporate.
I hope not.
Before the move, you had 5 employees.
We now have 9 employees.
There are many sites on the internet that offer lyrics.
One big difference is that weíre legal. I donít know how many of our users know this but going to (some of the other sites) and going to MetroLyrics.com is the difference of helping their (favorite) artists out (while not) even spending a dollar.
We pay all of the licenses for our users and provide the service for free. So when visitors come to our website, they are indirectly contributing to the (songwriters).
Now, other than (being legal), we are very active in making sure that we have all of the latest songs and all of the latest albums as well as putting up products that we think that our users will like. An example of that is the lyric scrolling widget that users can take with them onto their MySpace profile page or onto their Facebook page to get closer to the lyrics and the artists that they love.
How many songs are available on the website?
There are about 500,000 songs that are neatly cataloged. We started with, I believe, 200,000 lyrics but the database was extremely messy. There were a lot of duplications. There were misspelled lyrics. it took a good couple of years to bring it up to 500,000 songs.
How many artists are represented?
There are about 15,000 artists now. When we started, it was about 6,000 or 7,000 artists.
MetroLyrics.com is the #1 lyrics website in the world. Is it still growing?
As we are now starting to make a difference in the industry, and now that we are putting out all of these great products for our users, we are seeing more people coming to the website directly as well as through partners, like AOL. The same will happen with Billboard.
You just made a deal with Billboard.
We are just going through the design process and the integration. We will be done probably within a month. (Lyrics) will be on the Billboard.com site as well as on MetroLyrics.com site.
The majority of users on the site are from the United States.
Our total traffic is 35 million unique visitors a month. Just a bit over half of that is from the U.S. with Canada and the U.K. following with about 10% each.
Why so much traffic from America?
Thatís a very good question and a tough question to answer at the same time. Personally, I believe that Americans are much more tied to music. Of course, the big thing is the (size of the) population there too. But, I do feel that North Americans are more attached to music.
When you are that attached to music, you really care about what people are singing and saying in songs. In our (user) comments, you will quite often see debates about what the artist is trying to say (in a lyric). If you look at those members, the majority of them are from the United States.
A factor of having a lower international presence may also be the lack of non-English songs by artists overseas.
That is something that we have thought about. We are still thinking about expanding our website into other languages. We are going to start adding more Spanish songs in our data base. Thatís probably our next big step.
You are based in Canada and thereís no French language repertoire?
I have heard that (remark) before. Neither Alan nor I speak French. We do have one employee that does. We would need to invest a lot more resources in terms of making sure that we have someone who is knowledgeable in French music and making sure we include everybody that is relevant. We are far from being a mature company in terms of ideas and projects. We still have a long way to go.
[Meanwhile, the International Confederation of Music Publishers (ICMP/CIEM) announced plans earlier this year to build a French lyric database for a business-to-business web site that would facilitate lyric licensing in the online world.]
You were the first web-based lyric service to pay publishing rights. Did the publishing companies go after you? Or did you refrain from using songs controlled by the larger publishers?
Nobody has ever gone after us. From day one, we made it our goal to make this a proper market and a proper business to run. It was us who made the push to go forward (as a legal site). Even today, most of the websites that were competing against us back when we started are still operating illegally. Iím not sure whether or not anyone is going after them or not.
How do you deal with licensing rights?
Gracenote takes care of all of the licensing and the negotiations with the publishers. It is just up to us to make sure that we follow through on any take-down requests for any songs that the publisher may not to display and to make sure that we have correct information when it comes to giving proper credit to the songwriter as well as the publishers and the labels involved with the song. We donít do any streaming or broadcasting so that made (the licensing) process that much simpler.
The photos on the site are copyrightable.
With photos, we have agreements with (digital media provider) Getty Images. We license all of the photos used on the site from them.
You had the idea for MusicLyrics when you were 16?
Programming is something that I have been doing since I was 14 years old. When I was 16, I was a bit ambitious. I wanted to find out how I could work on the Internet and makeónot necessarily a big difference because I never expected thisóbut how I could have some Influence on the Internet. Analyzing the market, (I realized that) lyrics were one of the top searches on Google. I believe, (lyrics) were then either the second or the third most popular term being searched for.
Looking through all of the different players in the (lyrics) market, I saw that it was a highly neglected field. Players were doing a very poor job. There were no updates on the websites. It just seemed that they were content making money and hoping that nothing would really change.
On top of that, there were no efforts being made by either the publishers or the lyric websites to make this a legitimate business. So we started slowly building our database, cleaning it up and making sure that it was accurate. We set out with a goal to keep growing (our service) but at the same time, to make a product out of this that could benefit the music industry.
At the same time, you are still attending university.
I am. Next semester I will be graduating. My major is business. I spend three or four days a week at school. I have to work longer nights and I have to make sure I work efficiently
Why is schooling so important to you?
I find that education is very important (in life). Nothing (you can put) on paper or anything put on the business card. But you still do learn a few things every time you go there, especially when it comes to all of the business lingo. Itíd be tough for me to go talk to business people while Iím 24 years old with no education.
You are from Sarajevo. Education tends to be a priority with many immigrant families.
My family came to Canada in 1994, which was pretty much at the end of the war. We came with just the clothes on our back. We were right in the middle of the conflict. My dad was a pharmacist and a doctor. Both of my parents are very well educated. My dad went to school until he was 32. He started to take all the exams to become a pharmacist in Canada however due to so many exams and hoops you have to jump through after 4 years he gave up since there was no end in sight. My mother was a research scientist in Sarajevo and is also very highly educated. In Canada now, both work as building managers.
[After Bosnia and Herzegovina declared independence from Yugoslavia in 1992, the Serbs, whose strategic goal was to create a new Serbian state, encircled Sarajevo with a siege force. It is estimated that nearly 10,000 people were killed or went missing in the city, including over 1,500 children. By 1995, killings and forced migration had reduced the cityís population to 64% of its prewar size.]
What part of Vancouver did you grow up in?
I grew up downtown, originally (in the West End) on Comox Street right next to Stanley Park. Then (my family) moved over to Burnaby. Thatís where the company is now.
[According to a 2009 survey by Maclean's magazine, Burnaby, British Columbia is the best run city in Canada. It is hometown to singers Michael Bublť, Matthew Good, and actor Michael J. Fox.]
Vancouver has always had a great music scene.
Vancouver is a very diverse city. You will find all different sorts of music, clubs and bars that play everything that you would pretty much like.
What kind of music did you like growing up?
Everything from country to rock to pop to classical. I donít really have any particular music preference. I try not to be biased. I enjoy all forms of music. My slight preference would be for punk. Also, I like mainstream rock. It is always interesting to find a music discovery. It is very easy to (only) get into the Top 100 songs. Even going onto iTunes, I will try and discover some of the more hidden songs.
Were you involved with music in elementary or high school?
I never quite got involved with music while in school. In elementary school, I was in the choir but it was nothing serious. I do appreciate talent and what artists and songwriters do, however. I tried the guitar, and I tried piano. As much as I tried I couldnít do (learn to play). Iím a keyboard and mouse kind of guy.
Your instrument is the computer?
Yeah. Iíve been a computer geek pretty much for as long as I can remember. My first computer was a 486. Thatís not as old as people usually say. I am both (MAC and PC). When it comes to work, I prefer my PC. When it comes to anything more personal, relaxing or just everyday surfing, I use my MAC.
You started off working on MetroLyrics at your family home.
Oh yeah. Of course. At 16, I did not move out.
You and Alan didnít form MetroLeap Media when you were 16?
No. We formed the company 6 years ago when I was 18. Iím 24 now. My parents were very supportive. They werenít always sure where or how I was making money on the internet.
Alan came from Serbia a bit before the war ended. We were family friends for many years before he had a look at what I was doing and saw much greater opportunity in it than I could ever imagine. From there we slowly built out a closer relationship and eventually formed a company around it.
Alan has been such a help with his business experience and background. At least, he was able to make my parents understand how it all works. As well, he was able to help overcome some of the challenges of forming a company at such a young age.
At one point did your parents figure you were doing okay?
Itís really tough to tell because any amount of money you make at 16 years old is pretty good. I think that my parents saw (the business) as a very good opportunity and as a career move when we incorporated. Thatís when they really started realizing the potential of the company.
When you started, how did you build a database of lyrics?
To start off with everything was user submitted. That helped us grow quite a bit. We have been receiving lyrics from small independents companies and indie band on a regular basis pretty well since the first year.
Were the major publishers supportive early on?
The major publishers didnít want to get involved. They didnít get involved for a couple of years until we were at a decent size. Nothing significant happened (with lyrics on the internet) until Gracenote struck a deal with Yahoo for lyrics three years ago. Then we struck a deal with Gracenote two years ago. They were really a driving force in aggregating all of the publishers, and getting everybody on the same page. Thereís only so much that Alan and I can do compared to what the guys at Gracenote could do. They were able to reach thousands of publishers and make this deal (with us) happen.
Was the site ad based at the beginning?
Yeah. We were ad based at startup, and we are still ad based now. (Advertising) was (initially) run through (online advertising companies) Google Adsense, Tribal Fusion, and Value Click. Today it is still powered primarily by those networks. However, we are trying to reach out to brands that care about music and who want to get in touch with our users.
Why an advertising strategy as opposed to a subscription?
We feared that itís really tough to monetize lyrics and offer it as a service where people would have to subscribe when there are so many free and illegal websites out there. So asking people to pay for something that is easily available on the Internet for free is a bit of challenge. But we have been profitable since day one. As long as that is the case, weíre quite happy. We have other business plans going into the future that might offer some premium subscription models but for the time being weíre happy with this model.
What models would be premium?
If it were premium, it wouldnít change (the basic concept of the business). We are still going to continue offering lyrics for free. But we will have other products there and maybe even possibly making it available for users to buy MP3s from our website or we will set up better partnerships in that area.
It is still early days for the company?
Yeah, weíre still a young company. We still have a lot of products and a lot of ideas coming through. We are far from being a mature company in terms of our products. We are striking a lot of good partnerships, a lot of good deals, and we are learning about the music scene as well as the internet.
What about the next year?
We have quite a few projects coming up. We are going to be expanding our music offering quite aggressively in terms of content and the breadth of artists that we cover. Personalization and social aspects are the two key themes going forward. So we can allow our users to interact with each other, share stories, share their passion and make the content relevant to them. Rather than (having them) go to a page and saying, ďHereís what we offer to you and everybody else at the same timeĒ we are going to try and make pages that say, ďThis is what we offering catered to your liking.Ē
The website has been recently re-designed.
Our old design was working for a lot of people but we thought that we could improve it. So we hired two great designers locally and with their help, we launched this new website about a month ago. The design focuses on the user experience. Itís still not done. What you are seeing is about a 40% done product. We are making a big push now toward the user experience, hoping that users get what they want easier and when they want it, as well as possibly, moving into more of a recommendation engine that can help indie and smaller bands who are doing great things to become more noticeable on the internet.
Are you re-tooling for the growing mobile market?
Mobile phones and hand-held iPods and iPhones are moving toward music. We recently launched our new mobile site m.metrolyrics.com that makes MetroLyrics available on all platforms.
Will you open up an in-house kiosk for music products?
That is one thing that we are considering. We just have to nail down what kind of items it would be. It is an area that we are not experienced in.
One of your partners is Jango internet radio.
We are trying to provide an overall music experience for the users. If (a feature) something that is out of reach for us, such as streaming, we try to partner up with other companies that can provide that to the user. We really want the user to get a full music experience when they come to our website whether it be from us or a seamless transition over to another partner. Jango is a partner but they are not our biggest partner. They do provide a service that a lot of our users do enjoy.
How does the relationship with Jango work?
It is a pretty straightforward relationship at the moment. We basically try to send our users to listen to the songs that they like through Jango. It is a service very similar to Pandora with a bit of a social twist on it. Jango tries to send users back to us who would like to read lyrics.
We try to make it a seamless process for the user and to provide them with the relative music experiences when they want it. So when they are on our lyric page, if they want to listen to similar songs, they can go to Jango. If they are on Jango and are listening to a specific song and they would like to see lyrics they can go back to us.
The site is designed to be a seamless process whatever a user is searching for.
Exactly, we are not able to offer everything from music, such as streaming or buying MP3s, so we try to set up partnerships so, instead of sending someone back to Google where they would have to do another search and then try to find another source.
The site is increasingly providing music-related news and information. There are even lists of the awards that artists have won.
One thing you canít find anywhere else on the internet is our awards database. (On our website) you can find the history of the different awards and who won what, who was nominated for an award, and what recordings won.
How do you get that information?
We have to do it manually. Itís a long and painful process but itís a very interesting service. We can tell you all of the different albums that artists have won awards for. What year and what category. As well as any songs the artist (provided support) on.
Are the user discussion forums growing in importance on the site?
That has been a feature for the past year. It one of the areas that we are going to be focusing on going forward. That is personalizing the content to the users as well as creating more social aspects and opportunities for the users to interact between each other and, possibly if the artist so wishes, for them to come onboard as well and even use (the website) as a promotional tool.
Has a label, publisher or artist hosted a CD release on the website yet?
So far, we havenít made a push for that yet. We still see a lot of room for improvements from our end before we want to offer something like that to the artists.
How does a publisher or songwriter get their lyrics placed on the site?
They would have to go through Gracenote to put their lyrics up. They would make royalties pretty much right way. But any pictures, biographies or news items that they would like to release, it is as simple as just contacting us. Weíd be more than happy to put it up.
Do you have direct contact with publishers?
We really donít have much contact. We are looking at setting up better relationships for some of the ideas that we have but we want to make sure that when we do approach publishers that we have products that impress them and are worth their while. We have had some contact with (publishers) and they are very open to talking. We just want to make sure that we are fully ready to take the new responsibility and take on the new projects when we do approach them.
Has your music collection become bigger since forming the company?
No but my iPod (content) has. I have to use a few iPods. I am pretty sure that I have half of the tunes on iTunes the way Iím going. At home, I have an external hard drive that make that backs it all up. If I was ever to lose my iPod, I donít know how long it would take me to grab these songs. It would be a nightmare. So I got quite religious about downloading.
Larry LeBlanc was the Canadian bureau chief of Billboard from 1991-2007 and Canadian editor of Record World from 1970-89. He was also a co-founder of the late Canadian music trade, The Record. He has been quoted on music industry issues in hundreds of publications including Time, Forbes, the London Times and the New York Times.