With New Spotify Partnership, Can Annotation Website Genius Finally Take on the World?
On a cold Friday in the Brooklyn neighborhood of Gowanus, the Genius offices are packed with hundreds of journalists and industry friends as rapper Fabolous rips through a set of hits. Co-founders Tom Lehman and Ilan Zechory, both 32, and their staff are celebrating the company's new partnership with Spotify and the unveiling of its new Fact Tracks initiative, which offers explanations and anecdotes of a song's lyrics as it streams within Spotify -- Genius' first attempt at bringing its lyric-annotations directly to where fans listen to music.
It's Genius' biggest product launch to date, and the most significant step yet toward the company's stated goal of "annotating the world," using its lyrics archive of 2 million songs and 4 million annotations. Even President Barack Obama is a believer: His Jan. 12 State of the Union speech was annotated by staffers on the White House's website using the Genius Web Annotator, launched last year, adding clarifications, .gifs and policy points to expand on the president's words.
"[It's] a watershed moment," says Ben Gross, 32, the company's director of business development and general counsel, of the new products' ability to "distribute Genius beyond Genius." "We've made practical headway on projects we've been talking about for years."
Not long ago, Lehman, Zechory and third co-founder Mahbod Moghadam, 33, seemed to be running Genius into the ground. After launching as Rap Genius in late 2009, the three secured $15 million in an initial funding round led by Andreessen Horowitz in October 2012, with partner Ben Horowitz, who envisioned an expansion beyond rap lyrics to bring layers of explication to the Internet as a whole. But a series of high-profile public gaffes -- in an interview and on Twitter, respectively, Moghadam told Mark Zuckerberg and Warren Buffett to "suck my dick," for example -- gave the founders an irreverent, frat-bro reputation that culminated in Moghadam resigning from Genius in May 2014 after backlash to his annotation of Santa Barbara mass shooter Elliot Rodger's manifesto.
Lehman and Zechory refocused, and in July 2014, eight months after the National Music Publishers' Association issued a takedown notice for hosting lyrics without permission, Genius secured a licensing deal with Warner/Chappell Music, the last piece in the publishing puzzle after earlier deals with Sony/ATV, Universal Music Publishing Group and the NMPA's stable of 3,000 publishers. Soon after, the company raised $40 million in a funding round led by Quicken Loans founder and Cleveland Cavaliers owner Dan Gilbert. Nas, Pharrell Williams and most recently Eminem are also investors.
"Lyrics are becoming a significant income stream for songwriters, whereas in the past they were mostly given away," says NMPA president/CEO David Israelite. "It's one of the reasons why NMPA is becoming more aggressive about taking down illegal lyric sites; we want to make sure that those that are doing it legally have a fair marketplace."
Genius' reach is impressive, with the site's traffic surpassing 45 million monthly unique visitors in January and reaching 3 million registered accounts, while its core of around 300,000 active users take on community roles such as moderators, editors and contributors to streamline and improve the data. It also boasts more than 10,000 verified accounts -- artists and authors ranging from Diplo to Nas to Selena Gomez annotate their words themselves, an operation overseen by a growing editorial and artist relations team that has recruited writers and editors from The New Yorker, MTV, Complex and Vibe in the past year. But as Genius expands beyond its own borders, it faces new challenges in engaging a more mainstream audience. "Lyrics evoke an emotional bond, and that's what every brand marketer is looking to do," says Crossfade Partners founder Jon Vanhala. "There's a lot of opportunity, but it will be interesting to see: Do people want this?"
Indeed, the company has yet to turn a profit. It doesn't sell ads, and Zechory admits Genius is still building its revenue operation with the expectation that further integrations will pave the road to profitability. "We don't want to just slap the traditional web display ads that you see on other lyric sites," says Zechory. "Having brands pay for really cool content and support new features -- I think we can do it in a really thoughtful way." To do that, the company isn't stopping at its Spotify deal; it's partnered with publishers like The Washington Post and MSNBC to annotate news articles with the Genius Web Annotator on their own sites, while Zechory hints at negotiations with branding partners outside the music-specific realm for potential activations, sponsorships and integrations. Sources tell Billboard the company has had talks with Apple Music, Coca-Cola, SoundCloud and YouTube, although Genius declined to comment.
Still, it remains to be seen how successful Genius will be in its forays outside its own borders; the company is still tinkering with its Spotify integration and while the Web Annotator has been used to layer context on 115,000 web pages since its Beta launch last April, Lehman concedes it's something they're trying to tweak to have it "make sense in terms of people's everyday experience of the web." But its investors are optimistic about the future. "Lyrics are just the tip of the iceberg," Gilbert says. "You're seeing the broader scope of Genius' capabilities."
"The big goal is to take Genius and put it at your fingertips wherever you experience music," says Lehman. "But even more broadly, wherever you experience art or culture or media."
This article originally appeared in the Feb. 13 issue of Billboard.