Business Matters: If Big Radio Had Pandora's Royalty Rate, It Would Owe Billions
Business Matters: If Big Radio Had Pandora's Royalty Rate, It Would Owe Billions

That Seth Goldstein is aiming his new startup, the content and advertising-driven DJZ at the growing electronic dance music (EDM) scene is not a surprise. Goldstein is chairman at, the DJ-minded music service that shot to fame in 2011 but has since lost much of its momentum.

What's unusual is Goldstein has raised money from a host of venture capital firms more apt to bet on technology companies (read: not content companies) that disrupt markets and deliver huge payoffs. Index Ventures, True Ventures and Google Ventures, as well as Viacom vice chair Shari Redstone and Troy Carter, have put $1 million into DJZ, which will launch Oct. 31.

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"We don't usually invest in content companies," admits Danny Rimer at Index Ventures. He notes that Index has passed on similar companies such as Maker Studios, the Los Angeles-based developer of YouTube content, and video games companies. "But that being said," he adds," it does feel like this is an incredible, sort of generational phenomenon that does not have an outlet."

The overlap of live events and music could benefit Index Ventures one day. Index has invested in Viagogo, basically the European equivalent of Stubhub, as well as concert listing service Songkick. Rimer admits these are very early days but synergies between an EDM site and others concert sites could be achievable.

Index has invested in numerous digital music companies over the years:, the predecessor to Rhapsody;, which was acquired by CBS in 2007 for $280 million; and more recently music storage service SoundCloud. Its portfolio also includes cloud-based storage service Dropbox, ecommerce site Etsy and Facebook.

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Goldstein simply sees an opportunity. He thinks the dance music market is too fractured and that an average kid looking for music, videos and editorial doesn't have a single place to go. "There's no easy way to access high-quality content across multiple devices," Goldstein tells

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Others see opportunity in dance music, too. Robert F.X. Sillerman has acquired dance promoters Donnie Disco and Dayglow Productions this year. Live Nation acquired Cream Holdings LTD in May and Gary Richards' HARD Events in June.

The DJZ approach will be editorial aimed at a broad market and delivered fans' device of choice. The design is aimed at "Generation Z" with bright colors and a cartoonish design that Goldstein says has got positive feedback in the dance community. Because the younger generation is so fluid with Internet access, DJZ will focus on both the web and mobile apps. Goldstein says the DJZs iPhone app "will focus on enabling people to share and mix their own music."

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There's a potential payoff here for artists. Goldstein says Silicon Valley's strength is its ability to consolidate content and improve scale. "Given the size of the audience that is coming online for these kinds of experiences, it's only a matter of time before some of the large brand marketers like the car companies and the [consumer packaged goods] companies recognize how big and how engaged this audience is and decide to commit there - but only commit where they can achieve scale solutions."

To that end, DJZ has secured one person on its advisory board who's well suited to help a young company eager to attract top sponsors and advertisers: Vevo CEO Rio Caraeff. Superstar DJ Paul Oakenfold and DJ Shadow are also advisors.

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