Superfans And Scarcity [WAAMN Chapter 3.4]
Superfans And Scarcity [WAAMN Chapter 3.4]
The music business took a long time to realize less can be more. Just ask Kim Kaupe, cofounder of a startup producing limited edition releases since 2011.
This is your weekly installment of my new book, We Are All Musicians Now. To make sure you don’t miss future serializations, subscribe here. Below you’ll find Chapter 3: Rise of the Superfan (Part 4). Enjoy!
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A CD jewel case and an issue of People magazine had a Frankenstein baby—that’s how entrepreneur Kim Kaupe described her startup when she began pitching record labels and music managers a decade ago.
“Their first reaction was, ‘Great, let’s make a million of them,’” she recalls. “We were like, ‘Oh, no, we don’t want to make a million of them … we want to make a really limited run.’ And, for a lot of people, that was super-confusing.”
These days, the idea strikes more of a chord: superfans want something special, and musicians need to service their superfans. In fact, every business needs to service its superfans.
The value of limited-edition releases should be clear, especially in this context—scarcity breeds demand, demand leads to increased prices, increased prices lead to bigger margins. That’s true even if the scarcity is intentionally contrived, as tends to be the case with NFTs.
But NFTs and even their precursors weren’t a thing back in 2011. That’s when Kaupe, fresh off a magazine job at Conde Nast, cofounded Zinepak with music maven Brittany Hodak (we’ll hear from her next week). The pair realized they could combine their complementing skillsets to create a genre of fan zine CD packages.
Sure enough, those items turned out to be appealing to collectible-hungry superfans and the musicians looking to delight them. Zinepak soon landed business from artists such as Taylor Swift and Toby Keith, clocking over $2.5 million in revenue in 2013.
“I'll never forget when Taylor came out with Red, we did a Red theme pack,” says Kaupe. “And, at the time, I want to say we made like 120,000 [units] … we probably could have made easily 180,000 and still been fine, but it added to the NFT-like collectible-ness of it.”
By 2014, the company’s sales had surged to $6 million, and Kaupe snagged a spot on the Forbes 30 Under 30 in the Music category (yours truly was the editor). She appeared on the list alongside acts like Katy Perry and Justin Bieber; it wasn’t long before both were Zinepak clients.
Booming business also led to a 2015 spot on Shark Tank—and an investment offer at one of the highest valuations in the show’s history. But Kaupe and Hodak walked away, preferring to keep bootstrapping their startup. Realizing the value of what they’d created, they changed the enterprise’s name to the Superfan Company.
“Everyone’s a superfan of something,” Kaupe explains. “Anytime someone tells me, ‘Well, I’m not a super fan of something,’ I ask them, ‘Is there a certain coffee you drink?’ Cause there are people that say, ‘Well, Starbucks is the best coffee’ or ‘My mom’s spaghetti is the best spaghetti’ or ‘I only fly Delta.’”
Some people were also superfans of the company’s new name. Kaupe soon found herself fending off a lawsuit from a patent lawyer who apparently decided to send cease-and-desist orders to anyone using the term. Working on behalf of a high school sports app developer with a similar name, the attorney placed a six-figure value on the moniker.
“The best call was me telling our lawyer, ‘You can tell those nasty pirate people that we changed the name of the company to Bright Ideas Only,’” says Kaupe. “[Our clients] know our work and they’re going to come back to us. And it doesn’t matter if we call ourselves Purple Monkey.”
The company’s name may be different now, but Kaupe remains focused on the superfan economy, one that’s gone through quite a few changes of late. In the early days of Covid-19, the music business took a long pause, leaving acts with a rare bit of free time. Kaupe quickly fielded requests to help bands bring some of the ideas they’d left on the back burner to life, what with touring and album releases on hold.
As things picked up again with the rollout of vaccines in 2020, acts began to release postponed albums, timing them to coincide with long-awaited touring schedules. Kaupe picked up corporate clients and budding stars alike: everyone from Live Nation to singer Karol G to comedian Bianca Del Rio.
In the coming months, Kaupe will be closing the loop between the sort of products her company started out making and the modern-day digital equivalent. She’s teaming up with a visual artist to produce a set of NFTs—complete with a corresponding batch of physical works.
“It's taken a solid ten years for people to actually understand why limited-edition stock is important,” says Kaupe. “And it’s taken many iterations. But I feel like they finally are like, ‘Yeah, we get it: superfans.’”
The above is a serialized segment of my new book, We Are All Musicians Now. You just read Chapter 3: Rise of the Superfan (Part 4). Subscribe here. For more, read my other books and follow me on Twitter and Instagram.
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ALSO BY ZACK O’MALLEY GREENBURG
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Michael Jackson, Inc.: The Rise, Fall & Rebirth of a Billion-Dollar Empire