Entrepreneur nears dream of building ‘a digital MTV’

Elizabeth Vargas grew up wanting her MTV.

She wasn’t seeking money for nothing, like Dire Straits’ Mark Knopfler. She wanted to own MTV.

Now, as founder and CEO of Edge Music Network, the part-time Indio resident has what some are saying is the next best thing.

Her company last month announced the launch of an app for a music platform that — according to a company press release — “makes it easier than ever for users to discover and stream the latest concerts, events and music videos of the highest quality.” A website with channels featuring music videos and documentaries of pop, classic, cutting edge and emerging musical artists is due to drop next month.

The free app, being offered for $9.99 without ads, is being promoted by the likes of advisory board members Roger Daltrey of The Who, Steven Tyler of Aerosmith, Roger Taylor of Queen, Mark Turner of X-Box, John Paul DeJoria of the Paul Mitchell Systems, and VH1 Classic founder Eric Sherman.

Vargas, who lives in a castle-like abode at the Madison Club across a fairway from music industry titan Irving Azoff, calls her network “a digital MTV.” And Sherman, former head of MTV Espanol, says that’s not just hyperbole.

“Let’s look back at what MTV was in its heyday,” Sherman said from his TNA Entertainment office in New York. “In its heyday, the demographic of 12 to 24 looked to MTV for the newest thing in music, in politics, in fashion, in lifestyle in general. Today, they go to services like Spotify and Snapchat and potentially a service like Edge. So, I think the analogy to being today’s MTV, it’s a very good analogy.”

Vargas is a bubbly personality who has been quietly exploring technologies for 10 years and securing millions of dollars in music copyrights for long- and short-form video for the past four-and-a-half years. She is married to Bernt Bodal, a part owner of the Rock ’n’ Roll Fantasy Camp and chairman and chief executive officer of American Seafoods Group. Goldenvoice President Paul Tollett, who has played golf with Bodal, says, “I think he is American sea food.”

Elizabeth Vargas, founder and CEO of the Edge Music Network, gets a hug from Roger Daltrey, lead singer of The Who and a member of her advisory board.

But Vargas began dreaming of this music platform long before she met Bodal 16 years ago in a Seattle jazz club.

“I was not allowed to watch TV until I was 13,” she said on a weekend retreat from her home office in Newport Beach. “My dad was a preacher. Very religious. So, when I moved to Washington state, I got to watch MTV for the first time. It had already been out for a while, but I was stoked. I saw it and said, ‘I want to own MTV.’ So, growing up, every decision I made was to figure out how to build MTV. Then I found it’s not for sale and if you buy a linear network, it’s $40 million!”

The promotion for the launch of Edge says the company is “on a mission to reinvent how music is heard, viewed and shared.” Sherman adds more soberly, “The music industry continues to revolutionize itself in digital space every day. The Edge is another component taking part in this movement.”

Like a video version of Pandora or Spotify, the Edge app and developing website allows users to create, manage and share custom playlists and enjoy channels of video and/or audio in genres such as indie, EDM, hip-hop, country or festivals. Like Qello, it offers concert streaming and concert film.

What distinguishes EMN is the vastness of its video library. In February 2015, Vargas licensed all the music from Universal Music Group, the world’s largest music publishing company.

“We have one of the largest classic rock libraries,” she said. “I had a deal with Eagle Rock (Entertainment, which owns the rights to concert and documentary films by the likes of the Rolling Stones, Paul McCartney, Pink Floyd and The Who) even before Universal. They were acquired by Universal during the time I was doing the acquisition. They bought up EMI Interscope, Def Jam Records. So went I went big. I went everybody.”

She’s negotiating for music rights with major publishers Warner Bros. and Sony. But she already has the rights to showcase the latest and past works of major artists, including Taylor Swift, who famously refused to let Spotify stream her new music.

“Do I think that’s significant?” asks Sherman. “It’s absolutely significant that one of the biggest-selling artists in the world is on Edge. Having the biggest artist on your platform when one of your biggest competitors doesn’t have that artist or piece of content is a huge advantage.”

Vargas’ deal with Universal made her believe she could realize her dream of owning a digital MTV.

“I said, ‘If I got a library and could attach that to a service, do it like video radio, then I could add in the (subscription) plan to be part of it. Then it will be a service they can utilize on their mobile or on a desktop, and they can second-screen it to their TVs. They can air-play it. I have an Apple TV app being launched and a website. We’ll multi-platform it, but it will be the same service all the way around.”

The Edge Music Network app features a choice of music channels.

She’s fully aware that millennials won’t want to pay a fee to sit around and watch videos.

“We said, ‘What’s going to attract a younger audience? They already can get videos on YouTube. YouTube Red (a monthly subscription service showing videos with no advertising) came out and is training millennials to pay. It’s not succeeding very well because no one wants to pay, but Spotify is doing an excellent job of it. I love Spotify. And I used to love Pandora, but they ended up not getting the rights to a lot of music.”

And not getting new music is a challenge, and “that’s our issue too, right now,” she said.

She’s finding ways to discover new music by hiring curators, especially from college campuses, to create compelling video songlists for the various Edge channels. She and her team also scout new music for her service and, when their videos become popular, they’re moved to the Featured Artist channel.

But more on that later.

Vargas came up with two ideas to attract younger music viewers. First, she “gamified” Edge by offering viewers points for watching and possibly “liking” videos with ads, and creating playlists, sharing them and subscribing to the premium service.

“We went to all the colleges and said, ‘What if we gave you points for watching videos, like you would on YouTube? Then you could take those points, if you earn enough of them, and trade them in for a festival pass, like a Coachella ticket or a Bonnaroo ticket.’ The kids loved it. They were very, very excited. So we built a very basic gamification system. You log in, you get 2,000 points. You watch a full video, you get 400 points. Watch half a video, you get 200 points. If you share, you get 200 points. Whatever you do in the background, you get these points. Then when you go to your profile, you see how many points you have and you give us your wish list. What do you want with these points? We know from colleges, they want festivals. But we’re just now getting users. Once we know what people want, I will go out and negotiate. Do they want guitars? Some people want Starbucks. But it’s working.”

The other thing Vargas did was create a charity element. One of the things that fascinated her with MTV was a promotion it did of a peace concert. So she has decided to give $1 of every $9.99 subscription to charity.

“I told my husband, if I could build a Pandora for music that would have a subscription model, I could take that subscription and put aside a percentage of it to go to a 501c3 charitable organization,” Vargas said. “I’m going to pick homeless veterans, feeding children in America and (support) after disasters. Everyone said, ‘You’re giving away a dollar of every subscriber?’ A dollar is a lot more than anyone (else, such as Amazon) is giving away. It’s what you’d be making as a technology owner. But it’s the DNA of the business. It’s like Toms Shoes. You subscribe to this music platform, you get rewarded by giving back.”

Elizabeth Vargas stands in front of the bandstand at her Madison Club home in Indio where she often hosts parties during the Coachella festival.

Vargas is excited about utilizing and combining technologies to develop a new market. She’s working with Xumo, the company that purchased MySpace, to include her digital channel with its technology merging cable and digital programming.

“When you plug in your cable box, you still get your cable channels,” she said. “But, as you’re scrolling down, you’re also getting Xumo digital channels. So, you’re getting CNN linear and the next channel down is Edge Music Channel, which is digital. They’re bringing all the old school television watchers into the digital world.

“As far as video, TVs are where it’s at. This (pointing to her cell phone) is your remote now. You can view it at the airport if you want to. But realistically you want to air-play it to your TV (via) Chromecast.”

If reinventing the way music is heard, viewed and shared at home seems like a tall order, Vargas says she knows there’s a market in nightclubs and sports bars.

Bars and nightclubs pay ASCAP and BMI flat fees for the right to use the recorded music they license for songwriters and publishers. But licenses for music videos have a different fee structure than live or audio recordings and Vargas believes there are hundreds of bar owners who aren’t paying their licenses in smaller markets that ASCAP and BMI have trouble monitoring.

“I’m fulfilling a need to businesses that need videos that are legal,” she said. “There are millions of bars. So, imagine if I have 5,000 bars paying $600 a year for full compliance. They get the latest videos every day. It’s fully streamed, HD, high quality, country, jazz, hip-hop, wherever they are for $600. It’s never been done before.”

Elizabeth Vargas poses with one of her Edge Music Network advisers, Steven Tyler of Aerosmith.

Vargas came by her aptitude for music and technology naturally. Her mother’s family are German engineers and she’s a singer who majored in jazz vocals at the Cornish College of the Arts in Seattle. She created the Vargas Girls Jazz Cabaret and played Seattle nightclubs and the Bumbershoot music, comedy, arts and culture festival. She met her future husband when he walked into a nightclub where they were performing and she sang “Hey Big Spender” to him.

But Vargas also was working a day job testing software for a company that did CT scans and exercising her entrepreneurial muscles by forming a chocolate company the made chocolate cigars for her Vargas Girls’ act. Being familiar with computer software, she purchased TheVargasGirls.com domain around the turn of the century and posted videos of her show on her website years before that was commonplace. She shut down the website after receiving a cease-and-desist from the Heart Corporation, which owned the rights to the Vargas Girl cartoon, but it launched her foray into online and then cable TV.

She eventually formed her own MySpace page and YouTube channels and did live streams and interviews with bands. She interviewed Daltrey, members of the Rolling Stones and Nick Mason of Pink Floyd while dreaming of how to reach a bigger audience like MTV. Now she feels she has the platform to achieve her dream.

“If I had known how much real work this was going to take… I still would have started it!” she laughs. “I think technology has made it easier for me, but difficult at the same time. But I negotiated rights four years ago and they didn’t even know digital was going to be a big thing. So now, it’s go time.”

Vargas will be a judge at Wednesday’s finale of the Tachevah Music Showcase, presented by The Desert Sun, at the Date Shed near her home in Indio. She’s doing it partly because she’s interested in finding new talent for her Edge Music Network. She plans to put the winning band’s music video on her Indie and Featured Artist channels. But she’s also motivated by her desire to give back.

“I’m extremely ecstatic,” she said of the progress of her network. “If we have 20,000 subscribers, that’s $20,000 I can give to charity. So, I’m proud of myself because we’ve raised our first dollars for charity and we haven’t even started marketing yet. When we start marketing, it’s going to be significant.”

Tachevah finale

What: The finals of the Tachevah Music Showcase, presented by The Desert Sun, featuring the local bands Jesse James, brightener, CAKES and the BrosQuitos vying for cash and prizes

When: Doors open at 6:30 p.m. Wednesday, music starts at 7:30 p.m.

Where: The Date Shed, 50725 Monroe St., Indio

Admission: Free

Information: Tachevahmusic.com or (760) 775-6699

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