Consumers are listening to more music than ever. In 2015, Americans aged 13+ listened to 23.5 hours of music in a week. In 2016 this number grew to 26.6 hours, and in 2017, this number grew again, to 32.1 hours of music per week.

 Listening to music has become a central pastime, with benefits including lowered stress levels, improved memory, and elevated moods. Mostly, this increase is due to the accessibility of any kind of music you want on platforms like Spotify and Pandora.

 It is no wonder that with all this time time spent listening to music created by others, more teens and adults alike want to learn instruments to create their own music.

 But, classes in schools often focus on classical music or studies of music theory, all which help in understanding music composition, but do not directly engage students in the type of music that makes them tick.

 Most students instead opt to take lessons with tutors, or even try and self-study their instrument of choice. However, this system is inefficient.

 Finding music tutors, especially in suburban environments has not advanced much from the days of posting paper signs with tear offs at the front of the grocery store. Actually, that’s exactly how people still do it.

 The rise of online education can help make this process look and feel more like finding an uber driver rather than finding a tag sale. This concept has been tried and tested in the context of academic tutoring.

 Websites like Wyzant ($21M+ in funding) and Chegg ($3.1Bn market cap) represent different models of online tutoring that have been exceedingly successful and continue to gain prominence in the ed-tech space.

 Not surprisingly, online tutoring has enjoyed an unprecedented rise in consumer acceptance: the online education market is projected to grow at a CAGR of 12.75% from 2017 – 2021, because of the accessibility and simplicity of using online education and tutoring platforms like Chegg.

 By 2021, k-12 online ed courses are estimated to rake in $121B, up from $63B in 2016. Needless to say, online education is becoming widely accepted as a viable method of learning.

 However, online education has struggled from limited interaction, depersonalization of the student-teacher relationship and a lack of structure, which can lead to some students falling off in terms of setting goals and advancing. This is especially true in terms of music, where practice is one of the most important determinants of successful learning.

ArtistWorks is an online education platform meant to contain all the benefits and conveniences of conventional online music education, while addressing the problems that arise from a lack of a student/teacher relationship.

Their patented Video Exchange Learning platform features a library of more than 900 hours of recorded instructional videos from course instructors. These courses range in difficulty, from beginner to advanced levels and enable students to choose their instructors, videos, pace and time that suit them.

 By providing pre-recorded lessons that can be taken at a users own pace, the organization can focus more on providing individualized service. What we mean by that is you can send in recordings of your progress, which in-house staff will review and provide back personalized video responses giving pointers on ways to improve.  

This is the key to scaling the business while maintaining a high quality user experience.

1. Learning Model: ArtistWorks has the formal approval of the Western Association of Schools and Colleges for its academic accreditation program. With this recognition, they have increased legitimacy as educators, and are proven to meet standardized requirements set by participating states.

In addition, their partnerships with Carnegie Mellon University, UCLA Extension, Central Queensland University, and Sapir College further their legitimacy in comparison to competitors.

Even more, their video feedback program should be much more efficient than alternatives in the online education industry. Through their video exchange program, as well as their 12 week courses, they have addressed many of the issues that accompany a lack of instructor feedback.

While this does not directly translate into stronger revenue streams, a higher success rate yields happier consumers, who may not only come back to take other courses, but may also end up with higher ratings, an important measure for consumers new to online education.

2. User Traction: Since the company began, over 87,000 users have taken one or more courses. Active subscribers increased from 1,736 in 2010, to 12,573 in 2017. More users represent growth in both publicity and revenue, and this consistent YoY growth is a healthy pace, representing not only a happy customer base, but growing popularity and acceptance among consumers.

ArtistWorks is also building new revenue streams via licensing deals with companies such as Lynda.com and Recorded Books. Through this licensing deal, not only can the company bolster its revenue streams, but also, ArtistWorks is able to publicize its brand to Linkedin Learning’s 17 million users.
3. Company Development: As the company continues to grow, ArtistWorks has shown a substantial amount of interest in growing it’s offerings. While the company initially began with its Video Exchange Learning platform, the company is slowly growing to fulfill other consumer needs, like its development of accreditation programs with Universities, and it’s expansion into the high-school student market. By continuously developing new products, ArtistWorks producing programs for all consumers, not just certain groups.

4. Industry: The online education industry is growing at a rapid pace, and is expected to reach $275Bn in the coming few years. As technology becomes more accessible for everyday people and microphones/wireless speeds increase, the skepticism surrounding online education is sure to drastically lessen as time goes on. Clearly, online education is simply more convenient and flexible than traditional methods of musical education, and trends of consumer acceptance are sure to positively influence the company’s rate of growth.

5. Comparison to Competitors: ArtistWorks has a better model than other competitors currently in the market. Their specialization in music is clearly a bonus, seeing as they can better attend to the various needs of online musical education. Their instructors are extremely qualified, and their platform is intuitive. While competitors often offer similar services, they are often lacking in other ways.

All in all, ArtistWorks is unquestionably an effective online platform for teaching students various types of music, on all different levels. They have many offerings, and are able to provide comprehensive services for diverse consumer needs. With a solid founding team, including Female Founder & CEO, Patricia Butler who has executive experience at Merrill Lynch, we think the business is in good hands.

Backed by the tailwind of a growing market for online education, ArtistWorks is likely to grow in popularity in the coming few years. By expanding its influence across Universities and High Schools, as well as professional-oriented learning sites like Linkedin, the company has positioned itself well to organically grow its brand awareness across individuals who are most likely to desire musical education: young adults and teenagers.

Prospective investors, however, need to be aware of a few drawbacks. In the past few years, the majority of their expenses have been dedicated to running its site and paying instructors. And, while revenues have been growing at a healthy rate, expenses have been steadily increasing as well.

 To this day, the company has never reached a positive net income. On the bright side, the team had over $3M in revenue in 2017 and the company projects that by the end of the year, they should begin to break even, and potentially turn a profit by the end of 2019.

All in all, ArtistWorks represents a great opportunity. It provides a diverse and growing list of services for a growing customer base, and is becoming increasingly relevant in a rapidly growing industry. Invest HERE if interested.