A dot-com millionaire, a real estate investor and a money manager are sitting at a bar, talking passionately about national unity over the near-deafening techno music blaring from overhead speakers. Just another Thursday night in Montreal, where a thriving subculture of entrepreneurs frequently huddle in dark spaces to talk politics, celebrate their successes and plot their futures.
Few of them have as much to boast about as Eric Boyko, the 42-year-old chief executive officer of Stingray Digital Media Group, who made his fortune by selling his online fundraising company at the height of the tech bubble. Most people have never heard of Stingray, but they likely know the company’s Galaxie music service, which lives in the upper reaches of their television menus.
The service is the company’s marquee product, and is carried on an astounding 75 million televisions in 56 countries. That makes Stingray one of the largest music companies on the planet – it’s bigger than the massively hyped (but woefully unprofitable) U.S. digital radio services Pandora and Spotify.
And as these competitors struggle to make money by selling music directly to consumers, the privately held Stingray is making a profit by selling commercial-free streams to cable and satellite television providers that add it to their subscribers’ packages. It is changing the way people to listen to music around the world, as it takes advantage of increasingly sophisticated Internet-enabled televisions to deliver carefully curated play lists into living rooms.
“We are the largest broadcaster in Canadian history and nobody knows that because we are very under the radar,” Mr. Boyko says. “We’re buying companies all over the world and bringing the jobs to Canada. And what I’m most proud of is we are exporting Canadian content into all of these other countries.”
The small group that surrounds Mr. Boyko on this night radiates charisma and character as they down vodka cranberries. He just ordered one for me because he’s disgusted by my pint of beer – it’s too filling, he says, and too Toronto – and when my replacement drink arrives, he pulls out the straw and throws the lime down my shirt to make sure I don’t embarrass myself by enjoying either one.
“I didn’t mean to do that,” he says. “But I’m glad I did. Beer isn’t the right drink for you when you are out in this city. Things are different here.”
That’s an understatement.
We’re in Hambar Restaurant Bar, a trendy charcuterie in Old Montreal that Mr. Boyko co-owns. He also owns a piece of the adjoining hotel, and talking about the businesses brings up one of his favourite topics – how the province’s entrepreneurs need to break out of their comfort zones. He wants to set up a travelling group of 20 executives from Quebec, all under 50 and running companies doing more than $200-million in annual sales, and take them to Bay Street to meet the country’s power brokers.
“We all need to understand that right now is the best time in history to be a Canadian business,” he says. “We have access to money when nobody else in the world has access to money so let’s get these people out there doing great things. Go, go, go.”
If you spend any time at all with Mr. Boyko you’re likely to hear him exclaim “Go, go, go.” It’s how he signs off all his e-mails, and he says it’s the guiding principle in everything that he does. His enthusiasm is infectious and that’s why he insists on being called his company’s chief energizing officer (I often find myself peppering our e-mail conversations with exclamation marks, something I normally avoid).
That energy has freaked out potential investors in the past, who worried it made him sound like an oversugared 12-year-old instead of someone you could trust to run a multimillion-dollar business. One went so far as to ask him to drop it from his lexicon, but the easily distracted and incredibly hyper Mr. Boyko dismissed the idea as ridiculous.
“Why would you invest with me if you don’t like ‘Go, go, go?’” he asks, hitting the table for emphasis. “You may as well say you are willing to invest in a beer company as long as they stop selling beer,” he says.
Mr. Boyko grew up in Montreal, the son of a francophone mother and anglophone father. Mr. Boyko is unlikely to change for anyone. He’s a pure entrepreneur – the only time he ever worked for someone else was when he bagged groceries in high school.
His first business was Campus Gourmet, where he sold precooked meals to McGill University students. It was going well until he realized they were making their customers sick by improperly preserving the food. The business collapsed as quickly as the meals were regurgitated – he was out $60,000 and still had 12 months on a lease he couldn’t break. And he was only 19.
“Nobody sued me, so that was good,” he said.
He decided to make use of the office space, and started a business selling scratch cards that could be used by fundraisers. That led to the creation of eFundraising.com, a company he started with a $2,000 loan from the Business Development Bank of Canada and sold at the height of the Internet boom for almost $30-million.
Shortly after, he raised $160-million to start Stingray. First, he bought a service that now forms the backbone of its karaoke channel that is available on 60 million televisions around the world. In 2008, he spent about $80-million to buy the Galaxie music service from the CBC.
The public broadcaster had developed the service, but was willing to sell just as the recession began to take hold. The business benefits from scale, Mr. Boyko says, and the CBC couldn’t expand the service internationally with the same aggressiveness as a privately held company.
Things could have been very different for Stingray. Before he settled on music, Mr. Boyko was interested in buying a birdwatching website that he felt could corner the market on seed sales. When that fell through, he tried to buy Trivial Pursuit because he was convinced he could build an e-commerce site around people’s love of incidental information (the owners declined to sell).
“We didn’t get into music because I’m a musician or anything but because we understand digital media and saw recurring revenue and a certain profit margin,” he says. “And we got into music when everyone said it was dead. CBC wanted to spin it out because it thought music was dying.”
CBC got back into the music business this year when it launched CBCmusic.ca, and it drives Mr. Boyko crazy. The service is largely similar to what Stingray offers with its standalone app that it sells to consumers.
“The reason I am so mad at CBC is that they are creating the perception that music is free,” he says. “If that’s true, then it will kill the music business. Somebody is always paying for it, but they make it sound like not. We pay $60 a month just so you can listen to music in this restaurant. You think it’s free? It’s not free.”
Mr. Boyko leans over the cured meats we’ve been eating and tells me to “ask some crazy questions,” but it seems pointless because he doesn’t really answer any of my logical ones (he whipsaws off on tangents instead). He doesn’t wait for me to think of something else to ask, though – he wants to talk about why he thinks Quebec entrepreneurs have it harder than entrepreneurs in the rest of the country.
“Here, people see entrepreneurs as flies that steal your blood,” he says. “But we are bees that pollinate every flower. In Quebec, if you’re an entrepreneur and you make money, then they say you either got lucky, or you stole from the government or you are Mafia.”
And with that, he jumps up to greet some friends he has spotted across the room. Entrepreneurs may be bees, but he’s more of a social butterfly.