Office Hours Podcast: GoodRx Makes Prescription Drugs More Affordable
Spencer Rascoff
Spencer Rascoff is an entrepreneur and company leader who co-founded Zillow, Hotwire and dot.LA, and who served as Zillow's CEO for a decade. He is currently executive chairman of dot.LA and a board member at Zillow and TripAdvisor. In fall 2019, Spencer was a Visiting Executive Professor at Harvard Business School where he co-taught the "Managing Tech Ventures" course. In 2015, Spencer co-wrote and published his first book, the New York Times' Best Seller "Zillow Talk: Rewriting the Rules of Real Estate." Spencer is the host of "Office Hours," a monthly podcast on dot.LA featuring candid conversations between prominent executives on leadership, diversity and inclusion, and startups.
It became a kind of game.
Doug Hirsch, cofounder and co-CEO of GoodRx, needed to get a prescription filled. His pharmacy said it would cost a whopping $500. On a whim, Doug crossed the street to check out a different drugstore, and found the price offered was half as much. Intrigued, he went to another pharmacy and found yet another price.
In conclusion, there was no clear reason why the drug prices fluctuated so much. Pharmacists could not explain why.
The discovery of unpredictable and opaque prescription drug pricing led Doug to co-found Santa-Monica based GoodRx in 2011. It's a company that compares prescription drug prices and allows members to use free coupons to purchase steeply discounted prescriptions. Doug says GoodRx has saved Americans over $20 billion in prescription drug fees.
On this episode of my Office Hours podcast, hear Doug and I discuss how he built his business slowly and steadily, the ways in which paranoia keeps him on his toes — and why naiveté is an entrepreneurial strength.
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Lyre wants to sell Americans on clear-headed drinking with their faux bourbon and other mocktail spirits. The Australian-based company set up North American offices in Los Angeles last year and has aggressively sought to make a mark in the Golden State. And it seems to be working; the company just raised $11.5 million.
Lyre has hitched its success to the growing "sober curious" movement, focusing on health-conscious consumers with its dry month challenges. About 60% of the company's sales come from the United States and it's increasingly looking for tastemakers in Southern California to help build its brand.
<p>"We believed that there was significant latent demand in the U.S. market for consumers looking for a sophisticated non-alcoholic alternative," said Christian Butler, Lyre's Los Angeles-based senior vice president in an email response. Some bars in Los Angeles have adopted the mocktail, a trend that he hopes will influence the rest of the country. </p><p>Founders Mark Livings and Carl Hartmann created the non-alcoholic drink line in 2016 catering to those who might be left out in social settings where booze is flowing. Lyre's mission is driven by a focus on health and lifestyle, allowing consumers to enjoy the best of both worlds while being responsible.</p><p>"Our business anticipates and matches the trends of the consumer and culture and our current product innovation is being developed to match alcohol spirit flavors and styles," said co-founder Livings in the announcing statement. </p><p>The seed round will be divided into three tranches and be distributed over the next 12 months. The company is backed by Doehler Ventures, DLF Venture, Maropost Ventures with several European, American and Australian family offices and also HNWI participating.</p><p>Lyre has a line of 12 fake alcoholic beverages, from amaretto to gin and rum, that are sold at Bevmo, Amazon, at some Los Angeles bars and directly online. The drinks aren't cheap at $35.99 for a 700 ml bottle. </p><p>Although the pandemic depressed sales, the company said since January it has seen a monthly 400% recurring revenue growth. The recent raise will allow Lyre's products to expand their market reach as they set to launch an Italian Spritz in the U.S. market later this year and develop a line of ready-to-drink mocktails like gin and tonic or bourbon and cola. </p><p>According to a <a href="https://www.nielsen.com/nl/en/insights/article/2020/dry-january-non-alcoholic-record-highlights-future-potential/" rel="noopener noreferrer" target="_blank">report by Nielson</a>, the non-alcoholic beer market had an increase of 3.4% in the last year. Lyre's also looking to compete by expanding to other countries.They are currently available in Australia, New Zealand, the United States, the United Kingdom, Hong Kong, Singapore, China and throughout Europe.</p><p>"The next year demarcates our business evolution from a start-up to a true multi-national beverage company, with manufacturing in multiple, global locations, compliance for new markets, and continued recruitment firmly at the top of our task list," said Hartmann in the announcing statement.</p>
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Musicians are facing a tough road and the pandemic hasn't made life any easier. But changes are afoot that could help.
A flurry of deals between music copyright owners and streaming music's heavy-hitters may be just the first step in a process that could see "the most important copyright reform since the U.S. passed the Digital Millennium Copyright Act (DMCA) 22 years ago," according to one industry observer.
With it, artists and rights holders should be better positioned to benefit from the growing relevance of music across social media platforms, gaming consoles, virtual gyms and much more.
<p>"There clearly has been a frenzy of activity," David Israelite, president and chief executive of the National Music Publishers' Association (NMPA), a trade association representing American music publishers and songwriters, told dot.LA. </p><p>The changes afoot stem from a battle that has been playing out in Europe that has pitted the creative community against some of tech's giants such as YouTube and Facebook. Those companies depend on content created by artists. </p><p>Last year, the EU adopted tough new copyright laws set to take effect next June. Though the regulations are facing a slew of challenges, global digital companies are looking to come into compliance to get ahead of the curve, and possibly an edge on competitors. </p><p>In August, Santa Monica-based Snap <a href="https://www.bloomberg.com/news/articles/2020-08-03/snap-lands-deals-with-top-music-companies-to-add-songs-to-videos?sref=QjdS4d5U" rel="noopener noreferrer" target="_blank">struck a deal</a> with several big music companies for rights to their music. L.A.-based Triller <a href="https://musically.com/2020/08/13/triller-signs-new-18-month-contract-with-b2b-firm-7digital/" rel="noopener noreferrer" target="_blank">signed a deal</a> with digital music firm 7digital for back-end support on its licensing management. </p><p>In July, <a href="https://musically.com/2020/07/23/tiktok-licensing-us-publishing-nmpa/" rel="noopener noreferrer" target="_blank">TikTok agreed to terms with NMPA</a>, which included a settlement for past violations and an agreement for the future. The Culver City-based company also recently signed deals with indie digital rights managers <a href="https://www.musicbusinessworldwide.com/tiktok-signs-global-licensing-deal-with-indie-label-agency-merlin/" rel="noopener noreferrer" target="_blank">Merlin</a> and <a href="https://www.musicbusinessworldwide.com/tiktok-inks-new-global-deal-with-believe-one-of-the-worlds-biggest-independent-music-companies/" rel="noopener noreferrer" target="_blank">Believe</a>. </p><p>The Believe agreement could be particularly beneficial. It allows the independent artists affiliated with Believe-owned TuneCore to upload tracks onto TikTok, <a href="https://www.musicbusinessworldwide.com/tunecore-offers-free-distribution-to-tiktok/" rel="noopener noreferrer" target="_blank">the company announced last week</a>, potentially bringing them a massive new global audience. </p><p>And as in-home fitness grows more popular and more reliant on music. Apple, for instance, <a href="https://www.apple.com/newsroom/2020/09/apple-fitness-plus-a-personalized-fitness-experience-comes-to-life-with-apple-watch/" rel="noopener noreferrer" target="_blank">recently announced a new subscription fitness program</a> that will involve music. </p><p>The company is "doing it the right way – licensing from the very start," Israelite said. NMPA will undoubtedly be watching other competitors in the fitness space closely.</p><p class="shortcode-media shortcode-media-rebelmouse-image">
<a href="https://images.unsplash.com/photo-1594810205183-18a8b0ce6c13?ixlib=rb-1.2.1&q=80&fm=jpg&crop=entropy&cs=tinysrgb&w=400&fit=max&ixid=eyJhcHBfaWQiOjEzMzIxMn0" target="_blank"><img type="lazy-image" data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDQ0MjY2NC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYxMjA0MTMyNH0.u9Jw-CUCzI1EEbsUATH9Zlc7u-6jeSKd47QHOKyofjg/image.jpg?width=980" id="57a2e" class="rm-shortcode" data-rm-shortcode-id="bfe0b0ce54c2028f6a08f0ecccc0164f" data-rm-shortcode-name="rebelmouse-image" /></a>
<small class="image-media media-caption" placeholder="Add Photo Caption..."> European Union member countries will begin enforcing Article 17 in June 2021. that require platforms to make an upfront effort to avoid copyright violation. </small>
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Photo by <a href="https://unsplash.com/@guillaumeperigois?utm_source=RebelMouse&utm_medium=referral">Guillaume Périgois</a> on <a href="https://unsplash.com/?utm_source=RebelMouse&utm_medium=referral">Unsplash</a>
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</p><h2>Why Are All These Deals Happening Now?</h2><p>In the U.S., the current legal framework – which emerged with the DMCA, before social media existed – requires platforms to respond to takedown notices, but not to proactively ensure that songs that show up in your feed are properly licensed. </p><p>When a song's rights holder issues a takedown notice, it leaves the platform with the choice of obtaining a license, removing the song from the platform (and potentially upsetting users) or possibly getting sued. </p><p>Songs have two kinds of copyright: one for the sound recording, and one for the underlying composition. If a platform is making money in part thanks to a song, both copyrights are relevant. </p><p>Since the performer is the face of the music, the songwriter can sometimes be forgotten. </p><p>"You often see (platforms) start with labels then move on to publishers. Sometimes they won't, though, or sometimes they won't get to the smaller, independent publishers," Israelite added. </p><p>Platforms can also take "Safe Harbor," meaning "what they don't know is on their platform, they're not liable for," said Wilson Hays of L.A.-based <a href="https://pex.com/" target="_blank">Pex</a>, a tech company that monitors audio and visual assets across the web. But by June of next year, <a href="https://www.termsfeed.com/blog/eu-copyright-directive-article-17/" rel="noopener noreferrer" target="_blank">the EU will begin enforcing</a> reforms that require platforms to make an upfront effort to avoid copyright violation. The new E.U. laws won't apply directly to content posted in the U.S., but companies with international operations may find it easier to roll out compliance changes across their global operations rather than taking a piecemeal approach. </p><p>Hays believes that many are already trying to get ahead of Article 17's requirements before the new legislation takes effect. It may behoove them to do so, since <a href="https://www.ipwatchdog.com/2020/06/02/senate-ip-subcommittee-hearing-dmca-reform-grand-bargain-no-longer-working/id=122124/" rel="noopener noreferrer" target="_blank">the U.S. is looking at its own copyright reforms</a>. </p><p>This is a big deal, Hays said. </p><p>"Life will get better come 2021 for independent rights holders because they will have tools at their disposal that will allow them to have more control over their content — on top of generating more revenue," he added. "This attribution will happen prior to upload, allowing any creator to participate in whatever revenue is generated from the get-go."</p><p>Indian companies, too, are becoming more aggressive about enforcing their music copyrights on social media. Several short-form video companies that have gained popularity in the wake of TikTok's ban in the country, including Triller, are <a href="https://musically.com/2020/09/08/t-series-takes-on-indian-short-video-apps-over-music-usage/" rel="noopener noreferrer" target="_blank">facing lawsuits</a>.</p><p class="shortcode-media shortcode-media-rebelmouse-image image-crop-16x9">
<a href="https://images.unsplash.com/photo-1527334919515-b8dee906a34b?ixlib=rb-1.2.1&q=80&fm=jpg&crop=entropy&cs=tinysrgb&w=400&fit=max&ixid=eyJhcHBfaWQiOjEzMzIxMn0" target="_blank"><img type="lazy-image" data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDQ0MjY2NS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYzNjQzMDU5NX0.vDamg-65AmkrOVrmYwlAZ8S7Bs8xOEo-6WK7OEk3O2k/image.jpg?width=1245&coordinates=200%2C726%2C274%2C80&height=700" id="fc235" class="rm-shortcode" data-rm-shortcode-id="9c457d1c550e785bd9f69581160fa173" data-rm-shortcode-name="rebelmouse-image" /></a>
<small class="image-media media-caption" placeholder="Add Photo Caption...">Amazon-owned streaming video company Twitch also relies heavily on music.</small>
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Photo by <a href="https://unsplash.com/@casparrubin?utm_source=RebelMouse&utm_medium=referral">Caspar Camille Rubin</a> on <a href="https://unsplash.com/?utm_source=RebelMouse&utm_medium=referral">Unsplash</a>
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</p><h2>Music Has Become a Core Component of Social Media
</h2><p>On YouTube, for example, there are at least 10 seconds of music on 84% of the platform's videos. Over half of all videos on Instagram contain music, according to Hays. Getting their licenses in order allows platforms to let their users include music in their videos without needing to worry they will be taken down.</p><p>Amazon-owned streaming video company Twitch also relies heavily on music. <a href="https://www.billboard.com/articles/business/9431760/jeff-bezos-twitch-music-royalties-artist-rights-alliance-letter" rel="noopener noreferrer" target="_blank">The company has taken heat</a> for Jeff Bezos' <a href="https://www.billboard.com/articles/business/9429423/jeff-bezos-stumped-twitch-royalties-congressional-hearing" rel="noopener noreferrer" target="_blank">poor performance before Congress in July. when representatives asked him</a> if the company pays out royalties. He couldn't say, but the answer is… rarely. </p><p>Platforms that delay getting their licensing deals in order can save themselves cash and embarrassment. They can also avoid navigating the complex copyright landscape, but as they grow that strategy can come back to bite them. </p><p>"Once they begin generating substantial revenue, then they'll draw the attention of rights holders," said Hays </p><p>At least part of the change has to do with a growing intolerance by the creative community of extremely wealthy companies using music without proper licensing. Another portion is driven by successful, high-profile legal disputes that Israelite said have "sent a message to other companies." </p><p>Peloton, for example, faced a protracted legal battle before <a href="https://www.prnewswire.com/news-releases/nmpa-and-peloton-announce-settlement-of-litigation-joint-collaboration-agreement-301012233.html" rel="noopener noreferrer" target="_blank">agreeing to terms</a> that, as with TikTok, accounted for past violations and set new terms for artists featured on its platform. Such cases, Israelite noted, have "accelerated the choice these companies have to make": Either license properly, or be a copyright infringer, and bear the consequences of receiving takedown notices or getting sued. </p><p>In the wake of Jeff Bezos's embarrassing admission to Congress, Twitch is "starting to become more of a focus for the need for proper licenses," said Israelite. </p><p>As has already been seen in India, TikTok competitors in the short-form video space can't just focus on having the right algorithm and attracting a big user base. Israelite pointed to Triller as an example of a startup that has deals with record labels (for the recordings) and some publishing deals that may soon have to play catch up. </p><p>"I think they'll have to deal with a pretty large problem for a significant number of songs being used without proper permission from publishers." </p><p>Israelite also noted that Twitter has no publishing licenses yet. </p><p>More ripples are likely to emerge wherever music can be found in the digital landscape, from social media to gaming, fitness and beyond. Whether that change comes in the form of lawsuits or licensing agreements remains to be seen. </p>
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