NY:LON Connect Startup Report: 30 startups to watch in 2017...

The state of the current music startups scene was a big theme at the recent NY:LON Connect conference that Music Ally and the Music Business Association co-organised.

Six British startups pitched their technologies at the event, and we’ve since published our opinion on why we feel optimistic about the music/tech landscape in 2017.

If that’s not enough startup talk for you, try this: Music Ally has compiled a mini-report about 30 of the music and music-related startups that we think are worth watching in 2017 (and hopefully beyond).

Prepared for NY:LON Connect, we’re opening it up to our readers and the wider world. From music creation and live video-streaming to blockchain-based systems, chatbots and artificial intelligence, the 30 included startups are a snapshot of the innovation going on in and around music.

You can download the report as a PDF here

The report also includes an introduction, and a report of the startups and innovation panel session at NY:LON Connect. The full list of startups included in the report is:

– BandLab
– Chew
– Disciple Media
– Dot Blockchain
– Dubset
– Gearbox Records
– Grammofy
– Instrumental
– Jaak
– JoinMyPlaylist
– Jukedeck
– Landmrk
– Mbryonic
– MelodyVR
– Mind Music Labs
– Mimi Hearing Technologies
– Resonate
– Rotor
– Sonalytic
– Soundcharts
– Soundtrap
– Stagelink
– Stem
– Superphone
– The Bot Platform
– TheWaveVR
– Tido Music
– Vertigo Music
– Vibble
– Weav

We hope you enjoy it. Music Ally is always keen to hear about new music-related startups: contact contributing editor Stuart Dredge if you’re working on something you’d like to tell us about.

A lot of our startups coverage is part of our premium research service, which includes a daily news bulletin and fortnightly analysis reports. You can sign up for a trial here.

Also check out some of our recent startups-related coverage here on Music Ally:

Bob Moczydlowsky of Techstars Music interview: ‘Our goal is to create a real centre of gravity’

Dave Haynes of Seedcamp interview: ‘What will the next wave of music startups be?’

Teosto interview: ‘We are looking at the future of data, the future of CMOs, and the future of music’

UMG exec: ‘Product placement in music videos is boring’

“Product placement in music videos. So what? It’s boring, actually. The new new business, it’s about how you can match the right talent with the right brands,” said Universal Music’s global head of new business Olivier Robert-Murphy at our NY:LON Connect conference yesterday. “You can create a story. You create content, branded content that is shareable, which you can measure very well.” Robert-Murphy was talking about Universal’s growing business working with brands, using its internal data on artists and their audiences to match them with the right partners. “If you’re listening to the Rolling Stones, I’m telling you, you’re drinking Coca-Cola not Pepsi… the data tells you this, and you can bring that data to brands and explain this is why that talent is relevant to your audience,” he said. Robert-Murphy also warned of some old pitfalls that can rear their heads in this modern world of brand partnerships. “You’re not going to ask a talent to represent a burger brand if he is a veggie. That doesn’t work. It’s a real example, by the way,” he said. “You should not consider an artist as a walking billboard.”

Source: Music Ally

Dot Blockchain boss: ‘Music will be a $100bn industry’

Dot Blockchain founder Benji Rogers made a startling prediction at our NY:LON Connect conference yesterday. “This is the most extraordinary time to invest in music startups. I think the potential is absolutely huge, because of what’s coming,” he said. “My prediction is we’ll be at $100bn a year as an industry in two years, but it’s going to be really painful to get there.” How though? Rogers suggested that the key will be solving “the interoperability layer” of the music industry, building usage permissions into music files to speed up the licensing process, and (hopefully) attract back investors who’ve been giving music a swerve. “If you combined the publishing and the performance information into a tradeable asset, you can make bets based on its provenance, and licensing becomes ten times faster,” said Rogers. For now, some of the familiar obstacles remain. “From a legal perspective, the two big obstacles for any music startup that license music are punitive advances… and MFNs,” said Reed Smith partner Sachin Premnath, speaking on the same panel as Rogers. “If you have two very engaged labels who believe in your product, and one that doesn’t and gives you a very onerous deal, with MFN’s you’re lumbered with the worst deal.”

Source: Music Ally

Merlin CEO: ‘Spotify payouts are ten times YouTube’s’

“YouTube proudly proclaims they have a billion viewers. Spotify just announced that they have reached 100 million users,” said Merlin CEO Charles Caldas at our NY:LON Connect conference yesterday. “When we bank that cheque every month, the cheque from YouTube is less than a tenth of the cheque that we bank from Spotify, regardless of that disparity in user numbers.” Caldas was talking in our session on the future for labels, where fellow speakers Bill Wilson and Mark Mulligan focused on the opportunities around video content. “In the war for short-form video, which seems to be the king here, we have an enemy. And the enemy that we have is kittens!” said Wilson, to point out that music is competing for attention with all kinds of other content on social and online-video platforms. Wilson called for labels to invest more in low-cost video teams. “This war is done with an iPhone, and kids with an eye who can see content for what it’s worth, who are active users of this content in their generation, and understand what fans are looking for.” Mulligan pointed out that “Younger kids on Musical.ly, their idea of music is a 15-second clip that they’re lip-syncing to”, and suggested that some traditional music formats may be dating rapidly. “Maybe an album needs to be shorter. Maybe it’s unrealistic to try to compete for 35-40 minutes of people’s time…”

Source: Music Ally

Universal Music and Spotify talk music-streaming in 2017

Shock! Horror! Streaming was a hot topic at a music-industry conference! But there were some useful nuggets of opinion, plus the odd zinger of a quote, in the keynote sessions of our NY:LON Connect conference in London yesterday.

Universal Music’s SVP of digital strategy and business development Jonathan Dworkin hailed the impact of smart speakers like Amazon’s Echo and Google’s Home – “speakers and music go together like guns and drugs!” – but also made a bold prediction about streaming’s impact on the Chinese music market. “In the next ten years, China may well become the world’s largest recorded-music market,” said Dworkin, suggesting that thanks to local streaming services and (perhaps) global platforms, China could see a musical boom that “rivals the 1960s in the west”.

Dworkin also addressed industry worries about the sustainability of pureplay streaming services like Spotify, against competition from tech giants Apple, Google and Amazon. “Two of the industry’s top five accounts are operating with negative margins funded by other people’s money,” he said. “We need to find ways to ensure we have a balanced ecosystem of partners: platforms and pureplays… At Universal we are very mindful of the digital ecosystem’s fragility.”

Spotify’s chief economist Will Page offered up a stat worth thinking about: in the UK, recent research suggests there are now 8.3 million music subscribers, compared to the 7.4 million iTunes UK customers in 2012. “A tipping point where we have more people paying for access than have ever paid for ownership in this country,” said Page, who also talked about displacement effects in the sales-to-streams transition. “In the UK, for every pound we lose from downloads, we’re getting £2.20 from streaming. In the US, for every dollar you’re getting $2.18 from streaming.”

A subsequent panel session on streaming saw Pandora’s Liz Moody call for diversified models – “We can’t as an industry just focus on subscription. There’s a number of different models in different markets that are going to work” – while The Orchard’s Scott Cohen and Sony Music’s Dorothy Hui mulled music’s future in a world of voice-controlled devices.

“Marketing is going to have to be much more specific and much more persistent in terms of making the linkages to artist activity or music placement,” said Hui, before pointing to the challenges of ‘over-discovery’ in the streaming world. “26 new artists are discovered each month per user. How are you ever going to remember you even liked something?” she said. “It has to be a very OCD person that has a system of filing and starring, which I sometimes employ, to even have that discovery process be meaningful to an artist.”

Cohen and Universal’s Dworkin addressed suggestions that the standard $9.99-a-month streaming subscription price needs to come down. “It’s very hard to have price attrition at the top end, and then in a future and more mature market, move back up,” said Dworkin, who said experimentation with mid-tier and bundles is possible without “slashing prices wholesale at the top end”. Cohen agreed: “I don’t think we need to cut the top to bring in the bottom.”

But the overall message was optimism: “We all tend to focus on the big recorded-music markets, but solving things like payments and getting the offers right for markets like China, India, Indonesia… enormous growth is going to come out of those markets,” said Dworkin. “I think there’s a world where we get to two, three, four hundred million subs. It’s possible.” You can read the full reports from these two sessions via the links below.

Universal / Spotify sessions
Streaming panel session

Armonia boss Virginie Berger on the excitement of machine learning potential

Originally written for Music Ally.

Machine learning was one of the key music-industry trends in 2016, according to Virginie Berger, CEO of music licensing hub Armonia.

Berger, who will be speaking at our NY:LON Connect conference in London later this month, said that the discipline of machine-learning has already shown its importance not just in areas like personalised music recommendations, but also as a creative tool for musicians.

“One fundamental goal in the field of Music Information Research is to automatically structure sound and music collections in order to facilitate the access and retrieval of their audio content. For hubs like Armonia, it is fundamental,” said Berger.

She added that with machine learning having permeated nearly every area of music informatics, it is throwing up new challenges and opportunities for researchers and digital-music companies.

“For instance, how do we recommend a piece of music that has not yet been rated by anyone? How do we define similarity when crowd data is missing?” said Berger.

“With collaborative filtering methods it is impossible to obtain good quality recommendations without rich user data, and unfortunately it is also often impossible to obtain rich user data without good quality recommendations.”

“This is where sophisticated machine learning systems based on content are necessary to bootstrap quality recommendations. Even from an industry perspective, content-based music recommendation remains very much an open and promising academic research problem.”

Berger hailed the progress made on these challenges within the MIR community, but noted that the problems are still “very far from solved”. She welcomed the efforts by services like Google Play Music in 2016 to use machine-learning to bring more personalisation to their users, and sees plenty more potential.

“Artificial intelligence is fascinating. How could machine learning change the composition of music? How using machine learning to generate music? Google’s art machine just wrote its first song,” said Berger, who is an avid follower of research like David Cope’s Experiments in Musical Intelligence.

Armonia is the pan-European licensing hub that was founded in 2012 by collecting societies SACEM, SGAE and SIAE. Other members are SACEM Luxembourg, SPA, SABAM, Artisjus, SUISA and AKM.

The hub includes more than 13m works covering 33 countries. Berger was appointed as Armonia’s first CEO in June 2016, and told Music Ally about her ambitions for 2017.

“From a licensing standpoint, our strategy is to implement more streamlined and simplified processes in order to benefit digital service providers and grow our client base,” said Berger.

“Armonia wants to reaffirm that its strength as a licensing hub is about flexibility and about letting members chose their degree of involvement in all or some activities of Armonia.”

“The societies that are members of Armonia have a common ambition to go further in what we do for creators and the online music industry: we are about ensuring a fair deal for everyone.”

Berger said that Armonia will also continue to host events and have its say on industry hot topics, while also shouldering more responsibility in the consortiums and institutions in charge of digital music standards and formats.

Ed Peto talks China, music downloads and streaming

The following is an extract from Music Ally's upcoming final report of 2016, released tomorrow at 6pm.

Thanks to a combination of government action to tackle piracy and continued innovation from digital services, China as a music market is attracting more optimism from the industry than at any point in recent history.

That optimism is something that Ed Peto, MD of China music industry services company Outdustry, recognises when he looks at some of the key trends in 2016, although he also thinks the market has created some new, thorny challenges for itself.

“We are slowly seeing the end of the 'Chinese consumers will never pay for music' dogma and are now firmly in the era of 'how quickly can we make it happen?’,” he says.

The transition has had surprises along the way. Peto notes that after the initial introduction in 2013 of freemium models, 2015 was expected to be “the year the penny dropped in terms of more content/value being pushed behind the paywall and more restrictions placed on the free tier” in order to drive subscriptions.

“2016 has seen those efforts stalling to a degree, mainly due to two quirks. Firstly, the market-wide effort never achieved full market-wideness - largely due to a difference of opinions between Tencent and Ali Music Group - the result of which is a Mexican stand-off in which services have been reluctant to throttle their free tier for fear of losing users to rivals non-throttled offerings,” says Peto.

“Secondly, we have seen an increasingly-wide adoption of a paid-download model for major releases. In this model the album is windowed as an exclusive paid download, normally for three months, frequently as a full album only, at a price point of roughly US$2/album.”

“While the overwhelming majority of fans will simply find the album for free via some other illegitimate source, enough people – occasionally breaking the million barrier – will now pay to make the endeavour worthwhile, certainly when when you set these download price points against the low per-stream minima available in the market.”

These paid-download album releases can provide mini-windfalls for labels, which may represent “a kind of win” in the march to change consumer habits in China. However, Peto thinks there may be a downside to the strategy too.

“It actually represents a huge distraction from the wider aim of converting fans into long-term subscribers. These frontline releases are not available for premium streaming during the download window unless you have paid for the download and are a premium subscriber, thereby devaluing the premium tier,” he says.

“Also, when the window is over and the album moves into the streaming free/paid structure, the hardcore fans have already bought the album and the overwhelming majority of casual fans have skipped the whole shooting match and turned back to illegitimate sources of some form. Both cases seriously undermine the premium subscription funnel.”

It’s a dynamic that’s particular to China in 2016: Adele aside, few albums in the west now make their debuts purely for sale rather than for stream. Peto says the issue is not enough to make him gloomy about the prospects for paid subscriptions in China though.

“While free tiers of freemium services are seen as being on-ramps for the hard-to-impress digital consumer in the west - involving a good deal of user acquisition heavy lifting - the vast majority of Chinese digital consumers are already on the free tier via one or more of the local freemium behemoths,” he says.

“All that remains is to convert this audience into premium subscribers within their existing ecosystems of choice. Easier said than done, but, in a sense, China has a head start on the west in this respect.”

Welcome to NY:LON Connect

On behalf of Music Ally and the Music Business Association we’d like to tell you a little more about NY:LON Connect – the aim and nature of the event.

This was something that was born out of a conversation between Paul Brindley from Music Ally and Bill Wilson from the Music Business Association (Music Biz) earlier this year when we were both bemoaning at the time the lack of a really good event at the beginning of the year to bring some of the more senior executives from the international music industry together to look forward, plan for the year ahead and anticipate some of the bigger strategic challenges the industry faces. Immediately we hit on the idea of some kind of joint event. With Music Ally based in London and with Bill and Music Biz’s contacts in New York, why not collaborate on an event that could alternate between these two great cities where so much of the business is based?

So, we’re delighted to get the ball rolling with our first event on 24th and 25th January in the beautiful surroundings of leading law firm and event host sponsor Reed Smith.

The programme is focused on four key tracks: the maturing streaming economy; the future for rights-owners and how they need to adapt to changing business demands and revenue streams; the innovation landscape including a pitch session featuring up to six of the best music start ups we can unearth and the publication of an exclusive music start up report from Music Ally; and on the morning of day two a focus on internationalisation with sessions on emerging markets and markets in transition.

The full agenda will be published shortly but on this site you can already some of the great names who have agreed to participate in the event including senior international label executives like Jonathan Dworkin from Universal Music Group and senior representatives from music services such as Elizabeth Moody from Pandora. You can check out the full list of speakers here.

There will be a mixture of panel sessions, interviews and presentations throughout the day and a half and to ensure that executives get the opportunity to have some private conversations too we will be making available private rooms which can be booked at no extra charge.

There’s no need to worry about food and drink as this will be taken care of throughout the day and a half by our host event sponsor Reed Smith.

So keep your eye out for more speakers and publication of the full agenda which will be announced shortly. And in the meantime please note that with limited places available we would strongly advise you to book early.

We look forward to seeing you at this and at future NY:LON Connect events! Sign up to our mailing list below to keep up to date with developments as they happen.

Paul Brindley, Music Ally and Bill Wilson, Music Biz