21 Talking Points from NY:LON Connect

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Music Ally and the Music Business music and technology industries to talk Association co-organised the ﬁrst NY:LON about the current digital-music ecosystem, Connect conference, which was held in and how it could be improved. Here are London on 24-25 January 2017. The event some of the key talking points from Music brought together executives from the Ally’s coverage of the event.

1 21 Talking Points from NY:LON Connect

01 Streaming may have expanded the The caveat is that iTunes wasn’t the only digital music-buying market music downloads service at the time in the UK. But he drew a ﬁrm conclusion from At NY:LON Connect, Spotify’s chief the comparison. economist Will Page pointed to Midia Research’s estimate that 8.3 million people “At worst it’s neck and neck. At best it’s a in the UK now pay for music-streaming tipping point where we have more people subscriptions. Page compared that to past paying for access than have ever paid for research from Kantar WorldPanel claiming ownership in this country,” said Page. that there were 7.4 million total UK iTunes He also tackled the question of customers in 2012 – arguably the peak of displacement eﬀects: whether the the music downloads market. industry’s gains from streaming are

2 outweighing its losses from declining In his keynote speech, Universal Music download sales. Group’s Jonathan Dworkin criticised suggestions that there isn’t already pricing “In the UK, for every pound we lose from flexibility in the market, pointing to mobile downloads, we’re getting £2.20 from bundles and student/family deals, as well streaming. In the US, for every dollar as Amazon’s tied-to-Echo mid-tier offering. you’re getting $2.18 from streaming,” said Page. “It’s very hard to have price attrition at the top end, and then in a future and more There was also a recurring talking point mature market, move back up,” he warned about how much bigger the global music during a panel session on streaming. “I subscriptions market can grow beyond its don’t think we have to do this by slashing current 100 million people – another Midia prices wholesale at the top end.” He was stat. That company’s boss Mark Mulligan backed up by The Orchard’s Scott Cohen: advised caution. “I don’t think we need to cut the top to bring in the bottom.” “The percentage of people who are going to pay for stuff is always going to be a Another speaker, Beggars Group’s digital minority,” said Mulligan, although he boss Simon Wheeler, suggested that the suggested that this minority could still tough economics of streaming make amount to around 200 million people ditching the $9.99-a-month price point a globally by 2021. risky endeavour for many parties.

02 Execs bite back against the pressure “It’s pretty hard for the songwriters, the to lower streaming subscription prices performers, the labels, the services… it’s kinda hard for everyone to make this a In 2016, there was a running debate about business as it is. So taking oﬀ the top end whether the standard $9.99-a-month cost when we have millions of people coming of a streaming subscription is too high. Will into the marketplace… I don’t say we don’t we soon be reaching a ceiling of early go there at some point, but that point is far adopters prepared to pay that much, and if ahead of us,” he said. so, should the price come down?

3 03 There have been plenty of losers from streaming “32 digital music services have shut About those tough economics, though... “32 digital music down in the last ﬁve services have shut down in the last ﬁve years,” explained years” Music Ally’s Karim Fanous. Of those, 53% have wound down, Karim Fanous 13% went bankrupt, and 22% were acquired.

Can even the bigger pureplay services like Spotify, Pandora and Deezer survive against Apple, Google and Amazon? The industry’s biggest label is aware of the debate.

“Two of the industry’s top ﬁve accounts are operating with negative margins funded by other people’s money,” said Dworkin during his keynote speech. “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.”

4 04 ‘Cross-usage’ isn’t a factor in music “And that’s very diﬀerent for the music business, which has been focused on During Page’s NY:LON Connect session, increasing penetration in the markets we saying that in the streaming TV/ﬁlm space, know really well… I think there’s a world there is evidence of “cross-usage” of rival where we get to two, three, four hundred services, but not in the music market. million subs. It’s possible.”

“There is growing evidence that people are The key will be treating each territory subscribing to Amazon Prime plus HBO, individually, and avoiding assumptions. A and possibly paying the BBC licence fee point made by Armonia CEO Virginie and paying for Virgin Media’s package of Berger when she talked about Africa. content,” said Page. “Usually you want to apply the same rules “In music services, I don’t think as we have in western countries, in terms cross-usage is so high. If I subscribe to of rights, copyright, piracy, monetisation. Apple Music, there’s very little chance I’m But it doesn’t work in Africa,” she said. going to subscribe to Amazon Music or “You have to forget everything about how Spotify.” it works [in the west].”

05 Many of the next 100m subscribers Warner Music’s Alfonso Perez-Soto talked will come from emerging markets about the streaming “explosion” in Latin America, where having a subscription to We have 100 million music subscribers, Spotify, Apple Music or another service but where will the next 100 million come has become an aspirational thing. from? The industry hopes many are from Latin America, China, India, Russia, Africa Like Dworkin, he said payments will be and other emerging markets. critical. “We really basically have to ﬁrst work on alternative methods of payment… “We all tend to focus on the big we have to adjust and localise our recorded-music markets, but solving business,” he said. “We have to cooperate things like payments and getting the oﬀers with carriers as much as we can, obviously right for markets like China, India, if we can get a fair deal in the share. But Indonesia… enormous growth is going to also explore other methods of payment.” come out of those markets,” said Dworkin.

5 06 China has huge potential but it is still early days “At this point, we’re talking about a little By sheer scale of population alone, China has long been seen bit over half a billion as having rich potential as a music market, but widespread people are piracy and a dearth of legal digital services has thrown cold consuming music water on those hopes in the past. Now, both of those issues online in China” are being addressed, and the industry is hopeful again. Ed Peto UMG’s Dworkin talked about China being transformed into “one of the world’s leading music markets” thanks to the growth of local streaming services. “In the next ten years, China may well become the world’s largest recorded-music market,” he said, talking of the potential for a cultural knock-on eﬀect that “rivals the 1960s in the west”.

Market expert Ed Peto of Outdustry oﬀered a comprehensive keynote outlining the challenges and opportunities for music

6 in China, including some of the big moment. “While the licences are in place, numbers that are fuelling optimism. which is great, and we’re starting to get the reporting, which is great, now we’re There are now 731 million internet users in looking at one of the lowest per-stream China, including 695 million mobile internet rates in the world. Perhaps the lowest,” users, and an estimated 502 million online said Peto. “We think there are about 15 music users. “At this point, we’re talking million premium subscribers in China now. about a little bit over half a billion people That is the very, very beginning of where are consuming music online in China,” that’s going to go.” said Peto, adding that around 75 million of those people are listening to 07 Global growth is good for the indies Anglo-American repertoire. Streaming’s growth around the world is Peto also pointed to the dominant role of encouraging for independent labels, said tech giant Tencent in the Chinese digital Merlin CEO Charles Caldas. music market: it owns the three most popular services by market share: QQ “More than two thirds of our members two Music (39%), Kugou (28.8%) and Kuwo years in a row have said that their overall (9.6%), and has exclusive licensing deals business is growing… And one of the with Sony Music and Warner Music, albeit other reasons it’s doing that: we now have with the rights to sub-license that music to a truly global audience,” said Caldas. rivals. “We’re talking about the idea of 40% of Merlin’s members now make more someone like Warner licensing exclusively money outside their home territory than to Spotify, and then asking them to license inside it, compared to around 16% in the on to Apple Music on their own terms,” purely-physical days of the industry. said Peto, to explain the dynamic. “This year we’re going to make the same These services already have signiﬁcant amount of audio-visual streaming revenues scale. QQ Music now has around 200 from Brazil as in France, and more than in million monthly active users, as does Spain. And Mexico is not very far behind Kugou. But with subscription tiers still at that… Your accessibility to fans is no an early stage, these audiences are longer limited to marketing within your yielding relatively small revenues at the immediate environment.”

7 08 Labels think per-stream rates are not the full story “It is a good thing to take a $50 average Artist-rights site The Trichordist recently updated its ﬁgures for annual spend-on- average per-stream payouts from a range of streaming music consumer, services, sparking a renewed debate about the merits of the and turn them into a model for creators. However, NY:LON Connect saw a $120 average annual pushback against this from some speakers. spend-on-music Dworkin criticised an “obsession with per-play” rates on consumer” streaming services, suggesting it’s the wrong question to ask. Jonathan Dworkin “The reality is, what you have to look at is ARPU and lifetime customer value… the conversation with artists is not about ‘why am I only getting fractions of a penny’, but that it is a good thing to take a $50 average annual spend on music consumer, and turn them into a $120 average annual spend on music consumer,” he said.

8 Caldas also used the o-word. “This business, it’s about how you can match obsession with per-stream rates and the right talent with the right brands. You replacing the value of the album are things can create a story. You create content, we’re learning to measure better as the branded content that is shareable, which paradigm shifts,” he said. “We need to you can measure very well,” he said. rethink all of those preconceptions about where power, control and value sits in the “Data is absolutely key. When you talk to business.” brands today, they want proof,” he said of UMG’s tool for matching brands and A session focused on managers also saw musicians. “If you’re listening to the Rolling support for Spotify, and claims that the Stones, I’m telling you, you’re drinking more data it provides to artists about their Coca-Cola not Pepsi… the data tells you streams and listeners, the better a this, and you can bring that data to brands response it will have to criticism about and explain this is why that talent is per-stream rates. relevant to your audience.”

“I feel so sad and sorry for these artists 09 The ‘value gap’ isn’t just YouTube that feel that Spotify is an evil thing that doesn’t pay artists. It makes me sad that One of the raging arguments of the music we are in this situation and having to listen industry in 2016 concerned the ‘value gap’ to this. Sometimes young artists just don’t between streams of music on free, get it and that is why I want them to ad-funded services whose users could engage with it,” said Eric Harle of D-E-F upload content (i.e. YouTube) and their Management, which works with Moby, payouts to the music industry. Robyn, Röyksopp and The Knife among While this debate was not revisited too others. much at NY:LON Connect, there was a Meanwhile, Universal Music’s global head sense that the industry is now looking of new business Olivier Robert-Murphy carefully at Facebook as well as YouTube. talked about how this kind of data is being Dworkin talked about UMG’s desire to used to forge partnerships with brands. “continue to support our partners in the “Product placement in music videos. So ad-funded content world” while warning what? It’s boring, actually. The new new that “we need to enlist the help of these

9 services in securing our content in their ecosystems, so we “When we bank that can choose what content is made available to consumers, cheque every month, and at what rates”. Note the plural there: SoundCloud may be the cheque from licensed, but Facebook’s newly-appointed music-licensing YouTube is less than boss will be expected to work quickly to assuage a tenth of the cheque rightsholders’ fears that it could become YouTube 2.0. that we bank from Spotify” There was, inevitably, the odd shot ﬁred across the actual Charles Caldas YouTube’s bows. “YouTube proudly proclaims they have a billion viewers. Spotify just announced that they have reached 100 million users,” said Caldas. “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...”

10 10 It’s an audio-visual world – so how said, before warning the industry that it does music successfully live in it? faces new and unexpected competition for attention in this new world. One of the big themes of the conference involved YouTube, but also other “In the war for short-form video, which video-centric platform, from Snapchat and seems to be the king here, we have an Instagram to Musical.ly and Dubsmash. enemy. And the enemy that we have is Particularly on smartphones, there’s a kittens! Cat videos cost about 30 cents to huge hunger for video, but can music make, and they can garner a large share make the most of this opportunity? [of viewing time],” said Wilson.

“We’re competing with audio-visual That notion of competition against content every day,” said Dworkin, before non-music video reared its head several delivering a warning. more times during NY:LON Connect.

“The amount of visual assets that labels “Each person only has 24 hours in the create and put into the ether is staggering, day… so how are we competing for those and they are often not ever catalogued or hours in the day?” said Dorothy Hui of available for reuse… so there’s a huge Sony Music during a panel session. opportunity for us to do a much better job Beggars Group’s Wheeler delivered of engaging the audio-visual world... We’re another warning though: that labels should walking around with devices we’re staring think hard before producing a blizzard of at every day, so how can we not be in the video for promotion on digital platforms video business?” that will be making money from it. Some speakers described this as being in “A lot of services, as they’re focusing in on the “media” business instead. The Music more audio-visual material, they’re not Business Association’s Bill Wilson agreed thinking of themselves as music services. with Dworkin’s assessment. They’re media businesses, that’s what they “Shortform video is really the sweet spot. are,” he said. Everybody’s watching TV on the devices in “As a music industry we need to be a little their pocket, and in other markets besides bit careful that we’re seeing all this other our bubble, it’s happening even more,” he

11 extra context ‘stuﬀ’ that people want to put onto their “Each person only services. YouTube it’s bloody obvious because that’s what has 24 hours in the they are. But Apple are doing the media business, Spotify has day... so how are we ambitions in the media business, Tidal… That’s something for competing for those us as an industry to be careful about.” hours in the day?” Dorothy Hui Wilson suggested that labels should still take the risk of investing in video content, and not in an expensive way.

“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,” he said.

“Establishing and understanding the role of the guerilla ﬁlmmaker, that social-media person, the person who’s on the

12 street filming, is a critical part of music 11 ‘Alexa, tell me why the music biz is transforming into a full-blown media so excited about smart speakers’ business.” The success of Amazon’s Echo speakers – Midia Research’s Mulligan agreed that the an estimated 7m sales so far – and their music industry needs to experiment with Alexa voice assistant is getting the music new formats to serve the young audience industry genuinely excited. using apps like Snapchat and Musical.ly. “Speakers and music go together like guns “Millennials and digital natives aren’t one and drugs… It’s yet another swell that will group of people any more. It’s two help connect artists with fans, and drive generations. If you think of the people born consumers to migrate to legal services,” after 2000, they’ve got nothing to do with said UMG’s Dworkin. older millennials,” said Mulligan. “Younger kids on Musical.ly, their idea of music is a There is more experimentation required to 15-second clip that they’re lip-syncing to!” understand how people will access music through voice-only interfaces. “We’ve got an incredibly visually-led world. What Musical.ly does, what Dubsmash “How will finding music change in a does, is they make visual experiences voice-activated environment… when you tailor-made for the devices we carry in our won’t have that same interaction you get pockets… People now expect lean when you look at a screen. Now it’s just forward interactive music experiences.” nothing in front of you. ‘I wanna hear music’. How are we going to push that Long-player purists should look away now: forwards?” said Scott Cohen. Mulligan suggested that changing expectations of young music fans might “You are staring at a blank screen, literally, affect the format music is delivered in. and having to come up with something in your head,” said Wheeler. “We’re looking “Maybe an album needs to be shorter. at the playlists world on a screen, and Maybe it’s unrealistic to try to compete for that’s relatively young – only a couple of 35-40 minutes of people’s time,” he said. years into its development and it’s moving really fast. But already we’re onto the next development!”

13 12 Is blockchain technology doomed to disappoint, or will “Blockchain: DSPs, it make music a $100bn-a-year industry? no beneﬁt. Labels would hate it. The most startling prediction of NY:LON Connect came from Publishers would Dot Blockchain founder Benji Rogers during a panel session. hate it. PROs would “This is the most extraordinary time to invest in music probably love it. Big startups. I think the potential is absolutely huge, because of artists wouldn’t give what’s coming,” he said. “My prediction is we’ll be at $100bn a shit. Their a year as an industry in two years, but it’s going to be really accountants would painful to get there.” hate it” Kevin Bacon How will the industry get there? 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.

14 “If you combined the publishing and the people being happy to be paid performance information into a tradeable cryptocurrency within minutes of their asset, you can make bets based on its stream into their e-wallet, or wait a month provenance, and licensing becomes ten or three months or six months or whatever times faster,” said Rogers. British startup to get something in pounds, or their Jaak, which pitched in a later session at chosen currency.” the conference, is just one of the young companies hoping to help. Bacon was blunt in his verdict: “If we implemented it from top to bottom: DSPs, There was also room for scepticism about no benefit. Labels would hate it. Publishers blockchain technology though. Musician, would hate it. PROs would probably love producer and entrepreneur Kevin Bacon it. Big artists wouldn’t give a shit. Their delivered a four-minute takedown of accountants would hate it.” claims that blockchain can ‘save’ the music industry, offering a mix of technical Will PROs – collecting societies – love it? hurdles and cultural barriers. Graham Davies of PRS for Music offered a cautious welcome, while agreeing that “You would have to look at two to three to some of the challenges for blockchain four hundred DSPs changing their technology in the music world concern the ingestion system to import data which way the industry operates. supports the blockchain format, the blockchain delivery,” said Bacon. “I think it comes from if there’s a better way, people generally start to use that. “We’d have to look at everybody writing There’s been a lot of exploration around their payment / analytics outputs. That how we can improve that data-sharing,” alone would be a phenomenally huge cost. said Davies. Every record company, every delivery company, every aggregator would have to “I think it’s as much process as it is rewrite their delivery systems and their technology and blockchain… I think it’s a data ingestions to make it all work.” really big task, but I think everything from last year is pointing to there’s a lot of “Every PRO to make it work, every desire to make it happen.” publisher, and all the way down the chain. We’d have to go all the way down to

15 13 The power of playlists are raising some new issues for “We’ve got this the music industry and fans alike Catch 22 where a big track gets big The curated playlists on services like Spotify and Apple Music because it’s on lots have growing power to break new tracks and artists – or bury of playlists, and them through lack of inclusion, if the service so desires. when it’s big it gets Meanwhile, the analytics coming back from use of these played more. And playlists is giving plenty of food for thought. Not that this is you’re in the trap of necessarily always a good thing... the same music being played over “The explosion of streaming has created a new kind of risk… and over again” we must be an industry of people dedicated to making great Hannah Overton music, not just music that’s less likely to be skipped,” said UMG’s Dworkin. “I also worry that we will fall into a trap of relying too heavily on data to tell us what is great art.”

16 Other speakers worried about music fans Breakfast Cereal’ is not going to create being potentially overwhelmed with new long-term value in the marketplace,” said songs and artists, to the extent of not Merlin’s Charles Caldas. keeping up with the torrent. “My kids are not going to have posters on “26 new artists are discovered each month the wall saying ‘Spotify’s New Music per user. How are you ever going to Friday is my hero’. That’s not the market remember you even liked something? It we’re moving towards.” has to be a very OCD person that has a system of ﬁling and starring, which I 14 The biggest playlists may not always sometimes employ, to even have that be the most powerful for an artist discovery process be meaningful to an Another aspect to the power of playlists is artist,” said Sony’s Hui. the suggestion that sometimes, it’s not Another point of concern: perceptions that about how many followers they have. Will the biggest tracks are hanging around on Page explained how Spotify’s analytics the biggest playlists for months on end. may help managers puzzle this out.

“We’ve got this Catch 22 where a big track For example, if one playlist has a million gets big because it’s on lots of playlists, followers but 900,000 of them have and when it’s big it gets played more,” said already heard a certain band, and another Hannah Overton, general manager of playlist has half a million followers but Europe for Secretly Group. “And you’re in most of them haven’t heard that band, the trap of the same music being played then the latter might be the best one to over and over again. There’s less room for pitch for. new music to come in. It becomes “Rather than bigger is best, go for the homogenised.” smaller one and ﬁnd yourself 400,000 new Some speakers suggested that the power fans. I can see that kind of dynamic of playlists – certainly compared to the entering music industry dynamics now,” appeal of musicians and great songs. said Page. “This notion that we’re going to spoon-feed people amorphous blobs of music under the titles of ‘My Favourite

17 15 Apple Music fields indie criticism “It’s getting more and more difficult now,” she said. “We’re okay, because we have Apple Music had a big independent those personal relationships, but the success in 2016 with its partnerships with independent music industry is going to be post-Universal Frank Ocean and then suffering as a whole.” Chance the Rapper. But Secretly Group’s Overton suggested that Apple has work to 16 Broken links, mobile-unfriendly do if it wants to prove itself a friend to the sites... music marketing’s mistakes wider independent labels community. Communion Music’s head of digital Claire “They’re recruiting incredible music fans to Mas delivered a bracing wake-up call for do their genre playlists. On the ground music marketers, suggesting that basic level they’re brilliant and very supportive of mistakes still afflict many campaigns. independent artists,” she said. “But further up at the top level of Apple, they don’t give “We tend to be like ‘Hey, you know the a shit about independent music. That’s poster we used that’s supposed to be where you see the Apple Music festival A2-size on a wall. We’re going to take it having no independent artists [headlining] down to this small and use it on all digital there at all last year.” platforms Facebook has been around 10 years, and 90% of promoters have never “In order for Apple to stay relevant and an changed the tour poster!” said Mas. exciting service for people to listen to, they need to keep their eye on the prize of who “If you’re good at social media, you get a is going to change future music,” said lot of free views. If you’re bad at social Overton. “It’s not going to be Elton John! media, you have to pay for them. Of He did back then [in the 1970s] but they course you do. Facebook is not an NGO. need to find the next Elton John.” Somehow there’s this arrogance about us,” she continued. However, Overton also said that some independents may be finding it harder to “The number of times i have been sent a break on to Spotify’s big playlists, if they draft email where the links don’t work. do not have direct personal relationships People complain about ‘there’s no money with its curators. in music’. Have you tried clicking on your links on your phone? I can’t buy your

18 tickets! Or look at the number of big artists’ websites that do “If you’re good at not work on a phone. Big major labels, million-dollar brands... social media, you get where their website just does not work on the phone.” a lot of free views. If you’re bad at social Mas also criticised artist exclusives on streaming services, media, you have to suggesting that such deals are bad news for music fans. pay for them. Of “Honestly, we spend so much time trying to tell people that course you do. [subscription] streaming is better than free because you can Facebook is not an listen to everything you want to hear now… and people are NGO.” just ruining it for the entire industry,” she said. Claire Mas “If you want to listen to the top ten albums of last year in one place, there isn’t one place you can do that. That’s just a terrible user experience. And we’re all pushing one another down: when people have a bad user experience in music, it hurts all of us.”

19 17 American independent bands find a the UK economy thus far… For all the friend in ticketing app Dice doom and gloom that’s said in the press post-Brexit and post-Trump, I can’t really A quick but useful point from the NY:LON find the doom and gloom in the evidence.” Connect marketing session: ticketing app Dice is helping some fans build a buzz far What’s the relevance to digital music? from home. “We found Dice really great for Page suggested that streaming services helping us launch new artists. When we’ve like Spotify have done well to grow their had new American artists come over for businesses in tough economic times. the first time, for example, Dice have been “Spotify and many other services were able to put on free shows, and use their born in 2008, and over the next five years database to have queues of people and we’ve shown amazing scale in a tough waiting lists, and make those first shows economic climate,” said Page. “How far really exciting,” said Overton. “We find can we now go given the economy is now them really good. It’s a new platform, and in full swing?” it’s growing.”

19 Brands cause stir with sync demands 18 Could Brexit and Trump really have an economic silver lining? Should brands get a share of publishing royalties for songs used in campaigns? The UK is Brexiting from the European Union, and Donald Trump is the president Synergy Group’s Arnon Woolfson cited the of the United States. Both have sparked example of a brand/artist deal where the concern and anger, but Spotify’s Page ad agency’s creatives “had input” into the chose to buck the trend by claiming that lyrics: for example by suggesting certain the economies of the US and UK are slogans to include in the song. actually holding up well. “In that situation I see potentially a “We’ve got business investment holding legitimate reason for the brand to earn up, then a big devaluation of the from the publishing,” said Woolfson. “You currency… that’s broadly speaking good,” could question the validity of someone said Page. “Contrary to what the doom earning from publishing when there’s been and gloomers out there say on Brexit… it’s no input. a good-news story. I can’t ﬁnd bad news in

20 20 Labels and startups: better partnerships in store “The heartbreak starts to kick in “From a legal perspective, the two big obstacles for any music where the developer startup that license music are punitive advances… and MFNs says ‘I wanna just [Most Favoured Nation clauses]. If you have two very engaged pay everybody, so if I labels who believe in your product, and one that doesn’t and make £100 can I give gives you a very onerous deal, with MFN’s you’re lumbered everybody £70 with the worst deal.” proportionally?’ And Reed Smith partner Sachin Premnath was blunt in his I said no, because appraisal of the pitfalls for startups negotiating to get licences you’ve got to talk to from music rightsholders. 800 people…” Benji Rogers Benji Rogers provided his own downbeat anecdote, courtesy of a friend with an inventive iOS app that could have used music.

21 “He didn’t know who to go to at Universal, Music Ally contributing editor Stuart or what PRS was. No concept of it… What Dredge gave a talk to introduce that happens is, the heartbreak starts to kick in session, outlining some of the reasons for where the developer says ‘I wanna just pay pessimism around the music/tech startups everybody, so if I make £100 can I give landscape, but also some of the everybody £70 proportionally?’ And I said encouraging trends. no, because you’ve got to talk to 800 people to make that happen,” said Rogers. Among the latter: the potential to widen the net for the startups that music “It’s a very hard industry to be successful rightsholders work with; genuine in. A lot of that sets up this false partnerships to figure out the implications dichotomy where labels and startups are of new technology like VR and AI and a pitted against each other in this fight over pipeline of startups developing useful tools who controls how content should be used, for marketing music and understanding and who decides which models should be fans. allowed,” added Ben Bowler of MusicUp, before delivering a more positive message. There is also a flurry of new music accelerators and the potential for “I think changes are happening. There is industry-based funding and even more interest in openness and supporting equity-crowdfunding; the fact that 2016’s schemes. [Accelerator] Abbey Road Red is big app craze Musical.ly had music at its run by Universal, and there is interest in heart; and the likelihood of the growing other majors I talk to to support that digital scale of streaming platforms like Spotify innovation category.” and Apple Music fuelling a new wave of developers and apps. The NY:LON Connect startups panel also considered funding, with Premnath You can read the full speech here. advising startups not to assume that institutional-capital path is the only way.

“You could also question whether music startups need investment,” he said, citing Mixcloud as an example of a music startup that has been entirely bootstrapped.

22 21 Talking of inventive music-related startups... “Blockchain isn’t a database, just a way Six UK-based startups pitched their wares at NY:LON to move containers Connect, to a warm reception from the audience. around. It’s a The Bot Platform is a service for labels and managers to protocol: a way to create and run Facebook Messenger bots for their artists. design rulesets” “Axwell / Ingrosso have got a Messenger bot, they’re shifting Vaughn McKenzie over ﬁve grand a month of merchandise through Messenger… All they did was post to their fans on Messenger saying they have a new cap out,” said founder Syd Lawrence. “We see about a 99% read rate, and anywhere between 15% and 45% click-through rate.”

London startup Mbryonic works with artists and brands around technologies like virtual reality. “It allows you to immerse yourself in the world of the artist… and an

23 opportunity to create new revenue streams connected to that streaming network,” that audiences will be perhaps willing to said founder Darrel Sheinman. “Assume all pay for,” said founder Tom Szirtes. “Why the turntable manufacturers have some go to the expense of staging a gig… when sort of API that captures this, and it will you could stage an entirely virtual gig. come into our database.” Imagine going to see a rock band on top of a mountain with fire-breathing dragons Rotor is a tool for creating promotional overhead…” videos for musicians, explained co-founder Diarmuid Moloney, who Jaak is one of the clutch of startups showed off one example that “was created exploring blockchain technology and in 20 minutes, for £20” by an emerging music. “Blockchain isn’t a database, just a independent artist called Rauzy. Prices way to move containers around. It’s a range from $10 for a 360p watermarked protocol: a way to design rulesets,” said version to $60 for a 4K version with no founder Vaughn McKenzie. “It’s just a way watermark, with Sony Music, Warner to design things that can work exactly how Music and Universal Music all having used you want them to. We have a way of the service. It could find a decent niche in capturing metadata and then linking it to making lyric and pre-release videos, ahead the actual media file, and then linking that of official videos later. to a smart contract: a mini-API that sits on top of a blockchain. It’s business logic, in Tido is a startup focusing on classical an app.” music and education, with two apps available so far helping people to improve Independent label Gearbox Records their piano skills – one released in showed off its Gearbox Automatic partnership with Faber Music and pianist turntable, which comes with technology to Lang Lang. The app was featured recognise what’s playing, and then find it prominently in Apple’s App Store, and did on a streaming service and save the tracks well, but it’s a step towards the to a playlist. “The next step we want to longer-term vision of the main Tido Music make is to sell the APIs to all other app, which launched in late 2016. “This is turntable manufacturers… what do we a platform product, open to everyone, have then? A huge database of vinyl we’re going to be adding new content listeners, who at the moment are not partners throughout 2017.”

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