the REPORT Issue 317 | 17 April 2013 The disruptors The music business has traditionally feared disruption, only wanting changes that it itself has introduced. Digital has ended all that and, since Napster in 1999, outsiders have disrupted pretty much every part of the business – some with good intentions, others with less altruistic ambitions. That disruption is reaching a head of steam in 2013 so we pick the 40 things that are currently pulling the music business inside out, turning it upside down and preparing it for the future. DISRUPTORS: 40 THINGS CHANGING MUSIC FOREVER the REPORT | 17 April 2013 | Page 2
Contents:
Backplane PAGE 3 David Lowery PAGE 7 BUBBLING UNDER… Bandcamp PAGE 3 Matt Mason PAGE 7 Absolute Radio Alibaba Len Blavatnik PAGE 3 Messaging apps PAGE 8 BandPage / J Sider Bristol musicologists PAGE 3 Martin Mills PAGE 8 Bob Pittman (iHeartRadio) CASH Music Troy Carter / Scooter Braun PAGE 3 Moshi Monsters PAGE 8 Daniel Glass Chirpify PAGE 4 Muve Music PAGE 8 David Bowie Elias Roman (Songza) Chromatik / Tonara PAGE 4 Pitchfork PAGE 8 EvntLive Eddy Cue PAGE 4 Amanda Palmer / Alex Day PAGE 9 Facebook News Feed Ime Archibong (Facebook) Drip.fm PAGE 4 PledgeMusic PAGE 9 INDmusic Earache Records PAGE 5 Pulselocker PAGE 9 MusicQubed MusiXMatch The Echo Nest PAGE 5 Red Bull Amplifier PAGE 9 Oleg Fomenko / Bloom.fm Jamal Edwards PAGE 5 Rdio / Vdio PAGE 10 Samsung StageIt Fame House PAGE 5 Ian Rogers PAGE 10 Tencent – QQ Ford PAGE 5 Scandinavia PAGE 11 Tumblr TuneIn Groovy PAGE 6 Songkick Detour PAGE 11 Vkontakte Hackers PAGE 6 Sonos PAGE 12 X5 Music Xbox Music Indian streaming services PAGE 6 Soundrop PAGE 12 Jelli PAGE 6 Tomahawk PAGE 12 WHO HAVE WE MISSED? Obviously we can’t cover every disruptor, but if The Kleek PAGE 7 Twitter PAGE 12 you feel there are ones we have missed, send in Label services PAGE 7 UKF PAGE 12 your suggestions (and reasons why) and we will publish the best on the Music Ally website. DISRUPTORS: 40 THINGS CHANGING MUSIC FOREVER the REPORT | 17 April 2013 | Page 3
Disruptors: 40 things changing music forever Backplane role for other users. This move towards giving bands and consumers an emotional The social media platform has a major Troy Carter / Scooter Braun investment (more than a commercial one) endorser and investor in Lady Gaga and in the platform is where it really has the We can see eyes rolling at the headline on approach. And not just rival managers, as has also managed to sign up Guns N’ potential to create a new type of retail. this one. Of course Troy Carter and Scooter Braun’s post as entrepreneur-in-residence Roses. Gaga’s Little Monsters site opened Braun are innovative and disruptive at Universal Music Group shows. “I basically publicly in July 2012 and by August she had individuals. When you’re managing Lady Len Blavatnik connected people with the big-dog record attracted half a million fans to it. She still Gaga and Justin Bieber, you’ve got the clout label so they could have a real, open, honest has a presence on Facebook and Twitter (of The Russian billionaire is building up quite the and the cash to be as disruptive as you dialogue,” he told Billboard this month. course), but Backplane is something she portfolio in music. In 2011, he bought Warner like, whether it’s investing in technology can control and own (especially in regard to Music Group, adding Parlophone to its labels startups or giving Björk a run for her money Braun is the first manager we know of to with album-as-app ambitions. run his own startup incubator – Silent Labs data and analytics) in a way that she (and the earlier this year. But where it gets more – while Carter was one of the first major other artists she is hoping to attract to sign interesting is in what he is doing with digital. Still, in an era when music managers managers to throw his weight behind up) can’t on the other social media giants. It His company Access Industries is now a major are increasingly aware of the need to be streaming music services, appearing on- has just launched its new smartphone app investor in Deezer and it has also taken a hands-on when it comes to social media stage at Facebook’s f8 conference to say at the start of April and, with mobile-first in stake in Daisy, the imminent streaming music and digital opportunities, Carter and Braun “What we’re looking to do is not just about mind, this could prove a weakening of the service from Beats that arose out of the ashes remain inspirations to many for their selling the CD or the digital file. It’s how many Zuckerberg stranglehold on social music. of MOG. Add into this the fact that Warner people can we get the music to. How many in Europe has an equity stake in Spotify and people can experience it?” Bandcamp it’s clear that Blavatnik is making a spread The two men’s Midas bet on a variety of digital services. It might In many ways Bandcamp is the realisation touch isn’t infallible – even strike some as a kind of VC schizophrenia, of what MySpace (by which we mean the the recommendation of but it could equally be seen as a need to have original MySpace) was trying to do almost a Bieber wasn’t enough a diverse and highly competitive streaming to make app startup decade ago. It has also taken the In Rainbows market to raise the stakes and accelerate the Stamped take off – but ‘pay what you like’ model and retooled it race into the mainstream. their truly disruptive effect for smaller acts instead of multi-platinum will be the next wave of global superstars. Add into this some of the Bristol musicologists tech-savvy managers elements of Topspin (allowing physical and following their example in digital to be sold side-by-side – but, again, Back in October 2011, we were taken aback by the year or two ahead. with a bias towards the grassroots) and you a feature called Mix Radio in the Nokia Music have a very potent combination. It has just app that shipped on its first Windows Phone added stronger discovery tools and, at the smartphones. Why? Because, without fanfare, won praise for its curated mixes of tracks. headlines, Nokia deserves credit for getting start of the year, moved to make the most of Nokia had made a Pandora-style personal That’s where the musicologists come in: in early. The challenge now is to sell more and its inherent community dynamics by letting radio app and launched it around the world. Nokia’s Bristol-based team of professional more smartphones so that more people can users of the site show what music they are Since then, Nokia Music has spawned a paid playlist creators. In 2013, where the idea hear the musicologists’ handiwork. buying so they can take on a recommender version – Nokia Music+ – while Mix Radio has of curated, contextual music is making DISRUPTORS: 40 THINGS CHANGING MUSIC FOREVER the REPORT | 17 April 2013 | Page 4 continued…
Chirpify Chromatik / Tonara Drip.fm The phrase ‘Twitter-commerce’ makes a lot Many iPad music apps flatter to deceive: of people roll their eyes in buzzword-derived high on whizzy bells and whistles, lower on Subscription services don’t have to be exasperation, and often rightly so. Chirpify actual impact and revenues. But iPad (and generalist, selling themselves on how many deserves more consideration though. tablets more generally) have considerable millions of tracks are in the catalogue. They can be much narrower and, in a way, Surfacing in early 2012, the startup started potential to shake up the sheet music market. eMusic was the start of that – focusing on as a way for any brand (or band) to sell Chromatik and Tonara are two of the best just indie label content (although the major goods or content to their Twitter followers examples we’ve seen so far. Chromatik label deals that followed pulled the rug via tweets – as long as those followers were raised $1.1m of seed funding in May 2012 and from under that somewhat). also signed up to Chirpify and connected bagged a deal to be used by American Idol’s their PayPal accounts. It raised $1.3m in house band; Tonara, meanwhile, has been Drip.fm is the natural result of a move April 2012, rode the Amanda Palmer D2C selling scores to tablet-toting musicians since to super-sell to a niche – allowing artists bandwagon that August and then worked September 2011, raising $4m in August 2012. or labels to build subscriptions around existing webstore, with Drip users receiving with Green Day on a high-profile MTV VMAs Chromatik’s potential is for teaching music, themselves. It secured a nice coup in the discounts to buy physical products direct UK when it signed up Domino to be its from the label. offer. Expansion to Facebook and Instagram while recording and sharing musicians’ first significant label partner in the UK. has followed, putting Chirpify in a good sessions. Tonara adds an in-app store for Launching last summer, Domino Drip Not every label has the catalogue or the fan position to capitalise – if social commerce has scores. Both hint at more innovation to quickly attracted around 1,000 paying loyalty to be able to do this, but for those legs. The disruption isn’t just for traditional come in this app genre as well as new digital subscribers, all handing over $9.99 a month that do, Drip.fm offers a whole new twist music retailing, though: it’s for Twitter and income streams for publishers. to get a steady feed of downloads (new and on subscription that can generate more Facebook, which have their own e-commerce old). significant revenues than the granular ambitions. payments from streaming services. Plus, In February this year, Ninja Tune followed and this is the crucial disruptive element, suit and set up a Drip account for its Big lets them really control the fan and retail Dada imprint, with a monthly subscription relationship in a way that wasn’t possible of $12. This was treated as an adjunct to its before.
Eddy Cue he’s overseeing the negotiations for, and launch of, Apple’s long-rumoured streaming Eddy Cue? Who he? Ah, yes, the boss of music service – initially focused on personal all things ‘content’ at plucky technology radio, but with potential for full on-demand startup Apple. Who knows if they’ll ever go access on the horizon too. Very few anywhere… OK, so Cue is a big, established companies disrupt their own businesses as figure working at a 900lb gorilla in both the enthusiastically as Apple – iPod to iPhone and music and tech worlds. But we’ve included MacBooks to iPads being the two obvious him in this list because, in 2013, Cue’s job is cases. One of Cue’s many tasks now is to do disrupting Apple’s own business. Specifically, the same for iTunes. DISRUPTORS: 40 THINGS CHANGING MUSIC FOREVER the REPORT | 17 April 2013 | Page 5 continued…
Earache Records Rosetta Stone project that collates a variety of different music databases for developers There’s no reason why metal would be a to tinker with and create not just whole new musical genre less ripe for digital innovations apps but also whole new app categories than any other, but it’s true that many for music. Its disruptive power comes from independent metal labels in particular don’t the inclusiveness of being all things to all shout about what they’re doing digitally. They services. just do it. Earache is trying some experiments worth shouting about, though. Witness Jamal Edwards its Metalizer app on Spotify, launched in January this year as an attempt to provide Looking for the future of music television? “the greatest metal music discovery tool” You’re as likely to find it on YouTube as for metal veterans and newcomers alike. on your actual telly, with SB.TV one of the Founder Digby Pearson has also spoken out growing number of ‘original’ YouTube on streaming’s impact on iTunes sales – “no channels focusing on music. It’s not new, obvious dent” – while hailing the popularity of mind. Founder Jamal Edwards launched Metalizer as “a vindication that the streaming SB.TV as a teenager back in 2007, and has music world doesn’t just revolve around since grown his channel to nearly 315k X-Factor pop artists or the indie scene so subscribers and 165m total views, focusing beloved of hipsters”. on an audience of 13-30-year-olds. SB.TV Marketing company Fame House, however, is also acting like a music channel rather Ford has looked at things very differently and than a collection of individual videos. It In 2013, every digital music service wants The Echo Nest instead of seeing what many regard as a recently introduced three new shows on a to be more closely integrated into cars, and The Music Hack Days events have been threat, believing that it, if thought about traditional schedule, airing every weekday every carmaker wants its own apps platform running since 2009 and the partner platform and engaged with correctly, can be an at 3pm and 8pm to catch school-leavers and well-stocked with digital services for drivers. at the very heart of many of the hacks that opportunity. And rather than talk about the then commuters (while also providing focal Ford is one of the few examples of the emerge is The Echo Nest. It is also involved hypotheticals, it has put its money where points for social buzz). Grime artists – and latter that seems to be getting real traction, in label-driven apps such as EMI’s Blue its mouth is, working with artists such as DJ Ed Sheeran, who was first spotted on SB.TV – both with drivers and services. Its Sync and Note subscription app and worked in direct Shadow, Billy Van and Pretty Lights to offer know about Edwards’ influence. More music AppLink initiatives were early to market – partnership with music services such as music for free (in partnership with BitTorrent) industry folk will as 2013 goes on. and are rolling out beyond the US this year. Rhapsody. Its disruptive nature comes from and monetise it through sponsorship or Partners include Pandora, iHeartRadio, the fact that its music intelligence on 30m knock-on sales for tickets. A dance with Fame House Rhapsody, Slacker and Spotify, with an open songs (from bpm to tempo and mood) is so the devil? Maybe. A short-term marketing mobile developer programme and ambitions all-inclusive that it can become a part of any BitTorrent has long been a word to strike gimmick? Possibly. But trying to disrupt a to get rival automotive firms to adopt new service. It’s, in many ways, the Zelig of fear in the heart of the record industry, disruptor like P2P and torrenting has to be its platform too. If successful in that aim, the new digital music future as it covers so regarded as one of the biggest enemies worth something. AppLink could have a genuinely meaningful many bases. Key to its growing ubiquity is its of a viable and profitable digital business. impact for music in the years ahead. DISRUPTORS: 40 THINGS CHANGING MUSIC FOREVER the REPORT | 17 April 2013 | Page 6 continued…
Groovy for Android (an iOS one is in the works) is a credits-based music service with 1m tracks at sees 80% of its traffic via mobile). “India is Japan is now, in overall revenues, the equal Indian streaming services launch. Users either buy or earn credits (for one of the fastest growing music industries of the US (each with a 27% share of the global With a population of 1.2bn, India is a inviting friends to sign up, for example) to in the world in terms of revenue and the market); but when physical and digital are music market with huge potential and the be able to listen to songs. It is still, compared population – not just within India, but separated out, it is clear that the country still streaming services that have emerged from around the world with the Indian diaspora,” to the West, very early days for digital music the country so far are powering forward and has to move on significantly from the CD and Shazam’s director of music and content Will in Japan so anything that can help push this helping to map out a new future there. While build up the digital side of its business. Digital Mills told us at the start of April. “And Saavn along – and to do so without trying to create it ranks globally at number 22 in terms of only accounts for 17% of total revenues in the are very much the leader in this space.” a poor relation version of iTunes or Spotify physical revenues, it is number 9 in terms of country and social gaming company DeNA and with a solid mobile-first strategy – is to be digital. Indeed, 60% of the domestic market The Indian mobile music market is proving is hoping to push Japan towards some sort is digital and these revenues have been welcomed. very robust, with Dhingana securing $7m of digital tipping point. Its new Groovy app powering ahead in recent years. Back in of investment last year and announcing in 2008, digital brought in $23.5m in revenues January that its app had been downloaded and by last year this had leapt to $88.4m. 3.5m times (and that the service overall has Hackers So yes, labels working with hackers/ 15m monthly users). In the same month, the developers/coders (choose your term of Mobile is the key driver of digital income Gaana service in India launched apps for Hackers disrupting the music industry? choice) isn’t new. What’s exciting is the fact in India (accounting for 47% of all digital Android, iOS, BlackBerry and Java, aiming to This is old news. The first Music Hack Day in that in 2013, they’re perceived as much more income) and the new breed of services use mobile to build on its 3m monthly users. London took place in July 2009, and there’ve than codemonkeys doing work for hire. reflect that. since been 30 more around the world. They’re not foils for the creatives handling While the international focus on digital digital grunt work – they ARE the creatives, or Saavn has just signed a partnership deal services has been on the West (iTunes, Meanwhile, some of the leading lights in rather the creative partners. with Shazam where the latter will ingest Spotify, YouTube, Pandora), what is those events have been working with labels 1m tracks from the former’s catalogue for happening in India right now is hugely and artists on high-profile apps and website Many Music Ally readers won’t be surprised its fingerprinting database. The music exciting and these services will start to projects, while the OpenEMI initiative by this, but it’s worth remembering how recognition service sees huge potential significantly expand their global reach in the represented a focused attempt to bring outlandish this prospect would have seemed in India, hence its deal with Saavn (which next few years. startups and developers through the front in, say, 2009 when that first Music Hack doors of a major label to work together. Day took place. It’s also true that the music Jelli industry has gotten over its expectations last year it had snagged 70 US stations and that Hack Days are places to find the Next Big Last.fm and Pandora have been key at raised $16m in funding. It has been a slow, Music Startup. They’re places to find talented people fizzing with ideas. chipping away at the relevance of lean- but steady, build for Jelli and that may work back radio in the digital age, but it is Jelli to its favour, proving itself in the complex US 2013 feels ripe for another step on, though: that perhaps best shakes up the broadcast/ radio landscape on a region-by-region basis, hackers working not just with the digital audience relationship. Launching in 2009 not growing too fast and overreaching itself, marketing teams at labels, but directly with on the KITS station in San Francisco, it gave all the while giving radio listeners a tool and a artists. Imogen Heap at a hack day was an listeners a significant say in what music is power they never knew they had or needed. outlier – developers working with musicians played on participating stations, voting tracks As a disruptor it’s less a tornado and more much earlier in the creative process on a regular basis would be genuinely exciting. up or off the playlist. In 2011, it was extended a blowtorch on an ice block and that, in the to two stations in Vegas and by October long run, may prove the best strategy. DISRUPTORS: 40 THINGS CHANGING MUSIC FOREVER the REPORT | 17 April 2013 | Page 7 continued…
The Kleek moving into. There may be problems for Palmer in 2012. More recently, Kobalt Label artists and digital music for some time now; indies (especially as, post-EMI, Universal bulks Services has been making a name for itself from a February 2012 SF MusicTech speech It is worth remembering that iTunes did not up), but The Kleek is licensing in other label with its work for Nick Cave, and a recent deal slamming “parasitic entities” in the digital launch in South Africa until December last content and creating opportunities where to sign the Pet Shop Boys. The point: artists ecosystem, followed by a critique of the year – almost a decade after it launched in the previously there were none. might not need labels, but they still need “failed state” of digital entertainment. By US. So the fact that Universal has partnered the services labels provide, whether those December 2013, Lowery’s call for action to with Samsung to bring The Kleek, a (for Label services services come from management companies, cut off the “low-hanging fruit” of revenue now) free mobile music service, to Africa is labels or companies from other areas (like streams for piracy sites, while naming and a significant move to ride the music wave Labels are dead! As people have been saying Kobalt’s stomping ground of publishing). shaming brands that advertised on them, was of an emerging market. Merlin has attacked for a good five or 10 years now, without ever serving as a call to arms. Lowery isn’t a digital Universal’s move here, saying it is unhappy being proved right to the point of needing to David Lowery Luddite, though: a January 2013 interview about a label becoming a digital service that send out invitations to the wake. Better to say showed his more nuanced attitude. “My only can control and profit from indie content. labels are evolving, perhaps? Because a trend There’s a growing debate about ‘brand- criticism of Spotify is that the rates right now There was, however, no mention of the fact that’s been emerging for some time now is sponsored piracy’ in the US, with David are too low. It’s entirely possible that it scales that Universal is putting its money where its the idea of label services, which may or may Lowery perhaps having done more than and we get a better rate.” mouth is and trying to bring a mobile music not be provided by labels. Cooking Vinyl are anyone to spark it. In fact, the Cracker and service to Africa, a continent that until very veterans at this, from a worldwide deal with Camper Van Beethoven musician has been Matt Mason recently no service would countenance The Prodigy in 2007 through to Amanda a prominent voice in the debates about Matt Mason first came to our notice as the author of The Pirate’s Dilemma, a sparky book about the relationship between youth culture and modern technology. Conference appearances confirmed him as someone who couldn’t be written off as a piracy apologist or technology zealot. It’s his more recent role as executive director of marketing at BitTorrent that’s seen Mason make waves in the music industry though. He’s at the forefront of the company’s partnerships with artists including DJ Shadow, Alex Day and Pretty Lights, as well as authors like Tim Ferriss. The jury is still out on how BitTorrent giveaways generate income elsewhere for artists, but Mason’s work is providing partners with first-hand data on the possibilities. DISRUPTORS: 40 THINGS CHANGING MUSIC FOREVER the REPORT | 17 April 2013 | Page 8 continued…
Messaging apps yet to publicly replicate. He set his sights even probably even Spotify (still not making purposes, a genre. The Chicago company higher in January at Midem, windmilling into its US numbers public). Despite being the was an early adopter, launching way back The figures tell much of the story around Google, Apple, Facebook and more over their eighth biggest carrier in the US with 5.3m in 2005 when the print titles were drunk on why a new breed of messaging apps should tax arrangements and the need to protect IP subscribers, it has managed to bundle its the Nineties magazine boom, thinking the be of interest to the music industry. Line has (and its investors) online by kicking against music offering to over a quarter of them. good days would never end. It has steadily been downloaded 110m times. WeChat has governments being seduced by what he The next step is to expand Muve Music as a built up a huge daily readership and is the 300m subscribers. Kakao has around 82m. sees as the solipsism of the new technology managed service for other operators in other place where so much music (albeit within WhatsApp processes 18bn messages a day. industries, all done in “the name of open markets (Brazil being the first), with lots of certain genres – namely indie rock and a These apps have grown like weeds in the Internet philosophy”. rumours of other imminent launches. With certain amount of hip-hop) breaks first and last two or three years, and are causing many big operators washing their hands of breaks hardest. It has already expanded head-scratching and brow-furrowing within Moshi Monsters music in exasperation, Muve is proving there into festivals, but digital is its heart and Facebook, Google, Twitter and other big tech is potential here if you go looking for it. this is illustrated nowhere more aptly than Yes, that’s right: the brand behind those companies – not to mention twitching in their its creation of Pitchfork Advance, its own magazines and merchandise that an acquisitions teams. What does all this have to Pitchfork platform for early streaming of new releases. increasing number of parents are shelling out do with music? Not much… yet. Which is why These are the cornerstones of a new music for as part of their weekly shop. As a virtual Need an idea of how big it actually is? The we think artists and music companies should press empire. world for kids, Moshi Monsters is hugely term ‘Pitchfork’ has become, to all intents and be exploring potential partnerships with popular, with more than 60m registered users these apps. and a host of spin-offs. Those include music, initially with success on YouTube through Martin Mills parodic character Lady Goo Goo. One lawsuit Long the spokesperson and conscience from Lady Gaga later, Moshi Monsters of the indie label sector (he was key in the and its parent company Mind Candy were establishment of AIM, Impala, MI2N, WIN undaunted. A spin-off album called Music Rox and Merlin), the past year has seen him was released in April 2012, and with no radio significantly shift the agenda in digital music airplay went gold in the UK by Christmas, in terms of the relationships labels have with representing 100k sales. As a music brand for both artists and the digital behemoths who children built from scratch below the radar of are trying to seize the reins. In the midst the traditional industry, that’s not bad going. of artist complaints about low streaming royalties and the obfuscation of NDAs, Mills Muve Music very publicly announced that all royalties While Deezer has focused on its huge Beggars Group gets from sound recording partnership with Orange in Europe, Cricket’s streaming would be split 50/50 between the Muve Music in the US has been quietly label and the artists (adding that most acts on building to 1.4m subscribers. That puts it his roster now make more from streams than ahead of incumbents like Rhapsody and downloads). This is a move the majors have DISRUPTORS: 40 THINGS CHANGING MUSIC FOREVER the REPORT | 17 April 2013 | Page 9 continued…
PledgeMusic 24m-strong market of amateur and pro DJs to aim at, and intentions to share data Amanda Palmer / Alex Day Kickstarter might grab all the headlines for on what’s being played where with labels good reasons (Amanda Palmer) and bad If there’s a problem with Amanda Palmer and artists, Pulselocker has potential, even (Björk), but PledgeMusic has quietly been and Alex Day, it’s the way they get seized if it will inevitably face questions about building a name for itself as a place where upon by D2C evangelists keen to prove a cannibalisation of existing track sales. acts at a certain point in their career (either point. Perhaps most intriguing is the prospect of out of contract or dropped) can have a Pulselocker integrated with the new wave of So, Amanda Palmer is Sticking It To The second bite of the cherry. While the platform’s DJing apps, such as Traktor DJ. Man and Heralding The Death Of The Label intention is not to bad mouth or undermine (when, in fact, Cooking Vinyl’s label services the traditional label structure, it does – by Red Bull Amplifier arm played a significant role in her last default – expose the flaws in the model album’s distribution). when acts stay at or slip back from a certain When it’s not flinging skydivers from the Meanwhile, Alex Day is The Kid Whose sales point. Previously such acts would have edge of space, Red Bull is very active in the Album Outsold Justin Timberlake’s (even been seen as toxic or damaged goods, but music business, with digital increasingly though the screenshot that sparked these the smartest Pledge campaigns show that a priority for the brand. It’s been releasing claims was taken from Apple’s iTunes not only do they retain fan engagement but music through its Red Bull Records arm since store at a specific moment in time when they can also harness it to become truly 2011, but what’s disruptive from Red Bull in Timberlake’s album was still on pre-order). autonomous for the first time. The challenge 2013 is its Amplifier startup accelerator – one It’s a crying shame, because Palmer and will come when an act gets to their 10th of the first such programmes aimed at music Day ARE both disruptive forces within album and still has a fanbase large enough to startups, and coming from a brand. Red Bull the music industry, setting an example for fund them; but for the meanwhile it’s holding isn’t (yet) investing money in these startups. other artists – not to follow their respective That’s also the secret behind Alex its own. Instead, it’s promising a “creative partnership” templates of crowdfunding and YouTube Day’s ability to fund his music making that will plumb them into its existing music stardom, but instead to explore and through YouTube and iTunes sales, while experiment with lots of emerging digital eschewing label deals or even physical Pulselocker and non-music networks. The deadline for entries is 22nd April, so it’s too early to judge opportunities and to find their own path. gigging. Many of the videos on his YouTube We try to be wary of slapping a ‘The channel aren’t music – which is exactly the the calibre of applicants or the benefits they’ll Spotify for…’ tag on any new service, but in Yes, Palmer raised $1.2m on Kickstarter, but point. The young fans who have grown get from the scheme. But with companies in Pulselocker’s case, describing it as a Spotify the hard work came in the years leading to know him through his videos are also other media and entertainment industries for DJs is as neat a one-line pitch as you can up to that, as she attracted and engaged supporting him by buying his music. running their own accelerators, Amplifier find. Currently an invite-only beta in the US, with hundreds of thousands of fans by, could provide a template for labels to iterate Canada and UK, Pulselocker plans to charge well, by being herself. This wasn’t social So, Palmer and Day are both examples of on. media expertise in action: it was people artists forging their own paths outside the between $9.99 and $59.99 a month to DJs connecting to one another. label system; but if there’s a rousing call to for its subscription-based service, with a arms here, it’s for artists to reach out more to big catalogue of electronic music available their fans rather than to dump their label. to stream and download – the latter option is what DJs will pay for, obviously. With a DISRUPTORS: 40 THINGS CHANGING MUSIC FOREVER the REPORT | 17 April 2013 | Page 10 continued…
Rdio / Vdio Ian Rogers Rdio and its new sister service Vdio aren’t once the necessary licensing hurdles have Ian Rogers has an inarguable CV (AOL He’s someone who’s never been afraid to included in this feature for reasons of scale. been jumped. Music, Topspin) and now the hopes of criticise the music business for its (many) Rdio has studiously avoided announcing the Beats empire rest on his shoulders as failings – but this is always done with well- any stats on its active users or subscribers The idea of unified, access-based he takes over the soon-to-be-launched considered suggestions (or implorings) since its launch in 2010. subscriptions for digital entertainment Daisy service that will meld subscription for what it should do instead. He implicitly is one whose time may come a few streaming with D2F retailing. understands the fan/artist connection and It didn’t even register on NPD Group’s recent years down the line, but it’s surely what this is something his career has been built survey of US 13-35-year-olds about what technology giants like Apple, Amazon Much is made of the fact he’s a skateboard around harnessing more fruitfully. In a way, streaming music service they use, while Google, Microsoft and Sony are thinking fanatic that “stumbled” into the business he’s the niggling conscience of the music social metrics site AppData claims Rdio hard about already. by building a Beastie Boys fansite that industry – telling it that it can do better than globally has more than 50k daily active the band asked him to develop and then this, that it’s missing things – but with a view Facebook-connected users and more than Rdio and Vdio might be minnows in that became their digital sounding board/ towards making things better for everyone 500k monthly active Facebook-connected context, but they’re early into the space. evangelist/architect. But he’s a lot sharper (music companies, artists and fans). It’s in users. Rdio has also been providing food for and a lot more visionary than this trying to meet the needs of all three (whose thought for Spotify and Deezer with the caricature would suggest. interests are often antagonistic) that he is at Meanwhile, Vdio only launched in early quality of its mobile apps – a role Vdio his most disruptive. April as a “special preview” in the US and may also perform for Netflix – as digital UK for paying Rdio subscribers. Both, in services move towards a more mobile-first His video series (This Week In Music) other words, are niche services. development strategy. has also been essential viewing as he conducts long-form interviews with not It’s what they just the most interesting new companies represent that’s but also the biggest names in digital disruptive, certainly music. for standalone digital services in With the launch of Daisy coming, 2013 the music space (like will be a big year for Rogers and the real Spotify, Deezer and acid test of if his vision can move the Rhapsody) and the needle – not just a bit, but significantly. TV/films space (like Netflix and Hulu). Rdio and Vdio don’t offer a unified subscription for music, TV and films yet, but that’s where they’re heading DISRUPTORS: 40 THINGS CHANGING MUSIC FOREVER the REPORT | 17 April 2013 | Page 11 continued…
Scandinavia Songkick Detour The great outliers of Europe? Or a template The renaissance of both Norway and Imitation is, the lazy for the rebirth of recorded music revenues Sweden is down, in part, to the fact they argument goes, the in other markets? Last year, Sweden and have both aggressive local services (WiMP sincerest form of flattery. Norway significantly bucked the decade- and Spotify, respectively) that are also In that case, when long decline that saw the record business expanding internationally. There are other Ticketmaster launched start to circle the drain. And the rebirth of factors that make them unique (notably its app (that swept a both these markets was significant. These being outside of the Euro and also having user’s smartphone music were not tiny marginal increases either (like very strong local economies), but they also collection and then sent the 0.2% global growth in 2012 reported this offer a vision of the future for other markets them push notifications month by the IFPI); Norway’s revenues rose because of the high uptake of smartphone as soon as a favourite act 7% last year and Sweden’s grew by 14%. devices, the key component in upselling announced a show near them), Songkick It’s not just cult acts playing in small venues consumers to monthly subscriptions. must have been rubicund with praise – for one-off shows. Signing up Hot Chip at mainly as it was not a million miles away the end of last year was a coup but the In Norway, 60% of digital revenue from its own app launched in 2011. biggest one was arguably enabling Andrew in 2012 was from subscriptions Bird to undertake a South American tour (compared to 25% from single-track While Songkick aims to have a good (although we should note that WeDemand/ and full album downloads). The story working relationship with the incumbents Queremos! has been doing something in Sweden was even more staggering of the live music industry (ticketing similar for acts in Brazil). Without Detour, – 91% of digital income last year came companies, promoters, agents, venues), these shows simply wouldn’t have from subscription services and just what it has been doing over the past happened as the live industry to date 9% was from downloads. few years has been (unintentionally or has been built in a way that such an otherwise) showing them up for being undertaking would not even be considered Both Sweden and Norway are very way behind the digital curve. The biggest a possibility. digitally (particularly mobile) savvy disruptor it has created here being countries, but they can work as early Songkick Detour. The latest move by Songkick is to offer indicators for what can happen in the ticket sales through its smartphone app, rest of Europe if digital is presented The proposition is simple: gather enough linked into its Detour shows. It sees it, for in the right way to consumers. The fans who will pledge to buy tickets for a now, as merely a testing of the water (“We’re fact that both these markets have show in a certain city and the show takes not becoming a traditional ticket vendor,” positively disrupted the negative place. It’s a straightforward crowd-sourcing co-founder Ian Hogarth told us). But to impact of the 21st century’s biggest model but has shown an engagement rule it out completely would be a mistake. disruptor (digital itself) is an irony to with, and understanding of, the live music Here is a company the old guard of the live be savoured. And aspired towards. audience that the giants of the sector had music business must be regarding with a seemingly not been aware of or even that combination of envy and fear. bothered about. DISRUPTORS: 40 THINGS CHANGING MUSIC FOREVER the REPORT | 17 April 2013 | Page 12 continued…
Sonos centrepiece of his own Spotify app. After default communication platform for many Hunted (which it has just acquired) that could securing $3m of funding in June 2012, musicians (both superstars and brand new) really upset the apple cart. This alongside Not the only streaming speakers company, Soundrop rolled out an SDK to take its rooms because of its immediacy and the fact that it rumours of integrated streaming from iTunes, but surely the one with the broadest beyond Spotify, starting with Facebook. creates a new type of real-time engagement. SoundCloud and Vevo could see music as ambition. Initially prohibitively expensive and Hashtags are now essential parts of digital a core part of what it offers later this year. aimed only at audiophiles and Premiership Tomahawk marketing and the company has wider If that happens, the possibilities won’t be footballers, the launch of a free controller ambitions that will have huge implications limited (like its 140 character count) – they’ll app for smartphones and the introduction As streaming services – learning a trick or for music. Short-form video tool Vine is a be boundless. of mid-priced speakers pushed it towards a two from Apple – try to go all proprietary by start, but it’s what it has planned for We Are more mainstream market and helped quell the not letting a playlist from one platform play debates that digital music wasn’t as “good” on another and trying to lock subscribers or as “real” as vinyl. The inclusion of the Sub in, Tomahawk is trying to blow through this UKF speaker to its portfolio was another key move exclusivity and create a truly agnostic digital to improve streaming audio dramatically music player. Tomahawk’s co-founder Jason YouTube doesn’t tend to shout about and anyone who buys one will surely be Herskowitz has been an outspoken critic of British bass music brand UKF when significantly less likely to scrap a streaming streaming going into a series of silos and trumpeting the merits of its video service – likely because the videos that music subscription and actually use it more. forecasts that, as things get really heated, have generated well over 1bn views are The launch of the Playbar at the start of the the age of chequebook-driven streaming basically audio tracks with a static logo. year shows that it no longer wants to just exclusives will bring a new and dangerous Yet UKF is a shining example of a digital disrupt digital music but also turn the TV insanity to the business. Tomahawk is all music brand built from the ground up sector on its head. about streaming interoperability. That may on YouTube. seem a curious notion to some, but think back Soundrop a decade ago to the download format and Its first channel was launched in April DRM wars where interoperability was to be 2009 by Luke Hood, who now oversees UKF’s core demographic is young, digital We first encountered Soundrop in late 2011 fought against tooth and nail. And think how UKF from within AEI Media. The main UKF and more than happy to buy music as well as one of the first apps to launch on Spotify’s Dubstep channel now has 3.5m subscribers as stream it on YouTube. The company crazy that seems now and how it potentially platform, before breaking the news of its and more than 1bn views, while UKF Drum is also looking to mobile, having quietly held the market back. Tomahawk, being iPhone app in January 2012. In both cases, & Bass has another 1m subscribers and released an official iPhone app in February an open source platform, doesn’t have the it came on like an avatar-less Turntable.fm, 328m views. this year to provide on-the-go access to its marketing budgets of a Spotity or a Deezer, content. offering social music listening in public but it is arguing that interoperability should Eagerly followed by tastemakers and fans chatrooms. Unlike Turntable.fm, though, be a basic consumer right. alike – including prominent radio playlist Curation is all the rage in 2013 as a buzzword, being built on Spotify’s platform helped bosses in the former camp – the UKF but UKF’s success has been built on its Soundrop go global (well, more global) from Twitter channels break new artists and tracks on a curatorial role right from its beginnings the start. Over time, Soundrop has emerged as regular basis. UKF has also diversified into in 2009. Along with X5 Music, UKF is an a digital marketing platform too, with artists as With over 200m users, Twitter is still playing live events – 11k people attended its Bass example of a new wave of dance-music varied as Orbital, Sigur Rós, One Direction and catch up with both Facebook and YouTube Culture gig in London in 2011, while it sold brands snapping at the heels of traditional Bob Dylan hosting listening parties or official (each with 1bn+ users) as a socially driven out a 42-date US tour – and compilations. players in the space. rooms, while David Guetta made it the marketing platform for music. But it is the Music Ally Music Ally is a music business information and strategy company. We focus on the Our clients include: Music Ally is an example of change taking place in the industry and provide information and insight into every perceptive journalism at its aspect of the business, consumer research analysing the changing behaviour and “ best, with unrivalled coverage trends in the industry, consultancy services to companies ranging from blue chip of the digital music sector. retailers and telecoms companies to start-ups; and training around methods to digitally market your artists and maximise the effectiveness of digital campaigns. We also work Andrew Fisher, CEO, Shazam Entertainment with a number of high profile music events around the world, from Bogota to Berlin and Brighton, bringing the industry together to have a good commonsense debate and get some consensus on how to move forward. The Team
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