The east coast edition of Digital Music Forum played out in New York on February 24th and 25th. Digital Music News did a great job capturing some of the key points raised in the various talks. Here a few of the interesting discussions and if you want to check out the rest, follow this link.
- Live@DMF: Ted’s Locker Room Speech: ‘Enough Already’ – “Enough reminiscing, old music business is not coming back, “the old days of the music business are over.”
- Live@DMF: There’s a Mobile Music App for That – “The ability to go across platforms and devices… is an inescapable responsibility of the so-called web app developer.”
- Live@DMF: The Umbrella ‘State of the Union’ – “You’re going to see a shift in the power structure, and it’s going to be ugly… the companies that adapt, open up and let people in… the ones that don’t do that will get squashed”
- Live@DMF: The Game of Music Gaming Is Changing – “Major console, mobile, social-based (and virtual) games are leading segments for music.”
Investments and Funding
Investments in music and audio related technology companies continues to be fairly strong in February with another ~$26m in investments. For those keeping a tally, in the first two months of 2010, we have seen total investments of approximately $70m. Please keep in mind this isn’t a comprehensive list and the numbers have been pulled from public sources but it still gives us a pretty good sense of general investment activity in the music tech space. If you know of others, please share them in the comments section below.
Here are some start-ups that received funding in February:
- Music Mastermind raises first round $4.9M for virtual music creation
- LinkoTec Gets $1.5 Million For Web-Based ‘Media Manager
- Social Music Player TuneWiki Raises $7m From NTT Docomo
- Spotify Reportedly Raises New Funding From Founders Fund For U.S. Expansion
- Tunesat Raises $975,000 For TV Music Tracking
- Online Music Service Mog Raises $9.5M; UK Expansion Planned
- Slacker Gets $2.0M In Debt Funding
I should also note a couple more companies that received funding in January which I missed reporting:
- Pioneers of the Inevitable (developers of Songbird) received $2.02M in Unattributed funding.
- Instinctiv (iTunes plug-in) received $400k in Unattributed funding
Music Services and Apps
Twones just released The Music Bar which is a Firefox add-on that gives you a set of tools to bookmark, manage, share, discover and search for music.
Extension.FM is a very cool Google Chrome extension that makes it easy to listen to any music embedded on a web page. Once installed, click on the button and a playlist is created which you can listen to within the embedded music player. Amazingly, you can navigate away from the page and the music keeps playing. A couple of other great features is the ability to scrobble to LastFM and as you visit different sites, Extension.FM builds a library of music for you that you can revisit anytime. Of course, no music is downloaded or stored on your computer. Here is a quick 2 minute intro video that describes this tool. If you haven’t switched over to Chrome, this might make it worth it. Ever since moving away from Firefox for performance reasons, the number of amazing Chrome extensions being developed keeps growing.
Bitspace Launches HTML5-Based Streaming Music Player and Backup Service – “There is no dearth of streaming music services on the web today, so it takes quite a bit for a new service to stand out from other popular services like Spotify, MOG and Lala. Today, we came across Bitspace, an online music player and backup service for your music files that puts an interesting new spin on this subject. This service stands out because of its great design and the fact that it’s fully based on HTML5.”
RealNetworks, MTV to Spin-off Rhapsody Music Service – The thinking here is that both companies get to move the money-losing music service off their books, and the new structure may theoretically give them a better chance of finding a buyer.
Bankrupt, Crowd-Funded SellaBand Acquired by German Investors – Reading a few blog posts and comments, it doesn’t sound like many people were all that surprised. Sellaband’s crowdsourced music-financing experiment seemed promising, and in its three-plus years, it attracted thousands of artists and financed dozens of CD and download releases, so it wasn’t a total failure. However, the company also admits that the company’s bankruptcy resulted from a combination of old-school record industry ways and new-school misplaced optimism.
Rejected By Apple, Grooveshark Releases App For Jailbroken iPhones On Cydia – Having lost patience with Apple’s app approval process, Grooveshark has gone ahead and released their app for jailbroken iPhone/iPod Touches. This is a ballsy move and probably one that won’t sit well with Apple and the labels. Either this move goes quietly into the night or Grooveshark has just given their detractors more ammunition to go after them.
theBizmo launches Hit Or Not Facebook music app – This new facebook app is similar in concept to the original The Next Big Sound when they first launched. In this game, you play the role of an A&R person and test your hit making skills. I spent a bit of time playing around with Hit or Not and it’s kind of fun to play and even slightly addictive as you try to find those hidden gems in hopes of turning them into “big stars” and making yourself rich.
SeeqPod Founder Resurfaces with Mimvi Music Aggregator – “Mimvi, currently in private alpha, will use a similar approach to that of SeeqPod — which claimed 50 million unique monthly users at one point — to grab videos from Brightcove, Crackle, DailyMotion, MTV, Pitchfork TV, Veoh, Vevo, Vimeo, and YouTube, mashing their metadata against what its web crawlers determine about a given song’s popularity and associations. In addition, it reacts to how people use it.”
RadioDNS – I’m still a big fan of radio, mostly internet radio now so it excites me to see a project like RadioDNS. This collaborative project wants to converge radio broadcasting and IP-delivered services. I see it as taking a tried and tried technology (terrestrial radio) and harnessing today’s internet technology to turn radio in a multi-platform medium. The write-up is a bit technical but this four minute video should give you enough background information. It’s worth reading Jerry Del Colliano’s new media predictions to get his perspective on the future of radio. I believe there is some tie-in’s between what he is saying and what RadioDNS is attempting to do. We’ll see whether RadioDNS is adopted in any significant way or will it be another noble attempt that is overlooked or worse, dismissed outright without serious consideration.
Micropayments has been getting a lot more attention recently with the launch of PaySwarm and Flattr. PaySwarm is open source and allows artists/writers that create digital content to distribute it through the Web and receive payment directly from their fans and customers. Flattr, started by a co-founder of Pirate Bay, will let consumers divvy up money to the musicians, bloggers, photographers, or other publisher of their choice. Will these new payment platforms gain traction? Will consumers trust them? I also wonder how labels, managers and others in the music business chain feel if bands start receiving these micropayments, effectively cutting them out of the action. There is going to be a lot nit picky things that need to be carefully addressed in order to make this a sustainable payment model. Don’t forget, PayPal already offers micropayments and have the infrastructure and experience to expand this service if we see any significant adoption.
Opinions, Insights and Analysis
The hype is in the cloud, but the reality is hybrid – “The cloud-based solutions, specifically DaaS (Data as a Service) have to be available with the “hybrid cloud” option. Hybrid cloud solutions give you ubiquitous access to your data , locally as well as in the cloud. In does not matter where are you accessing the files — they can be locally available in your LAN or on your own computer; or they could be accessible in the cloud. A hybrid cloud solution seamlessly keeps both local and cloud files synchronized.”
Rent vs. Own: The Streaming Music Debate Continues – Is this really worth debating anymore? Some people will be quick to adopt streaming services, some will want to buy, whether it is digital or physical and then other will happily access music in multiple ways. As mentioned in the above article, realistically, it won’t be an either/or choice, consumers will just have more ways to consume music.
Sony Music chief foresees the endgame for CDs – “While 60% of Sony’s music business is now made up of CD sales, Hesse saw CDs as accounting for only 20% of the business by 2013. The rest will be made up of musical ringtones, subscriptions, and downloads, either paid for by consumers or supported by ad sponsors.”
Google’s Music Strategy: Past, Present and Future- I’m not sure that Google will unseat Apple anytime soon when it comes to music, although some of the music labels probably wouldn’t mind a new partner. If Google treats music as an after-thought, rabid music consumers will know it. But I suspect they are serious, given that they supposedly lost out on buying Lala and now the rumour is they are looking at buying Catch Media. Love or hate iTunes and the iPod, Apple has captured the minds (and pockets) of music consumers and will work hard to keep them. I’m looking forward to the competition between these heavyweights and I know that there are one or two start-ups lurking in the background that will one day become a music heavyweight themselves.
New free music sites, Guevara and Free All Music learn from others’ mistakes – My initial reaction is “why are they trying this again?”. I don’t know if this “tweaked” model will finally find success but it’s better that we cheer for their success for the sake of music and technology. More success equals more confidence by consumers, investors, artists, labels, advertisers that new music business models can work. It may not be a service that some of us will care about but if they find the right audience, hopefully they make it work.
5 Mantras For The New Music Business – So the big labels are trying to preserve past, successful business models, mainly the CD release complex and yet want to wholeheartedly embrace new digital strategies? Not sure you can have it both ways given the massive shifts in technology and digital music consumption. The question now being asked is whether content owners should accept lower average revenue per user (ARPU)? Here is a great piece by Kyle Bylin where he writes about MusicDNA and whether it has a chance to catch on. In this piece he describes very well the record industry’s structured top-down, highly centralized “push” marketing model and how “the push mentality of the record industry could not be extended into the digital realm, because all three of these institutions — that they built themselves on the back of — deteriorated in the face of the societal and technological shifts that the Internet brought forth”.
The Challenge for the Music Business – “The tried and true methods of creating success in the music industry are over and are never coming back. The economics just don’t work for most acts anymore. The greatest risk in the next 5-10 years for music is that no one will want to fund the development and promotion of new musical acts the way the major labels did in the past, until we see a new financial model.”
Upcoming Music Conferences and Events
- Music 4.5 – London UK, March 4th, 2010
- Billboard Music and Money Symposium – New York City, March 4th, 2010
- Canadian Music Week – Toronto, Ontario, March 10th to March 14th, 2010
- Digital Strategies Conference – Toronto, Ontario, March 10th, 2010 (Part of Canadian Music Week)
- 2010 Media Summit – New York City, March 10th to March 11th, 2010
- SXSW – Austin, Texas, March 12th to March 21st, 2010
I’m planning to attend Canadian Music Week, and particularly looking forward to the Digital Music and Media Summit and Digital Strategies Conference. For those attending SXSW, be safe and pace yourselves. Before heading off, it might be a good idea to check out this SXSW survival guide to help get you through those long, action packed days.
See you next month!
Gabriel Nijmeh is a software business analyst, passionate music lover and guitar player. He currently advises a couple of music startups, including Mediazoic, a real-time social DJ platform and co-founded the Toronto edition of OpenMusicMedia which brings people together to openly discuss the intersection of digital music, media and culture.