creative deconstruction

Music and Tech Recap – March 2010 Edition

Posted on 08. Apr, 2010 by Gabriel Nijmeh in NEWS, TECHNOLOGY

Nice to see winter hand over the reigns to spring. Mind you, winter here in Toronto was mild, some might even say non-existent. It is even nicer to see people trading their hats, mitts and down-stuffed jackets for sunglasses, short sleeves and beers on the patio. Along with spring renewal comes a slew of new album releases, concert announcements, music conferences and meet-ups.

I had a chance to attend Canadian Music Week mid-month which I wrote about here. I found it quite interesting and fascinating to sit in on a variety of executive level music panels to hear ideas & opinions being vigorously discussed which is quite different from reading blog posts and news releases. I think generally there is more optimism than you would expect but it’s also because more people are coming to realize that time, energy and resources are being misspent in ways that haven’t proven productive and never will.

Clay Shirky in his latest think piece, “The Collapse of Complex Business Models” fittingly describes what happens when stress hits complex societies and/or industries as they become far too inflexible to respond. It’s not that they don’t want to change, it’s because they can’t. There is more than enough historical precedence that shows countries, empires and industries who, after years of domination and success, find themselves quickly unraveling and never able to maintain their former glory.

He ends his piece by describing what happens to institutions when they collapse. If we consider the music industry today which is facing monumental technological, economic and cultural shifts, the battle raging between the old system as it fights to preserve the status quo and the people who have broken away from the industry is a clear indication that we are in the very early stages of an industry refresh.

When ecosystems change and inflexible institutions collapse, their members disperse, abandoning old beliefs, trying new things, making their living in different ways than they used to. It’s easy to see the ways in which collapse to simplicity wrecks the glories of old. But there is one compensating advantage for the people who escape the old system: when the ecosystem stops rewarding complexity, it is the people who figure out how to work simply in the present, rather than the people who mastered the complexities of the past, who get to say what happens in the future.

We have the likes of Apple, Pandora, Spotify and hundreds of other music startups, artists, even new music labels/companies, who are shaking things up by building new business realities. For any student of history and economics, this is very interesting to witness firsthand.

Investments and Funding

March was a quieter month with much less investment activity compared to January and February. Q1 2010 closes with an approximate investment amount of $99.6m. As I have noted in past recaps, this isn’t a comprehensive list and the numbers have been pulled from public sources but it still gives us a sense of general investment activity in the music tech space. If I missed any investments, please don’t hesitate to comment below.

• Sonos Confirms $25 Million Investment From Index Ventures
• Beamz, maker of interactive music products, raises $2.48m
• The Echo Nest Gets $500,000 Grant From National Science Foundation
• Regen manufacturer of solar-powered audio products, raises $1.6m in funding

Billboard has been tracking the hottest music-based startups, which have predominately been music service based companies, meaning pretty much anything but streaming or download services. Billboard has tracked 136 deals in 2008 and 2009, with 49 deals involving 45 companies that provide music services. 36 deals amounted to $417.5 million with $101m of that being VC based. Very interesting stats!

Music Services and Apps

Rootmusic- This is a slick little music add-on for artists who want to build a MySpace-like band page in Facebook. It lets fans listen to streaming music (using a Soundcloud player), view tour dates, photos and read a band’s bio. Rootmusic joins a list of other Facebook band apps like LP33 and My Band.

Immitter – A new music delivery service that is aiming to help unsigned, indie bands get heard. Bands can enter details/keywords specific to their music (genre, location, BPM) which helps users to discover new music, Pandora-style (as some are describing it). To be really effective as a music discovery tool, this service is going to need a massive infusion of artists to make it worthwhile for fans.

Project Playlist Seeking More Funding, In Talks with AOL- $23m in funding so far, legal troubles with two out of four music labels and the company is looking for more money? Tough pitch. I didn’t know that Owen Van Natta, former Facebook exec and former CEO of MySpace was CEO of this startup. He wasn’t there long enough (5 months) for anyone to really notice?

IMHO is a new music, video, radio and TV cloud-based multimedia service and reading the press release makes your head spin. Bleeding-edge? Watershed moment? Next generation? I gave it a spin and IMHO, it’s not very good. The service is slow, cluttered, not very user-friendly and tries to shove too much in a tiny widget.

CBS hopes for Last.fm profit in 2010 – It took me a while but once I really gave the service a chance, Last.fmhas become my go-to music service. They linger in the shadow of Spotify, Pandora and MOG and claim that subscriptions make up 25% of their revenue. It certainly helps having the muscle of CBS behind them, because Last.fm may not have survived independently. I’m definitely cheering them on. Check out my music Last.fm profile hereand lets connect! In other related Last.fm news, they have just published their long-awaited API update. It will be interesting to see what kind of new and updates apps developers might start working on.

Q+A with Claes Loberg, CEO of Australian music service Guvera- With Guvera’s US beta launch on March 30th, this is an interesting interview that provides deeper insights into this new ad-support music download service.

Muziic for iPhone- The desktop version of this music service is now available for iPhone/iPod Touch letting you search for music and videos on YouTube, tune in to hundreds of internet radio stations, build a playlist or browse featured tracks and albums.

Ultimate Guitar Mobile App- My favorite guitar tabs site now has an iPhone app! It is currently the number one paid app and a top fifty overall app in iTunes.

Snowtape- Do you remember the days sitting beside your cassette machine that was hooked up to your radio, waiting to record your favorite top 40 hits of the day? Well, here’s another internet radio player app but more interestingly lets you record individual tracks from the radio stream. Given the amount of music that can be downloaded (legally or otherwise) or accessed, not really sure why anyone would spend much time recording streams on the run. This experience will never compare to the early days of home taping.

Venue.FM- A web mash-up with a simple and clean interface powered by Songkick. Pick your city and pick a period (limited to current day, next 7 days or next 30 days) and a list of concerts is presented to you. Beyond the usual information (date, venue, location), a batch of songs from each touring artist is available for you to listen.

BYO.FM – Michael Robertson (of MP3.com and MP3tunes.com) is at it again with his latest idea that lets people program their own radio station with news, weather, traffic sports and music. CNET provides a good description of the service. I gave it a try and I really like the overall concept and I believe this is an idea that commercial radio should explore further.

Mflow- Another music recommendation platform that follows a Twitter approach. Music fans follow each other, recommend music along with a tweet size comment, each recommended song allows for a full first time listen and subsequents listen are 30 second clips (similar to Lala). When someone buys a track you recommend, you get 20% of the purchase price. This is similar in concept to Blip.FMbut mFlow has partnered with a number of music labels and is focused on getting people to buy music. Currently in beta and only available in the UK.

Universal Music Group has just released their version of Guitar Hero/Rock Band/Tap Tap Revenge called Six String. Includes six songs, they offer twenty additional tracks available for in-app purchase.  I gave it a try and it is a very well designed app, the first to be released directly by a major label.

MOG showcases iPhone and Android apps- Expected to be released in Q2, will allow users to download tracks for offline listening, which is something Spotify currently offers in their iPhone app.

Song.ly, Twitter Music Sharing Service Up for Grabs for $50,000 – A much simpler, no-frills version of Blip.FM, Song.ly is a service that lets you search for and share songs on Twitter. It appears that someone has put in a bid for $50k, although I am wondering if the bid is legit and whether a deal will go through.

Interview: Zach Zalon On Hello Music’s Opportunity Engine For D.I.Y. Musicians – Hello Music combines technology with professional A&R to identify artists and connect them with career opportunities. This type of music service proves that technology is only a part of overall effort in building a music career.

22 students + 10 days + Echo Nest = 7 mobile apps!- A group of mobile development students at Olin college just completed the mid-semester #mobdev contest. 10 days to create a compelling product prototype on the Android platform using the Echo Nest APIs.

Opinions, Insights and Analysis

Music 4.5was held in London on March 4th, that brought together tech start-ups, serial entrepreneurs, investors, artists, band managers and key industry players to talk, strategize, and debate the direction of the music industry. Musically has provided great insights into the panels and discussions that went on:

• The communications gap between music and tech companies
• A lot of music services, but where are the businesses
• 10 music startups pitch their wares
• Music startups pitch to teenagers

Dave Kusek on The Cloud, Topspin, Hype Machine, SoundCloud, and the death of MySpace – “Great music is more important than anything else”. True. Very true!

The Human Recommendation Engine – Algorithms have come a long way in automating music recommendation and discovery, but nothing will ever beat talking to a passionate friend or trusted source about new bands and new releases. It’s about the conversation and slowing life down a bit so we can actually enjoy and connect with the music in more than a drive-by fashion.

The Truth About What We’re Paying For Content- People love to debate the merits of free vs. paid content. But overlooked in all this is the cost of access to that content, that’s where the action is. We’re paying more than we ever have to receive our movies, news and music, according to Forrester analyst James McQuivey.

5 Reasons I’m Still Not Paying for a Music Subscription Service – Hard for most people to justify paying for something when so much of it is already available online and which will remain that way. I do always wonder had the labels initially came together to combine their catalogs and hired the best music technologists to build a solid, user-friendly application, would the story be different? Would they have got it right? Can it even be done today?

How Important is Gaming to the Music Industry? – According to a games developer, “Industry insiders are learning that video games are the radio and distribution channel of the 21st century”. I don’t agree that gaming is a primary music distribution channel because how many people buy games because they want to hear the music first? Music is an add-on that enhances game play.

Upcoming Events

• Replay: Symposium on Sound Sampling – Syracuse, NY, April 9th, 2010
• NAB Show- Las Vegas, NV, April 10th to April 15th, 2010
• Envisioning 21st Century Music Business Models- Berklee College of Music, Boston, MA – April 15th, 2010
• ASCAP “I Create Music” Expo – Los Angeles, CA – April 22nd to April 24th, 2010
• Music Hackday- Amsterdamn, Netherlands, April 24th to April 25th
• Musexpo 2010 – Hollywood, CA – April 25th to April 28th, 2010
• NARM – Music Business Convention – Chicago, IL – May 15th to May 17th, 2010

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.

Tags: INNOVATION, MUSIC INDUSTRY, TECHNOLOGY