As we move into the next decade it is clear that the music industry is a different place from 10 years ago, particularly where its approach to music business startups concerned.
Warner Music has its own investment arm; Universal Music has a global network of startup departments, while independent entertainment-focused startup accelerators such as The Lynk are forging strong partnerships between labels, creativity and innovation. What’s behind this change and what does it mean for the future?
As CMU managing director and co-founder Chris Cooke points out, the music industry has to some degree been unfairly labelled as being resistant to startups and innovation generally: “Although labels have a history of resisting new technologies, in fact, the five years that it took them to come around to the shift from CDs to streaming was pretty quick, especially when you consider that they were looking at losing what had been a lucrative market for them. These days the majors have divisions that are genuine music startup accelerators, but still, you’ll find that a startup with a very radical business model would experience strong kickback.”
Cooke sees recent deals with TikTok and Facebook based around user-generated content (UGC), as being indicative of what we can expect to see in the next couple of years: “As YouTube was quick to point out, it has been facilitating that kind of music-based UGC for years, but I believe that we will see other manifestations of what is happening there – and on TikTok and Facebook – coming through very soon. Ultimately though, all of this is dependent on a constant flow of great music being discovered, nurtured and released. For me, startups should focus on artist/fan relationships and finding ways to bring the disparate sides of the industry together. For example, finding a solution to the number of separate deals you still have to make for merchandising, live work and management around any given artist would be genuinely useful.”
Ching Ching Chen, vice-president of business development at Capitol Music Group, reveals that Universal Music’s global policy concerning music startups is aimed at offering artists resources that help them connect with fans: “As a general rule we want to be sure that the tech we adopt is genuinely experiential, and in order to do that we look at everything from AR through to experimenting with new forms of storytelling.” In order to try and find the most relevant ideas, Capitol Music runs a twice-yearly cohort, where the best startups get to spend seven weeks being mentored in how the music industry really functions, the aim being to help them finesse their innovations.
“Embracing startups is one thing, but adopting those ideas is more complicated, because before you do that there’s a whole checklist of company processes that need to be aligned with and internal coordination that needs to take place around existing release plans,” Chen says. “Our goal is to help facilitate how startups navigate the music industry as we recognise how many layers there are in a label operation, and the equal importance of folding artists into these conversations –because ultimately, it’s about amplifying the artist’s voice and creative vision.”
Paris-based TheLynk, one of the selecting partners of MIDEMLAB, aims to connect creativity to technology. Founder Yvan Boudillet agrees with CMU’s Cooke that the music industry is more innovative than is widely believed: “The live scene has always been very tech-driven, marketing also, and the people who listen to music are also very into technology, but at root the music industry is driven by creativity, and it’s crucial to protect and keep that human element. But equally, the music industry is so much more aware of the importance of innovation than it was and when you compare it to other, much more conservative industries, such as book publishing or cinema, it’s a pioneer.”
There is also, says Boudillet, that other thing about music: “It’s a testament to the strength in depth of the industry that the major labels not only still exist, they’re doing very well. It’s a very solid industry that has become adept at integrating technology. And this happened because it realised there was no choice. I think executives realised that the biggest threat to survival was not technology, it was a loss of creativity. And in fact, technology can be used to help artists in many ways. It can also create new, previously impossible experiences around music through UGC.”
Chilean startup Groovelist is, according to CEO Max de la Fuente, all about creating connections: “We are all about connectivity because we believe that artists aren’t being recognised, mainly because it’s hard to get into the music industry. We bring various players like labels, radio and festivals together in one place, alongside artists and label executives in order to create a matchmaking platform for the South America music industry. We currently have over 40,000 members signed up and we are launching in North America in February. We see Groovelist as a way to extend throughout the whole year the sort of creative interaction and sense of community that typically happens at events like MIDEM.”
The platform’s business model is based around charging talent seekers and event organisers for access: “Members have a dashboard which means they can filter by genre or by country, then they review all the relevant applicants and can choose who they want to connect with, just like at a trade event,” de la Fuente adds.
TOP IMAGE: Ching Ching Chen, VP business development, Capitol Music Group