Tag: startups

A simple guide to disrupting the music industry

Posted on | by Bas Grasmayer | 1 Comment on A simple guide to disrupting the music industry

The trigger: a new technology or a shift in the digital landscape. Aspiring founders are searching for a good use case to leverage that development and turn to something they’re passionate about. Music. With a vague understanding of the music business, they proudly announce their plan that will totally disrupt the industry.

People who’ve spent a decade in music have likely seen a dozen of companies promising to disrupt come and go. Disruption doesn’t sell. Solving problems does. The most common misunderstanding seems to stem from a fallacy around intermediaries and that disintermediation always improves things. The oversimplified view is that everything besides the artist & fan is ‘extra’ and both would profit if it can be successfully disrupted.

The reality is that things don’t function as an artist-management-label-distributor-DSP-fan chain. Music doesn’t always travel through it like that. Value doesn’t always travel through that chain. Instead there’s a whole network of connections where various types of value are exchanged, connected and created. In most cases it’s not linear; it’s a network.

The above may seem obvious, but this misunderstanding occurs time and time again. It leads founders to present themselves in an adversarial way to parts of the industry that actually should be their customer. If you can do X better than how a label is currently doing that, then that label might be happy to pay you for it. Artists & their management have a ton of things to do, so in many cases they’re happy to let labels or label services companies take care of some of it.

Don’t get me wrong: there are plenty of inefficiencies and practices of exploitation in the music industry that need to be disrupted. These may occur anywhere in the ecosystem (which also includes other parties like everything related to live, merch, PROs, etc) or in the connections between players. They typically don’t apply to an entire domain, e.g. ‘all labels’ or ‘all booking agencies’. Even when they do, like in the case of inefficiencies or friction, there may be other aspects of those businesses that would not benefit from complete disruption.

What I’m saying is do your research. Create a map of the industry’s domain you’re interested in and also map out everything adjacent to it, because there will be unforeseen connections. Understand how companies collaborate, what goals they’re trying to achieve, how they add value, and where frictions may occur. Read Don Passman‘s All You Need to Know About the Music Business. Speak with people to understand whether your research is based on current-day practices, because it definitely happens that people launch companies with assumptions based on early 2000s practices.

Music is complex. Part of it unnecessarily, but there’s a reason why things are structured this way. Figure out those reasons. Learn how others leverage those reasons to pioneer new businesses. Identify the trends. Understand the complexity to avoid endless pivots and repositioning. Music is in need of innovation – do it through partnership.

Where are the female music tech startup founders? Here’s a list

Posted on | by Bas Grasmayer

Conference organisers and journalists are trying to do a better job at diversity, but unfortunately, it’s not always easy. Let’s change that.

I get asked a lot whether I know any female founders at music tech startups. Together with some wonderful people on Twitter and on my newsletter, we’ve been putting together a list. Feel free

I’ve made a start at this list – together with some wonderful people on Twitter. If you think anyone is missing, please use this form to add them. And please don’t feel excluded if you don’t identify as male or female – drop me a note (@basgras on Twitter, my DMs are always open) & I’ll figure out another name for this list.

Direct link to list.

This list looks better in Google Sheets: click to open.

What music startup founders often get wrong

Posted on | by Bas Grasmayer

Doing a consumer facing music startup is hard. Especially if you don’t understand what gives music value.

One of the hardest aspects of building music startups is the fact that you’re dealing with a two-sided marketplace scenario. This means you have to build up one side of your marketplace in order to attract the other. It requires creativity, or a lot of funding, in order to build up the music side of your marketplace in order to attract the consumers.

This two-sided marketplace makes decision making more challenging: when to focus on what? How do you convince artists to use yet another platform, before it can really show its value through a well-populated marketplace?

But that’s not the number one thing people get wrong.

The number 1 thing music startup founders get wrong is overvaluing their content

This is the most important lesson I’ve learned while working on 3 different music streaming startups and a bunch of other non-streaming music startups. Music in itself has little value to a user (bear with me). Your value proposition needs to be better than: “come here, there’s music” and often times music startups don’t have anything better than that.

People don’t care about the music. They don’t have a problem listening to music. And if they do, they’re likely not aware of it.

Ironically, when doing consumer-facing music startups the music is an extra. It’s assumed it’s there. Not having good music on your service will kill you, but having it does not distinguish you. It’s the same with restaurants: we don’t visit a restaurant because they have the best food necessarily, but because it’s around the corner, they have something we feel like, the staff is nice, etc. Music, on a music service, is like the basic expectations of what we expect in a restaurant: food, drinks, a place to sit, and a toilet. Not having music, like not having toilets, will kill you, but it’s not the reason why people visit you.

This is why so many music discovery apps fail, why so many social jukebox or recommendation apps fail: people don’t need more content. Music’s availability is not where the problem is, the context is where the problem is.

Building music startups is about the functionality you add. That’s what people pay for, that’s how people stick to your platform. Not the ideals of better-paid artists, not ‘high quality streaming’ – these are basic expectations by now. People need to find a very simple answer to the question: what can they do with your service that they can’t do elsewhere?

Then the next question is whether it’s distinctive enough. I think that’s why high quality streaming startups tend to remain marginal: lossless streaming on its own is not enough to convince large consumer segments. It has to be about behaviour, about function. By now, lossless streaming isn’t hard to find, so people look for the checkbox and then look at what else the platform has to offer.

At the peak of its popularity, Crazy Frog as a track on iTunes was $1. As a ringtone, it was $3. The functionality is what made it valuable. (hat tip to Ed Peto for bringing this up)

I also think 360-degree concert videos are not distinctive enough from other types of video. As a matter of fact, I think the inconvenience of them outweighs the value when compared to other types of concert videos.

Let’s widen the perspective.

The value of music is elusive

A single song can mean the world to someone. It can help sell millions of products, it can inspire revolutions.

But in an ocean of millions of songs, that are easily accessible, its value is close to zero for a person as a consumer. This is why nobody cares about your free download anymore.

So how do you get the value out?

You use the music to create the environment in which you shape the type of thing people are willing to pay for. Going back to the restaurant metaphor: music means your walls, your tables, your staff, your bathrooms, your building, your ambiance. People pay for that, but indirectly: by paying for the food you serve them in that context.

More:

Just to be really clear: I think music has immense value and I dedicate most of my waking hours to it. When I talk about ‘value’ in the above piece, I talk about it from the consumer perspective, from the marketing perspective, and as a USP for a product. I am not saying that people are not willing to pay for music. Millions already are, every month, through streaming subscriptions, but also digital and physical sales. And that’s where the problem begins for music startup founders: if people are already paying for music, what more can you sell them?

The short answer: sell functionality that augments experience and behaviour.

Four of the biggest opportunities for the future of music consumption

Posted on | by Bas Grasmayer

A reflection on key trends in music, tech, and user interfaces.

Soundcloud is saved, for now. On top of whatever strategic decisions they make to be able to attract follow-up investments, they face the difficult task of preserving their user community’s trust and winning back part of the trust they already lost. Tumultuous times are ahead, which will be frustrating, but also very exciting as it creates opportunity for new innovation and startups to claim their piece of the pie.

Underserved early adopter: the Myspace moment

Back in April I wrote about the fact that music is about to experience another Myspace moment. What I mean by that is that when Myspace hit decline, as it lost its community’s trust, new platforms got a chance as early adopters bailed and moved on. Musicians started building up audiences on Facebook and Twitter, and sharing their music on Soundcloud.

Now we see another Myspace moment: Spotify is focusing on mass audiences, and the prime early adopter platform has a distressed community due to the continuous struggles that Soundcloud has faced over the last years.

This creates opportunities for concepts such as:

  • Connecting groups of music listeners based on music taste or curiosity:
    • Soundcloud‘s struggling with this due to its failure to keep its search & tagging feature useful as the amount of content grew over the years, and they killed their groups feature;
    • Spotify has deprioritized user-created playlists and removed messaging functionality.
    • TheWaveVR could be one of the startups to fill this gap.
  • Collaboration and feedback:
    • If people are leaving Soundcloud, they need to take that somewhere else.
    • Audiu, which was one of the hottest startups at Sonar+D this year, could play a big role here.
  • Promo services for people who need an easy way to share music to journalists, labels, etc.

You could come up with a lot more ideas and find startups striving to make a meaningful impact there.

A third device in our midst: the Voice User Interface (VUI)

I’ve recently been playing around with an Amazon Alexa I ordered. At first I was skeptical and thought it would always feel awkward, but you get used to it fast and the convenience of a voice-controlled device in the living room (and other rooms) is bigger than I expected. I thought all those times you have to grab your mobile phone, or look something up on the computer, were minor and infrequent inconveniences. Now, the VUI has embedded itself into my life and all kinds of small habits, patterns and every day rituals.

VUIs are going to be the third device: first came PCs (plus laptops), then came smartphones (plus tablets), and now we’re going to get a third addition through voice-controlled devices like Amazon Alexa, Google Home, Apple‘s Siri-based devices, devices in the car, etc. Perhaps this is why Tesla is in talks to do a music streaming service: music is the way into these spaces.

So what happens to the way we browse and explore music when we take the visual user interface away? What place does the smartphone get? What place does the laptop get? And what behaviour extends to our smart speakers?

What happens in AI is very important for VUI apps, but also for chatbots.

Conversational interfaces: the rise of messaging apps

Messaging has frequently been called the next major platform. It enables chatbots, which are apps that live on conversational platforms (this is a trend that’s also strengthened by VUIs). Some of the biggest social platforms to rise up over the last decade were primarily messaging apps, such as  Snapchat, Whatsapp, Telegram, and Kik.

The next step of the social web is messaging, but smarter than the AIM, ICQ, and chatroom phase of social. Facebook is positioning Messenger in such a way that it can live as a platform on its own.

Read Music Ally‘s write-up of the chatbot panel I moderated at Midem.

Short-form video

I urge people to try out Instagram Stories and figure out what it takes to make good content for it. Short-form video content is so important in an age of short attention spans. Some of the hottest platforms to emerge among teens in the last years have been Snapchat and Musically, both limiting the time-length of videos being shared on the platforms. It’s fun, fast, and requires low commitment: making users share and explore more content.

I firmly believe this is going to change the way we write songs and structure them. We’ve already seen how the streaming playlist economy made tracks shorter, with people moving the vocals to the start of the track in order to make skips less likely. In the next years, the video story format is going to strongly impact music.

Instagram is another platform that may fare very well from the decline of user trust in Soundcloud‘s community.

 

I’ll be discussing more of these trends in my newsletter, which goes out every week on Monday. Sign up to stay in the loop.

TheWaveVR could let online music subcultures thrive

Posted on | by Bas Grasmayer

Last week, at Sónar+D, I finally got to try out TheWaveVR as the founders were there to demo and pitch in the startup competition. The company has built a way for DJs to perform in VR and bring an audience from around the world together. It does this in a very fun and visual way, and this was probably the first time that a VR experience has made me seriously considering buying a VR setup.

Here’s why.

Over the last decade, I’ve spent a lot of time discovering music on Soundcloud and have seen microgenres rise and fall, with some blowing up and changing the sound of pop (e.g. moombahton, and then ‘EDM trap’). Subcultures and music styles used to be clustered to particular cities, but because of online platforms people from around the world can build on each other’s sounds rapidly. I call it ‘Soundcloud culture’, although the phenomenon is not limited to Soundcloud.

Tools like Turntable.fm, and now Plug.dj, have made it possible for people to gather online into chatrooms and play music to each other. These subcultures have embraced these tools to throw small online gatherings, bringing together all the top producers in their styles for virtual listening parties, or cyber raves.

It’s very akin to the subcultures that exist around video games, and particularly MMORPGs such as World of Warcraft. There’s a sense of community and friendship, because people get to share something they don’t get to do irl (‘in real life’). I’ve written about gamers as a music subculture before, but I haven’t pointed out the connection to Soundcloud culture.

Many of these pioneering DJs and producers in microgenres have nowhere to go. They might not live anywhere with clubs, be too young to go to any, or there might simply not be enough critical mass for their sound to take it into the local clubs. So they take it online, where every niche can find an audience (for an example of a microgenre, check out Gorge). As with many gamers, it becomes far easier for these producers to express themselves virtually than in non-digital settings.

Back to TheWaveVR.

TheWaveVR is taking this to the next level, making the entire experience more immersive. What caught my attention is when Aaron Lemke, one of the founders, explained to me that they’re doing a weekly rave at a set time. All of the above instantly clicked into place.

When gamers have free time, they check out Steam, Battle.net, or similar tools, to see if any of their friends or team members are online, so they can play a round or just sign on, chat, and hang out. Social listening platforms do a similar thing, but they’re not nearly as fun or engaging for the audience as games. For the audience, they’re basically a radio station with a chatroom.

This is what TheWaveVR is changing, by giving the audience visual ways to interact with each other and the DJ. And this is what makes me finally ‘get it’ when it comes to VR: as a media format for social platforms it makes so much sense.

People are skeptical whether virtual reality is ‘the next big thing’ for music. And they’re right: there are many obstacles. But it’s not important. The people pondering such questions are not the target audience for these experiences in the next few years.

Online subcultures are the target audience for VR experiences, and particularly the ones connected to gamer subculture. Gamers are going to be the ones to first embrace this medium, and while the world’s figuring out whether to take it seriously and what to do with it, it’s gamers that will define the soundtrack for the medium: just like they’ve done with YouTube.

Four innovations in classical music

Posted on | by Bas Grasmayer

Last Friday, I had the pleasure of representing IDAGIO on stage at a conference for the first time since joining as Product Director one month ago. It was my first time attending a conference dedicated to classical, and since I haven’t written much about that part of the music business yet, I want to highlight some of the innovations I was introduced to at Classical:NEXT.

The classical music world has a set of specific challenges. Most discussed is how to address new audiences and how to win them as fans of orchestras, ensembles, and soloists, and get them into venues for live performances.

It’s a challenge, because you don’t want to sacrifice traditions which often go back hundreds of years. But you’re also dealing with shorter attention spans, and an enormous amount of choice when it comes to experiencing live music: classical, or not.

Another issue is the sheer number of people and instruments required to perform particular works. Or that music streaming services are designed for pop music (performer, album, song), and are not structured around all the data you get with classical (composer, work, performer, recording, instrumentation, era, soloists, etc).

I’ll be writing about these topics more in the future, because I think the wider music business has a lot to learn from classical music. For now, I want to focus on some of the innovative projects and products I met with (or shared a stage with) at Classical:NEXT.

LOLA

One of the most popular MUSIC x TECH x FUTURE articles ever, was about how the music business can become more sustainable. I mentioned developments in VR might make it easier for musicians to collaborate or practice over distance, without having to leave the home.

LOLA is a piece of  to let performers practice with each other digitally, audio visually. For this, latency must be reduced as much as possible, to less than 30ms. For comparison, Skype has about 500ms latency.

So far, LOLA, short for low latency, has been able to get musicians and dancers from institutions around the world to practice, as well as perform with each other.

A demo of LOLA (starts at 3:50):

Gigle

The on-demand economy is starting to have a real impact on the music business. There are numerous platforms that let you book bands and musicians, each with their own twist. Most are kind of like an Airbnb for music: you browse the catalogue of musicians, compare prices, and book whichever suits you best.

What separates Gigle, which hails from Helsinki, Finland, is that they’re mobile-first. They’re trying to lower the barrier to booking music: instead of getting the same old boring flowers and wine for someone’s birthday, why not get a violinist in?

The excuse for focusing on the desktop browser experience is often that you want people to be able to think things over calmly, keep an overview, and then make a decision. If your goal is to remove barriers, focusing on mobile is the right way to go: if you can’t do it on mobile, then you need to go back to the drawing board. Gigle’s right to emphasise the mobile experience.

At this point, the mobile phone is the personal computer we most often access. Maybe we don’t spend less time on it than on our desktop computers or laptops (although for many it’s the other way around already), but even for those of us that are chained to our computers, the amount of times per day we access our mobile phones far exceeds that of any other computer.

Australian Discovery Orchestra

Perhaps one of Australia’s youngest orchestras, the ADO has an interesting digital strategy. Besides livestreaming their concerts, they turn some of their recordings into virtual experiences. People get placed into game-like environments, and then have to complete certain objectives to move through the composition.

A screenshot of the interactive experience for Miranda Waltz’s Imaginary Symphony No. 1

This is an interesting way of adding another layer of experience to the music, which hopefully resonates with new audiences. I think the problem for classical music is not that young audiences think classical is terrible: they don’t. They’re just indifferent, have little understanding of it, feel overwhelmed because they don’t know where to begin, or feel that the genre has a stuffy image.

So give them something they can understand. Give them something with objectives. Something that encourages them to explore, to be curious. Something that is designed for a lack of understanding and knowledge as a starting point. That’s the powerful thing about these virtual experiences.

TrueLinked

Concocted as a way to get musicians more gigs and opportunities, TrueLinked also provides a way for people in classical music to organise the process of performing and recording music.

If you thought the logistics around casting for a band were hard, imagine a full-size orchestra with anywhere between 50 and a 100 members.

The platform has ways of categorising musicians by level, understanding of repertoire, collaborators, and other factors, so that the demand-side of the marketplace can easily figure out how to prioritize the people they contact. This provides artists with a great way to market themselves within their niche.

I’m sure there were lots of other innovative ideas & apps presented at the conference. I only had the one day there, and didn’t have much time to look around and attend the talks and panel discussions. Ping me on Twitter — always happy to learn more about interesting projects.

Special thanks to Katariina Nyberg of ExClaM! Digital for organising & chairing the session I met some of these startups at.