The music portion of South By Southwest conference in Austin, Texas officially kicked off Tuesday. Infiltrating the movie buffs and techie nerds who are in town for the film and interactive portions of the festival, are the skinny jean wearing, bead sporting, aviator donning, shaggy, smelly musicians of the world. And of course, the leaders of the actual business side of the music industry. Last night, 6th Street was still relatively tame as the Interactive to Music transition happened. But, no doubt, tonight will get weird.
The first panel I attended was with the Director of Product Management at Facebook, Michael Cerda, VP of Business Development at BandPage, Chris Wiltsee, Managing Director of Walden Venture Capital, Larry Marcus and the moderator was SF MusicTech veteran, Todd Tate.
The panel seemed to meander somewhat aimlessly for the first half hour around general tech topics until someone from the audience nearly interrupted with “So what ARE the 7 hottest topics in music tech right now” (the name of this panel session) to which the room erupted in applause. People like lists. And they like structure. It would have been nice if the list was displayed on the projector so the room could follow along. But nonetheless, the 2nd half hour provided a bit more form and direction for the overflowing conference room at the Hilton hotel in downtown Austin.
Here’s What The Panel Had To Say About What’s Happening in Music Tech Right Now
1) Video
Tate started it off by referencing YouTube’s new terms of service for independent artists which Zoe Keating revealed in her blog, about how they are requiring artists to put their music on YouTube at the same time they release it anywhere else. This prevents windowing releases – putting them on download stores like iTunes and BandCamp prior to releasing it for streaming. To which Michael Cerda of Facebook replied, “There are more places on the Internet to put video.”
And as Facebook video inches closer to YouTube’s traffic, with 3 billion views A DAY, he’s right. However, they don’t have the monetization features that YouTube offers such as Content ID or even in video annotations where artists can link to merch, tickets and downloads. And Cerda would not discuss a timeline for these updates, however he did say “we’re really just getting started.”
“YouTube is more like a library. Facebook is more about discovery. We’re building a feature set around that.” – Michael Cerda, Facebook
Larry Marcus, whose VC firm works with Pandora, SoundHound, BandPage, Jukely and others said that “you may have 2 million followers on YouTube, but you can’t actually reach those followers. It’s really important to own your fans.”
It’s true, building followers on YouTube, Facebook, Twitter, Spotify or any other third party service is of course important, however overnight the service could change how it operates and artists could lose access to those fans – like Facebook did with Page reach a couple years ago.
YouTube just announced yesterday, YouTube For Artists, which provides artists with tips on how to chart on Billboard, get airplay on Sirius/XM and NRJ in France. YouTube plans to debut an analytical tool that will provide geographical viewer information to help artists route tours, a la Pandora’s Amp.
+Pandora Unveils AMP Allowing Artists To See Their Data – And It’s Awesome
Wiltsee discussed BandPage’s partnership with YouTube which now allows artists to place graphic annotations over their videos which link to merch offerings.
+Why BandPage Is Going To Be The Most Powerful Company In Music.
“One of the biggest headaches in the business right now is there’s a ton of engagement happening on Pandora, YouTube, and Spotify are the big 3. Artists are rightly very frustrated and pushing back. For the amount of plays we should be seeing a lot more revenue.” -Chris Wiltsee, BandPage
2) Crowd-Funding
Much of the panel’s time was spent discussing Amanda Palmer and Patreon. And no, I didn’t guide the conversation this way. So I’m not the only one that thinks this is revolutionizing the industry! But all agreed that artists need to build the fan base first. Crowdfunding is not about discovering.
+Why The Patreon Acquisition of Subbable Is Important
Wiltsee advised that the traditional album campaign is outdated and doesn’t work anymore. He said that artists need to be releasing content all the time along with bundling in exclusives and special merch so “you can continually come out with new things to engage with that fanbase. An artist’s career is always in cycle. It’s a perpetual cycle.”
“Amanda Palmer is a multi-media star, but how many Amanda Palmers are there? She’s figured out how to break through.” – Larry Marcus, Walden VC
“Above fan funding, artists need to have more regular conversation with their audience. Artists shouldn’t come out and just say ‘come buy my merch or a ticket. It’s about a conversation. It’s about the perpetual cycle. You’re not just merchandising, you’re engaging.” Michael Cerda, Facebook.
3) Radio
“Artists should be demanding of Spotify and other services to promote their wares. That’s the spot where you’re going to want to reach your fans to consume your products,” Marcus said. Wiltsee agreed “there are fans listening to bands 800 times a month.” But currently, artists have no way to actually connect with these fans. Not on Pandora. Not on YouTube. Definitely not on Sirius/XM and not really on Spotify.
Pandora released its artist analytic tool AMP a few months back. It was a great step forward, however, it needs to go further. Fans should be notified (ON THE PLATFORM) when their favorite artists announce new shows. When they release a new song. When they launch a crowd-funding campaign. And fine, these services SHOULD take a commission so they have skin in the game and can work WITH artists on increasing this revenue. If 100 people in Baltimore created an Ari Herstand radio station, these 100 people should get a special notification when I announce a show in Baltimore. There are over 600,000 people in the city, there’s no way I could find these 100 through general advertising or grass roots promo to get them out to my show.
Internet radio NEEDS to do more for artists to help connect them with their fans. It’s a FEATURE that fans would appreciate. A simple notification when a concert is announced in their city is not invasive. Hurry up Pandora! Hurry up Spotify! Hurry up Rdio! Hurry up Deezer! Hurry up Apple!
The conversation was steered towards curated playlists versus algorithm-created playlists and Cerda said that in a blind listening test he bets he could tell you which playlist was hand-picked and which was created by an algorithm. I’d like to see this test.
“Algorithms do a lot of things, but they don’t feel.” – Michael Cerda, Facebook.
The panel also has high hopes for what Spotify is going to do with The Echo Nest, “One of the deepest tech companies in music ever,” said Marcus.
They touched on Wonder.FM, which used to be WeAreHunted, which lists the top tracks on SoundCloud. SoundCloud has been enjoying success under the radar and has been the favorite streaming app to integrate into new music apps, startups and existing behemoths (like Twitter), however, now that they are striking deals with the majors and starting to officially monetize, forcing them to update their course, this could all change very soon.
4) Business Models For MusicTech Companies With Copyright Reforms
“The big problem in music tech right now is that the ecosystem has been broken for many years. If you ever tried to get funding when you’re trying to license music and sell it. It’s nearly impossible to do.” – Larry Marcus
Marcus is very excited about the live concert subscription service Jukely (which he is an investor of), where for $25 a month you can go and see “all the concerts you want” – of those that are actually signed up to the program of course. He claims it will have a great selection and discovery element to it. Currently it has launched in NYC, LA, San Francisco and Chicago. Of course this program will not include the huge arena shows. But might be a nice way to get more people out to see local and mid-level artists.
Marcus thinks that once the statutory rates for radio are updated there is going to be “the opportunity for people to invest in the space. I think you’re going to see a very exciting spreading and merging of radio and on-demand services.”
“I hope there is a shifted mindset for people who own the copyrights, the labels, to construct win-win deals. And that’s NOT about upfront cash payments. It’s where if the company succeeds then everyone succeeds.” -Larry Marcus, Walden VC
However with Lucian Grainge of UMG exclaiming that freemium, ad-supported subscription services “weren’t working for anyone except streaming services and music fans,” and Doug Morris of Sony Music saying that free music is causing the death of the music industry, don’t hold your breath that the labels will join in with Marcus’ dream anytime soon.
5) Winners And Losers
Cerda said “Apple is poised to be a big winner” with their (re)launch of their Beats-inspired streaming service. And that “Spotify if poised to be along time winner.” But he wonders how long Rdio and Deezer will last. However, Facebook has been in bed with Spotify for years now, so it’s no surprise that he believes in Spotify above all else.
Marcus discussed The Edison research firm which lists market share data from the consumer side for all listening services.
Marcus is excited about live music apps like StageIt and Maestro (where you can attend concerts from your couch).
Wiltsee believes the companies that will succeed are those that are embracing artists and helping them connect with their fans and helping them to sell to their fans. He said “there are billion dollar opportunities” which aren’t being realized in music.
Everyone was pretty uncertain about how SoundCloud is going to move forward now that they’ve fallen under major label rule.
6) Breakout Apps
The big winner at SXSW is the live broadcast from your phone app Meerkat. It’s been wildly adopted here at the festival from Pedicab rides to panels to the exhibit hall. Anyone can comment on the realtime live stream. Jimmy Falon, Julia Louise Dryfus and Al Roker have all name-dropped Meerkat. So it’s about to hit mainstream. I guess if Snapchat is too delayed, we now have Meerkat which literally cannot connect you any quicker to the action. I’m interested to see how this will take off.
Marcus is excited about Set.FM which is a near identical concept to the failed Live.ly, which enables fans to download the concert they just saw. Not sure how they’re going to succeed with this where Live.ly failed. But maybe they have better management.
7) What’s To Come?
“Algorithms can do a better job at live mixing than most people” – Larry Marcus.
He thinks the “Virtual Sound Guy” app is just around the corner. And with the notoriously shitty house sound guys, I’m interested to see what an algorithm can do.
+How To Fix The Sound Guy Problem
See Ari at SXSW:
Speaking
Wed, March 18, 2-3PM | “Band Website Extreme Makeover (part 1)” in Ballroom E
Thurs, March 19, 2-3PM | “Growth Hacking Through Music Tech” in Room 13 A/B
Saturday, March 21, 12:30-1:30 | “Band Website Extreme Makeover (part 2)” in Ballroom E
Showcase:
Friday, March 20th, 4:30 – 5PM | @ Sledgehammer | 503 E. 6th Street.
Larry Marcus is just blinded by science INVESTOR in Pandora, SoundHound and LyricsFind to name just few music ventures who can not find in all those investments simple, old fashion, farm market, STAND!
Man just stop the bullshit and tell music industry nerds under you umbrella to start collect CASH!
Music and internet are made for each other – music CAN BE SOLD just like apples on the farm market.
Just convert Radio and streaming to primitive DISCOVERY BASED $100B music store.
Pandora alone can have actual global revenues at $10B+ with multiple stock valuation.
SoundHound as one of the cashregisters of the new music industry would be subject to $5B IPO.
HOW DO WE START? I suggest for Larry THE INVESTOR to go see L. Grainge at UMG or L. Page at Google and talk into their GREED. It’s a no brainer to have $100B music industry by 2020. Let’s have some HONOR!
“Cerda said “Apple is poised to be a big winner” with their (re)launch of their Beats inspired streaming”
…and Beats are INSPIRED by WHO?
Mr. Ek?
What he is hoping for?
Both L. Grange and D. Morris have big hopes in Apple flavored suicide mode!
Sorry gentlemen, there are better ways to monetize music. INFERNO HAS TO STOP.
I really can’t see Apple ‘winning it all’ with YouTube sitting there, right next door. Google is dismantling the entire recording industry with a four-letter business model, it’s call D-M-C-A, and the labels never had the balls to challenge it properly in the courts (or even on Capitol Hill).
I’ve been a huge critic of the RIAA, which is proving itself to be a useless appendage at this stage. The CEO of the RIAA makes a multi-million dollar salary, for accomplishments that few seem to be able to list.
Meanwhile, there’s the Spotify ‘problem,’ if you want to call it that. If Beats is to have any chance with a paid-only, premium model, they’re going to need more than just juicy exclusives from Dr. Dre, Eminem and Maroon 5. They need to close the ad-supported, freemium free-for-all on Spotify, which effectively means dismantling the core business model that Spotify is based upon. The majors have a massive equity stake in Spotify… do they want to sabotage that as well?
Without addressing those issues, you’re merely waltzing ‘Beats’ (or whatever it’s going to be called) into the cauldron of death. It’s a suicide mission, Messrs. Morris and Grainge.
Get your 7 deadly sins, right here. “Freeessh Fishh”. (Aladdin)
Ask yourself, what would Pink Floyd do?
releasees
wheres
it’s
hell
along
rids
Falon
Louise Dryfus
Yes, exactly.
the most important aspect of all these different programs is the control of the copyright and licensing Apple new with the statutory rate for each song was and they built their platform near now with all of the streaming companies they are charging you a monthly fee however they are not disclosing how that fee maintains the overall day today operations of their companyI radio station is playing on royalties to PR old the formula dat prowns used should be the same structure used by streaming companies because that statutory rate of us all these more than enough room for this to take place understand technology is very innovative and put in his music into these capacities is just other means for encouraging investors to invest in ideas however when you don’t understand the true purpose of protecting the copyright of the music then you lose focus of how to build a strong class list take b for example Dr Dre has a very big name Jimmy ivene is to see you over there school records they put out a lot of great music now they’re doing it deal with Apple is Spotify and beat in order to stream music which is their catalog is nothing more than just do it covers in the platform of wait a minute that is it already or streaming companies is doing is cover records and they’re paying with the proceeds if it was a cover Rickby the way if the words is not correctly I didn’t type that I spoken to my Google speak type in his house leaving a comment but first you must understand the business of music in order to build proper structure in a lot of these tech companies understand the tech world would not the business of music so they building at platform based off of how they are innovative Lee get the music to the fans but when they understand the aspect of the business of music and they will learn how to build a more proper platform if I was to make a decision about how to build the best structure to go forward I think I will focus on Gracenote grace note is in Annex position to become of our house because they have all of meta data all the meta data is all the information which is the same as a library card because they have all the information now since that is where you must go in order to situate your copywriting your music is the library Congress so you know all the information is their house that’s where your security stand grayson old hoes all the meta data which is the information is how you build a platform from there YouTube Spotify Pandora all the s*** all come off the same premise of the library Congress once you have library Congress you copy written you have a serial number now your music is yours once you in mad at it no matter who use this title uses information I’m headed out of grace nope with you went there first you too have a great confident with releasing your music to the other Avenue strange before coming to you too which is great however you should still start from the bottom and work your way up
This whole thing is a joke, right?
SXSW? Mostly. It’s a platform for these guys who, other than their money, have nothing to show or expertise in the business whatsoever. Every year goes by, every year these guys who advocate all this horseshit, is another year their companies and/or investments make NO money, but continue to lecture us on “the way forward”.
It’s almost like they are there to prop up their stocks for the next 12 months.
SF Music Tech better be coming back. How else will these guys get into Forbes or Fast Co. to be quoted as “thought leaders”?
It’s all ego from talking heads who regurgitate the same stuff from previous Webnoize conferences. Round and round we go, but we expect a different result.
By far the single most important problem a music tech company needs to figure out is how a member of the middle class of musicians and artists which makes up 99.5% of all artists on the planet, can be exposed quickly to and be discovered by by the mainstream music listening public. Everyday this doesn’t happen is another day the new music business becomes less profitable and more irrelevant.
It sounds like your wanting these companies to formulate and step by step answer for artist on how to break through to mainstream success? Which there isn’t a generic answer for nor will ever be.
“Above fan funding, artists need to have more regular conversation with their audience. Artists shouldn’t come out and just say ‘come buy my merch or a ticket. It’s about a conversation. It’s about the perpetual cycle. You’re not just merchandising, you’re engaging.” Michael Cerda, Facebook.
I would like to say something obscene here, but will instead just say: NO.
If one hopes to be an artist, you don’t have time to be in constant conversation with fans. As a fan, I (speaking only for myself) can also say that I do not expect to have such conversations with the artists admire. Let them do their creative work, that is, create art. This “regular conversation” line is just to benefit FaceBook and other social media platforms; it has nothing to do with the creating art, and can in fact be a great obstacle to it.
Art is more than “content” or “merchandise”.
1) Video
It’s a mostly dead and outdated format and expenditure opposed to long term investment or asset, meaning it just doesn’t have the impact it used to as an artistic medium…
And as Facebook video inches closer to YouTube’s traffic, with 3 billion views A DAY
Vague stats inclusive of everyones baby, dog and cat videos and all the rude tube laugh at people videos, music is not one that adds much to the overall tonnage being shipped, music is like a stowaway on the might ship hoping to hop a free ride to a new wonderland…
Wiltsee advised that the traditional album campaign is outdated and doesn’t work anymore. He said that artists need to be releasing content all the time along with bundling in exclusives and special merch so “you can continually come out with new things to engage with that fanbase. An artist’s career is always in cycle. It’s a perpetual cycle.”
Which is just more of the business essentially ruining the MUSIC! Its like a dog trying to walk with the tail at the front…
The business dictating what and how the creators make the art/product, its backwards, it will lead to further devaluation and it will push music further into the background and even more and more towards commerce and corporate driven fodder…
The tech thought it would liberate artists to create art, instead its turning them into monkeys tethered to their work station pumping out manufacturing plant dosh, so both sides, the major commerce game and now the indy arteest hipster muso game, are both just mindless brain-dead manufacturing plants making copy prints of masterpieces all because businesses that rely on content and advertisement are dictating what and how music is and how its made…
Shortsighted thinking bantered by everyone who has no stake in the property or the product, just a stake in it being a straight commodity and unitizing it…
The album isnt outdated, the business of it might be changing or in flux, but its not outdated, the album is truly the height, the crest, the peak, the summit, of music, which allows songs to flourish and showcase themselves the best, which allows the artist and their business partners to best coordinate their efforts to showing and recouping the expenses put out in making the property…
The artistic cycle is one left free form too many restraints and rules and timelines, inspiration and magic strike like lightning, and tethering people to desks like working slaves to pump out content to appease tech businesses, well that aint the new power art dream theyve been selling, thats pure slave owning slave driving b.s. exactly the same as their poor propaganda they use to fight their enemies… 😉
The conversation was steered towards curated playlists versus algorithm-created playlists and Cerda said that in a blind listening test he bets he could tell you which playlist was hand-picked and which was created by an algorithm. I’d like to see this test.
“Algorithms do a lot of things, but they don’t feel.” – Michael Cerda, Facebook.
I agree…
Algorithms are garbage junk right now that cause more long term problems then most people even know or understand…
Curation for shizzle, stupid tech garbage bot algos screwing around, its dumbness, constant silicon valley tech garbage humiliating humans by empowering and making the software our overlords telling us what to do and making most people into moronic cattle drone robot fools unable to elevate themselves above little boxes on screens etc.
People forget, music is all feel and all emotion, and while its a somewhat structured art-form, its all bloody feel… Its gone way to technical and mechanical, robots are good for repetitive tasks, but man those weird tech guys just think their little algos and robots are better then humans and the human ability to feel and think and have emotions…
Show me a sonny robot and then we can maybe talk about a decent algorithm, until then music needs to go back to all feel and then deal with the business of it after its been built…
Its like housing and real estate, the whole world has become throw away and cookie cutter, thousands of people living in a tiny little square on the map all in the same house, without a number on the front of it they couldnt find their way home…
its awful, short sighted, dehumanizing, garbage…
🙂
And no app will beat a good human at mixing, that’s a terrible joke, it ain’t got ne feel baby baaaaaaaabbbbbbbbby…
but I guess all the Indy hipster muso wannabe lennons etc. can’t make the money needed to pay a warm body so itll help them I guess sell their fraction of a penny product and make another tech geek a Milly or billy player…
Part of me just wants to say F all the internet except for the download stores, send releases to radio, and if they’re good enough, then they will get traction on radio, listeners will come to my site, and Bandcamp, maybe Soundcloud, if they aren’t already corrupted.
I can’t handle the way Youtube and Google in general treat all creatives, it’s so deeply condesending, I don’t want anything to do with them anymore. And Facebook isn’t rewarding anyone for posting on their giant money-making machine. They make me ill.
By far the single most important problem a music tech company needs to figure out is how a member of the middle class of musicians and artists which makes up 99.5% of all artists on the planet, can be exposed quickly to and be discovered by by the mainstream music listening public.
The “mainstream” music listening public is a hyper niche and totally fragmented audience. Which “mainstream” would you like to target – 18-24 white college attendees with annual family incomes over 150k or 35-44 married Latino family members that account for some of the fastest growing mainstream audiences in America?
Do you want to target modern country listeners who don’t listen to modern urban contemporary, or active rock/metal males?
Going mainstream is often meant to say “those acts that show up at the top of the charts.” I suggest that has more to do with mythology than actual understanding of who buys what in the marketplace.