2018: A New Year with New Goals

a95xAVhP_400x400-3

Perhaps the last picture I’ll post with my trusty iPhone 4S

2017 is over and 2018 is now here. That’s a good thing; last year was a tough one. A few very close relationships ended, and after a few years, I closed my first company. But I also learned that there is life after failure.

So here we are now in the new year, and I’m excited to start working on a bunch of new things. Here are some of the things you’ll see from me in 2018: 

  • 😎 🎸 I’m working on a new music project (company? 😎 ). That’s right — after a badly needed six-month hiatus (maybe longer?) from actually running a music-startup, I’m gathering feedback on a new idea which is incredibly exciting. So far, feedback has been very positive. Discussions with a select number of artists as well as a few journalists, founders, and confidants have yielded an ever-clearer perspective on how this can grow. I’m excited to read more people into this as the year progresses.
  • 📝 I’m working on editing a very special document that I’m extremely excited to finish. I’m a word-nerd, and in editing this piece, I can honestly say it’s been one of the most challenging and rewarding things I’ve done in my professional writing career.
  • 📝 🤘 I have an avalanche of new music articles written and in the works which I can’t wait to see published. Some of these will shake things up (I hope), but hey, what’s the point of being a music journalist if you’re not a little punk about it? 
  • 📝 📽️ I’m working on writing a rough draft of a screenplay (no, really!). Last year, I was kicking around an idea which I thought could be fun to work on, and over the last week, I’ve started mapping out characters and basic scene dialogue. I’ve never done a screenplay, so I am more than happy to have collaborators!
  • 🙋 🙋‍♂️ 🙌 🤝 I will start driving harder towards being more central to the discussions on sexual harassment and how to fix the issues we have before us. This is less of a “me” thing, and more something I am incredibly passionate about; I am open to collaborating with anyone on projects which will help with the goals of creating a paradigm with more meritocracy, equality, and egalitarianism. 
  • 😎 🎙️ I’m incredibly excited (and flattered) to have an invitation to be on a few podcasts starting this year — because I don’t talk enough as it is ha!
  • 🤔 📝 I’m working on plans for a new guide which will (hopefully) excite word-smiths everywhere; more on this project in the coming months. 
  • 📝 📖 I’m writing a pseudo-review of a book I’ve been reading which has changed my perspective on so many things, and has similarly confirmed a lot of the mantras which I try to live my life by. This will be out by the end of January.
  • 📝 🤝 I will be releasing many new articles in my Minimum Viable Network series.
  • 🎸 😉 I’ll be doing more work with artists (some have asked me to manage ha!) — maybe there’s a producer-credit in my future.  
  • 🤔 📖  There are a few of my past articles which I have been toying with revising into a rough pitch for a book. Let’s see what the year brings. 
  • 😄 I will be exploring more speaking opportunities.
  • 😎 🤘With the 2017 list out, I’m ready to start working on the new “100 Awesome Independent Album and EP Releases You Probably Missed” list for 2018.
  • 😄 🙌 I’m excited to start having * Many * More * Conversations * — I’m all about creating new things, and I look forward to picking up new projects throughout the new year, both with current partners in crime and new draftees.

Thank you to everyone who helped me pull through 2017. Your support means more than you know. Now, on to 2018!

***

Find me on Twitter @adammarx13 and let’s talk music, tech, and business!

100 Awesome Independent Album and EP Releases You Probably Missed in 2017

Here we are, back in December, and everyone knows what that means: more “Best of…” lists trumpeting the best new music on the scene. And as always, so much of the independent world flies completely under the radar.

For the last two years, I’ve drawn up lists of “100 independent albums and EP’s you probably missed” during the year. Here they are:

Now it’s time for list number three, and I am so excited partly because of how the map is expanding to include places which weren’t touched in the first two lists.

As with the first two lists, these 100 albums and EP’s come from artists all over the world. This year’s list includes artists from: Canada, the U.K. (England, Scotland, and Wales), Australia, Switzerland, France, Sweden, Russia, Finland, Belarus, Romania, Slovakia, Brazil, Japan, South Africa, Greece, Myanmar, Spain, Portugal, Chile, Serbia, Austria, Argentina, Ukraine, Indonesia, Poland, and 28 different U.S. states. The independent world is very, very big.

I’m also pleased to see an evolution of my own tastes and appreciation; this year’s list includes more pop, electronic, R&B, and jazz influences, obviously mixed in with a healthy helping of alternative, rock, and metal.

So here are 100 of the albums and EP’s that you probably missed in 2017. All were released during the 2017 calendar year; imagine if the mainstream paid attention to all the artists out there, and not only the handful we hear about.

As always, albums are in no particular order.

Go expand your universe. You’d be shocked at what you discover.

1. Why Am I Swimming Around Like This? — Fishtank — London, England, UK

a3501481361_16

2. Tube One — Okto Vulgaris — Chur, Switzerland

a2739877901_16

3. Space — The Head — Atlanta, Georgia, USA

a3633922577_16

4. It’s Butter – EP — It’s Butter — Los Angeles, California, USA

a3412407991_16

5. Grace Blue — Grace Blue — Los Angeles, California, USA

a2874590878_16

6. Machine — Hello, Mountain — Denver, Colorado, USA

a4169426487_16

7. The Hurricane EP — Morganway — Norwich, England, UK

a0284464990_16

8. Tooth & Nail — Freya Wilcox & The Howl — Brooklyn, New York, USA

a2462796278_16

9. Orphan Planet — Orphan Planet — Portland, Maine, USA

a3147656521_16

10. The Truth & The Lie — Skies Collide — Brisbane, Australia

a2252514473_16

11. Commitment Issues — Anyone’s Guess — Orlando, Florida USA

bluebackgroundnew

12. Dark Matter EP — Auditory Armory — Altamonte Springs, Florida, USA

DARK_MATTER_2017

13. Golden — The Talking Hours — Albuquerque, New Mexico, USA

a4245788405_16

14. Animals — Blue Eyed Sons — Helsinki, Finland

a3953627931_16

15. Dark Swallows — Dark Swallows — Boise, Idaho, USA

a4272996496_16

16. Everything You Ever Wanted — Street Pieces — Brisbane, Australia

a0933132660_16

17. The Trouble With Teeth — Little Coyote — Toronto, Ontario, Canada

a1875522896_16

18. A Flood — Twin Strike — Brooklyn, New York, USA

a3570763004_16

19. Bad Habit — Beth Blade and The Beautiful Disasters — Cardiff, Wales, UK

Album-Cover-810x810

20. Skiddish — The Fallaways — Vancouver, British Columbia, Canada

a3298091121_16

21. Flux — Form Constant — Birmingham, Alabama, USA

a0109579812_16

22. Background Noise — Treading Water — Boston, Massachusetts, USA

a3963802106_16

23. Breaking the Line [EP] — The Strikes — Souchez, France

a1828716952_16

24. Wide Open — Weaves — Toronto, Ontario, Canada

a3425469303_16

25. Eclipse Of The Sun — Liquid Sunshine — Zurich, Switzerland

a1148978511_16

26. Worn Out Heart — Hollow Sidewalks — Portland, Oregon, USA

a0162203155_16

27. Start a Fire — The Burn Ins — Elkford, British Columbia, Canada

a2386017023_16

28. Coyote Gunfight — Dynamite Thunderpunch — Cincinnati, Ohio, USA

a2297308668_16

29. Monuments EP — Stereo Honey — London, England, UK

a1517693734_16

30. The Gang — The Gang — Bratislava, Slovakia

a0544071870_16

31. Drive — Sidewatcher — Detroit, Michigan, USA

a2028919262_16

32. End Times — Brother Sister Hex — Denver, Colorado, USA

a2173203830_16

33. Speak — Honey & the 45s — Chicago, Illinois, USA

a2854005861_16

34. With – EP — Fencer — Los Angeles, California, USA

a2690374378_16

35. Soul Sickness — The Versa Contrast — Revere, Massachusetts, USA

a1493214885_16

36. A Sign of the Times — Cold California — Aberdeen, Scotland, UK

a2320703030_16-1

37. Auto Racing EP 2 — Auto Racing — Ottawa, Ontario, Canada

a4206061864_16

38. Note to Self – EP — Ready The Prince — Toronto, Ontario, Canada

a3750340326_16

39. Decade — Fighting Jacks — San Jose, California, USA

a1285525706_16

40. Gates Of Expression — Wildchild — Sibiu, Romania

a0182253842_16

41. virus. — Novembervägen — Stockholm, Sweden

a2433463850_16

42. Hypnotic Illusions EP — Living Still Life — Sydney, Australia

a2700095155_16

43. A Show For No One — Just Noise — Des Plaines, Illinois, USA

a1513185808_10

44. All Systems Go — CODED — Cape Town, South Africa

a4173822596_16

45. Wasted EP — Kreepy Krush — Minsk, Belarus

a0051590971_16

46. Better Days — The Clock Tower — Fukuoka, Japan

a4272871788_16

47. Tales of Betrayal and Deceit — The McMiners — Belo Horizonte, Brazil

a3020811943_16

48. Black and Blue EP — Little Raven — Nashville, Tennessee, USA

a1405749430_16

49. Hydra Plane — Hydra Plane — Baton Rouge, Louisiana, USA

a1945471753_16

50. Arcadia Feliz — Attikus Finch — Pamplona, Spain

a2895810528_16

51. Sublimation — Gravelarks — Pittsburgh, Pennsylvania, USA

a3871912975_16

52. The Words We’ll Never Say — In Good Nature — Boston, Massachusetts, USA

a3445075492_10

53. Polaroids — A Fire With Friends — Scranton, Pennsylvania, USA

a3031439927_16

54. Plan Of Action — The Kingpins — Montreal, Quebec, Canada

a1511252187_16

55. No Time to Die — Daeodon — Louisville, Kentucky, USA

a3673536554_16

56. Relics & Cycles — Before And After Science — Oporto, Portugal

a2409912978_16

57. In Arcadia — Field Of Giants — Oxford, England, UK

a0726257664_16

58. REM — SIAN — Tokyo, Japan

a0891075555_16

59. Aura — Set Fire — Boston, Massachusetts, USA

a2257438036_16

60. Karate Break EP — Karate Break — Minneapolis, Minnesota, USA

a4188253864_16

61. Starla — Starla — Tacoma, Washington, USA

a3406417297_16

62. Fine Motor — Fine Motor — Reno, Nevada, USA

a1734165334_16

63. Clones — Naked Shark — Ann Arbor, Michigan USA

a0580314100_16

64. Salting — Keeper — Washington, D.C., USA

a2176036062_16

65. Radio Silence — Paranoir — Thessaloniki, Greece

a1619123284_16

66. Secret Demo — Shadow Party — Minneapolis, Minnesota, USA

a0687750269_16

67. Flying High — Laneslide — Petrovsk, Russia

a3172646584_16

68. Weight — Old State — St. Louis, Missouri, USA

a3827160454_16

69. Playground — Paranoid — Lille, France

a2781691299_16

70. Crash The Gate — Cab Ride Home — Manassas, Virginia, USA

a2047885753_16

71. Space and Grit — Domestic Blend — Omaha, Nebraska, USA

a0247209626_16

72. Attic Salt — Attic Salt — Springfield, Illinois, USA

a1956230470_16

73. Demo — Piines — Toronto, Ontario, Canada

a0117864883_16

74. Heavy Dreaming — Painted Shut — Garden Grove, California, USA

a4043210630_16

75. MUTT E.P. — Whorehound — Terre Haute, Indiana, USA

a2605582934_16

76. Cinder Box — Cinder Box — London, England, UK

a4276138801_16

77. Heavy High — Bruiser Queen — St. Louis, Missouri, USA

a4245655128_16

78. The Endless and Unseen — Like The Ocean — San Francisco, California, USA

a2423147567_16

79. In Plain Sight — Elastic Blur — Downingtown, Pennsylvania, USA

a1923498168_16

80. As Far As The Stars — Nine Year Sister — Queensland, Australia

a1940360780_16

81. Fever Dreamin’ — Billy King & The Bad Bad Bad — Austin, Texas, USA

a2765121242_16

82. Sleep — Fawner — Cheltenham, England, UK

a2316748517_16

83. The Forge Sessions — Hot Raisin — Norwich, England, UK

a1547230113_16

84. Primeval — Iron Heade — Rancagua, Chile

a2264185585_16

85. Escapade — Pandelic — Yangon, Myanmar

a0925884476_16

86. Patterns — Longclaw — Portland, Oregon, USA

a1012873874_16

87. Defector — HEAVYCRAFT — Cedar Rapids, Iowa, USA

a2684102127_16

88. Change — Traces — Tamworth, Australia

a4042357359_16

89. Thomas — The Shaftons — Vienna, Austria

a1355688712_16

90. Parasite — The Coathangers — Atlanta, Georgia, USA

a2728717029_16

91. Widower — Widower — Sydney, Australia

a3762932554_16

92. Rock for Life — Early Grey — Moscow, Russia

a3807475436_16

93. First Attack EP — Snappy Strokes — Krakow, Poland

a3747245725_16

94. The Story — Oceantides — Kiev, Ukraine

a1323027982_16

95. Forgiver EP — Shoplifters — Novi Sad, Serbia

a2769306635_16

96. Skoll — Astro Diver — Charlotte, North Carolina, USA

a4282748053_16

97. Alter Ego — Replica — Buenos Aires, Argentina

a3308798063_16

98. The Best Things — Beat Off! — Kediri, Indonesia

a2475114162_16

99. Kings – EP — August Tides — Cleethorpes, England, UK

a3066317436_16

100. Demos 2017 — Goodnight Cairo — Seattle, Washington, USA

a2373189228_16

***

If you enjoyed this please share, and feel free to Tweet me. Let’s talk music and tech!

Without Majors, SoundCloud Had The Potential To Be A Better, Independent Music Space

Originally published on Crunchbase News on August 21, 2017.


It’s no secret that SoundCloud is troubled. Last month, news broke that the music streaming service slashed 40 percent of its workforce (173 jobs) and closed two of its offices (London and San Francisco). Two weeks ago, it dropped its founding CEO to secure new funding on the back of reports that it could run out of money within 50 days or so.

soundcloud (1)

The developments weren’t without augur or portent.

SoundCloud’s current situation brings us back to our prior thesis: namely that the company’s shift into the major label paradigm was a tactical error. And due to that mistake, SoundCloud lost its focus on an exploding demographic in the form of independent music, which it initially showed signs of controlling.

Rising Red Ink

Let’s run the numbers quickly. As I noted in my previous piece, Soundcloud’s revenue has grown for years. In 2010, the company recorded $1.8 million in top line; in 2012, $9.6 million; and, in 2014, $19.6 million.

But those gains came with rising losses. Soundcloud lost $2.01 million in 2010; $14.9 million in 2012; and $44.2 million in 2014.

The trend of impressive losses continued into 2015, when SoundCloud’s revenue increased by 10 percent to $22.5 million. Unfortunately, for the company, its losses grew by a larger 23.5 percent to $54.6 million in 2015.

And according to a recent Music Business Worldwide analysis, even post-cuts, Soundcloud won’t cut expenses to fully ameliorate its rising costs and royalty payments.

Major (Label) Gamble

Its cuts in staff are indicative of a larger problem. Namely, SoundCloud’s royalty payments are expensive. If Soundcloud’s payout to the major labels is similar to Spotify, it could reach the 80 percent mark of its subscription-sourced top line; in related topics, SoundCloud has consistently declined to comment on how much the major labels own of the company.

Adding to its financial picture, SoundCloud opened a $70 million credit line to keep its doors open.

While major label deals grant SoundCloud access to the world’s most popular catalogs, the royalty payments accompanying that catalog can be a Sisyphus-like experience.

The accompanying costs are high. For example, growth only accounts for one factor in determining a royalty payment. Other factors can range from the labels’ own fiscal bottom lines (which no streaming service can control) to the labels’ employment of a Most Favored Nation clause in their streaming contracts.

Major label content is also available through an array of streaming options: Spotify, Apple, (now) SoundCloud, Pandora, Tidal, and so forth. Given the number of services offering major label tunes, access to that content doesn’t make a streaming service unique. Rather, it gives the major labels outsized influence on a streaming service’s content offerings.

In Soundcloud’s case, the new major label paradigm likely impacted the now-beleaguered music streaming company in two ways:

  1. Major label deals changed SoundCloud’s value proposition. Due to its major label deal, Soundcloud could sell the same major label content as Spotify and Apple. SoundCloud would no longer be the home only for independent audio,  putting a pin in what arguably made the streaming service unique.
  2. The major label deals now required SoundCloud to pay the same piper as Spotify, Apple, and others.

All of this amplified SoundCloud’s already-noted strategic shift, and potential misstep: moving away from the independent music demographic—a group that it had performed well in previously.

Up until autumn 2015, SoundCloud primarily subsisted on independent music and user-generated content. But in the time it took SoundCloud to switch paradigms from the independent universe to the major labels, the market had changed. Whereas independent material up to 2015 was considered disinteresting to general consumers due to niche appeal, by the end of 2016, independent music streaming revenues made up $5.1 billion of the industry’s total haul of $16.1 billion. In fact, the independent market outsized Universal’s cut by more than $500 million.

Multiple arguments can be made about what has led the independent demographic to become the largest pie of the streaming-revenue pie. What’s clear, though, is that the old trope that’s been widely circulated about independent music—that nobody cares and it doesn’t make any money—is likely false.

From 2003-2012 alone, the independent landscape exploded in terms of participants. And it’s that market that Soundcloud likely ceded ground on due to its deals with major labels.

What Ifs And Takeaways

All this underscores SoundCloud’s decision to start down the major label path.

If it had made the same job cuts and office closures in 2015 that have now been enacted, then Soundcloud might look very different. The company might have been able to close the gap long enough for the numbers to show—as they are now—that independent music is a real area of growth in the music universe.

If that had happened, it might have given financial-credence to its massive independent catalog, independent-enthusiast userbase, and independent reputation. But the major label paradigm is like a lobster-trap; it’s very, very hard to back out of once you’re in.

Of course, all that assumes that Soundcloud would have been able to settle lawsuits and figure out a way to monetize its gigantic repository. Assuming it could, SoundCloud might now be the clear frontrunner in its own arena of music, almost completely removed from the whims and dynamics of the major label world which Spotify and Apple have to contend with.

What’s important to recognize now is that the music universe is multidimensional, and, with the explosive growth of independent content, it’s adding new layers by the day. SoundCloud’s plight should encourage—not dissuade—future would-be music-tech startups or entrepreneurs and investors. Let Spotify and Apple battle it out for the major label world; the independent universe is growing quickly anyway.

Whether it’s too late for Soundcloud to take advantage of that growth will depend on its ability to navigate its choppier, less-funded, waters.

The Streaming Wars Continue, And SoundCloud Is In The Balance

Originally published on Crunchbase News on May 17, 2017.


soundcloud (1).png

It’s been a challenging year for SoundCloud. And its last quarter hasn’t made things any easier on the music-streaming startup.

Amidst a streaming war between Spotify, Apple Music, Pandora, and others, SoundCloud’s orange cloud is greying. Spotify passed on buying the company in December, it’s seen a patent dispute, a high-level shakeup, and multiple reports (here and here) have explored the possibility that it might run out of money by the year’s end.

The news has not been good for SoundCloud. (When contacted, SoundCloud declined to comment on its financial situation.)

So what comes next for the music company? The answer to that question is anchored on three points:

  1. The economics of streaming for non-label players.
  2. SoundCloud’s efforts to expand past its original, core user base.
  3. Its efforts to stabilize allegedly difficult financials.

We’ll approach each topic respectively to get a handle on how it will impact SoundCloud.

Streaming 101

To understand SoundCloud’s current financial situation, we have to understand streaming economics.

Streaming companies license material from two main sources: major labels and independent artists. In SoundCloud’s context, it’s the first content source which matters. Major labels set the standard royalty rates which services like SoundCloud must pay for access to their critical libraries.

It is notoriously difficult to pin down what a private music streaming company is paying in royalties. For companies like Spotify and Soundcloud, royalty payouts can total in the neighborhood of 70-85 percent of a company’s revenue.

To that point, rates released in reference to Spotify over the last few years have been all over the map. In 2013, Spotify released (via Stereogum) its own accounting of its royalty payout structure, which detailed that ~30 percent of generated stream revenue stays with Spotify while the other roughly 70 percent went to labels, publishers, and others. There was no mention of any additional costs.

In August 2016, however, Music Business Worldwide calculated that ~84 percent of Spotify’s topline went out the door for “royalty distribution and other costs.” Again, those other costs were not defined. Music Business Worldwide then followed up on its first statement and calculation with the note that Spotify’s precise royalty payout is believed to be just under 70 percent.

In 2017 alone, TechCrunch reported that Spotify’s royalty payout was 70-72 percent, except when other factors—like catalog geography and free vs. paid streaming—could bump the royalty payout as high as 84 percent. All this was before Spotify’s new deal that supposedly lowered royalty payouts in exchange for windowing. The aforementioned “extenuating factors” are so important to acknowledge precisely because they affect so much of any music company’s catalog.

So is Spotify’s royalty payout less than 70 percent, 70 percent even, 70-72 percent, greater than 70 percent, or even up to the low 80s? No one really knows except Spotify and the labels. Even using Spotify as a bar for understanding SoundCloud’s royalties leaves us convoluted

Of course, streaming services have an interest in limiting their payout rates, but streaming companies don’t have much leverage due to an imbalance of power. If SoundCloud or Spotify don’t have a major label’s catalog, either one could immediately start to shed subscribers to competing services not locked into the same label fight. In music streaming, platform diversification only flows in one direction.

Shifting Priorities

The streaming cost matter puts SoundCloud’s recent strategies into context.

SoundCloud cut its teeth licensing content in the independent world, a much different paradigm than Spotify or Apple Music. Because it built its success on independent material, SoundCloud wasn’t beholden to the major label oligarchy for material.

Priorities shifted when SoundCloud changed direction and pursued major label content on top of its independent catalog.

It signed deals with every major label, leading to a new direction for the company. When pressed last year, SoundCloud responded with the stark “no comment” on how much equity it may have provided to labels for access to the respective catalogs. Additionally, most of the deals hinged on SoundCloud releasing an on-demand premium service to directly compete with Spotify and Apple.

By summer 2016, SoundCloud had evolved into another major label distribution platform. This effectively posed the conundrum of potentially alienating its initial userbase, which might not have been inclined to see another mainstream music service as necessary in the first place.

Compounding the mainstream content conundrum, SoundCloud’s new catalog was the same mainstream content that its direct competitors were distributing. Further, SoundCloud was now compelled to build a new product to directly compete with Spotify, putting it in a position where it held less power for the content it licensed while burning money at a ridiculous rate.

Challenging Financial Realities

All that sums to the company’s current financial situation.

In order to understand the company’s fiscal situation as it stands today, it behooves us to remind ourselves what we know about its past performance.

As I previously wrote, SoundCloud’s financials in December of last year were as follows:

Revenue tracking upward (source):

  • 2010 – $1.8 million.
  • 2012 – $9.6 million.
  • 2014 – $19.6 million.

With losses ballooning (source):

  • 2010 – $2.01 million.
  • 2012 – $14.9 million.
  • 2014 – $44.2 million.

Based on the new numbers, SoundCloud’s revenue saw a 10 percent increase from $19.6 million in 2014 to $22.5 million in 2015. Its losses, however, increased dramatically by 81 percent, from $44.2 million in 2014 to $54.6 million in 2015.

Debt and Irony

Most recently, SoundCloud raised an additional $70 million in debt funding. With this round of debt funding, it’s likely that SoundCloud is trying to follow Spotify’s example by doubling down on their growth numbers long enough to find an exit. The problem with this strategy is that SoundCloud is nowhere near as big as Spotify, perhaps lowering its M&A potential. While this strategy presents challenges for Spotify as well, the analogy ends right there, since SoundCloud’s debt is barely a pittance of Spotify’s $1 billion debt raise.

Spotify’s delayed IPO casts a shadow of doubt on its smaller rival as well. If the company most obviously in line to acquire it has its own challenges to contend with, it’s clear that its attention will be on its own IPO, rather than a bail-out acquisition of SoundCloud—even at a fire-sale price.

Unfortunately, the reality for SoundCloud is this: the company has extremely unwieldy financials, and its main competitor—the company most likely to acquire them—just delayed its own IPO in order to figure out its own financial situation.

Uncertain Future

The faster that SoundCloud tries to shift to become more like Apple Music and Spotify, the more it runs the risk of highlighting it wasn’t trying to be like the standard streaming services at all.

Whether or not the summer will bring back the orange in our grey cloud remains to be seen.

Unbundled, Part III: Democratizing the Future

Why democratization and identity are the future of music.

1-e4y3jsz54uhez2xfyc51q

This is the final entry in the Unbundled series on music dynamics. Read the previously published pieces here:


unbundled

Power, Gatekeeping, Scarcity, and Democratization

Which brings us back to the last step in the cycle: unbundled once again. Only this time, the unbundled dynamic refers to power and ownership. The new unbundled form of power—referenced above—removes the focus of power from the major labels and fractures it, splintering it to varying degrees among the plethora of new artists and startups now emerging.

This is the best thing that could happen because it leads to a more stabilized version of meritocracy in music. The top-heavy, unbalanced paradigm of major label control over everything that a fan is exposed to is ending, and being replaced with a much murkier—but more expansive—reality. This in turn affects scarcity and gatekeeping on a massive level.

Scarcity is obsolete; democratization wins.

Ownership

Perhaps the most prickly point here is the concept of ownership in the new age. This is a contentious topic even among friends, and no one really knows what the landscape is going to look like in the next few years. What can be surmised, however, is that concepts of ownership of musical material are evolving. Sampling and other trends in electronic and DJ music, along with self-recording and independent releases, have muddied the waters of who owns what and to what extent.

Now the action of covering or remixing someone else’s song and posting it online bristles feathers. But (most) artists who do this also attribute the proper credits to the original artist(s)—many times in the cover or remix’s title—simply because it’s the right thing to do and because it helps them to disseminate their new version.

Asserting that cover songs and remixes hurt the original artist is a cloudy and jaded argument at best.

Yet, the argument can be made that with this new overhaul in ownership orthodoxy, perhaps the right people are now able to own the things they should have been able to all along. Let us not forget the reality of master tapes (where a record label owns the rights to an artist’s original recordings) which so many artists have regretted. Controlling one’s own material, and deciding what to do with it, are the ultimate power plays an artist can make. Appealing to this new sense of power is the best avenue for emerging music startups to make.

Such a concept is fairly reminiscent of a point Daniel Mark Harrison makes in a piece regarding bitcoin, wherein he illustrated that controlling access to material is the ultimate power: “…any major purchaser goes direct to a Bitcoin ‘miner’…and negotiates steep discounts for their volume purchase action.”

In this scenario, the music fan is the purchaser, the artist is the bitcoin miner, and the service that serves as a conduit between the two is better off appealing to and providing value to the artist rather than only the fan. Both are important, but the latter controls the material which the former wants to consume.

Money and Community

One of the loudest major factors that floats around is the argument over money, from streaming, downloading, merch sales, ticket sales, etc. Let’s be clear though: streaming and downloading—the purchase of musical material—is not where the real money is for artists. It never has been. The money has always been in the merchandise and live ticket sales. What does this mean nowadays? Community.

While it is certainly arguable and many times probable that new unbundling dynamics have struck at artists’ ability to make money from the sale of their music, it is equally arguable that it has enabled them to make money from other, more lucrative, avenues.

An artist can only sell a $10 album so many times (unless you’re a major label darling). Their real bread and butter is in their community cultivation: growing their base, getting people to come out, getting people to spread their music and message, and capitalizing on those efforts. Streaming and downloading revenue is at best a holdover until a better stream is tapped.

The dynamics that exist now in this new unbundled world provide new opportunities for artists. Now, they don’t need to make their money off music sales or streams. Enough access to fans and communication/funding tools exist that they can actually give their music away for free and turn a profit somewhere else.

And this is exactly what a growing number of artists are choosing to do.

The dissemination of their material onto a global stage is much more important than a few album sales here or there, and leads to better things on the other side. A more expansive universe brings more shows, more exposure, more true fans, and more branding opportunities. These are the real things that grant artists staying power.

The Expansive Powers of Identity

Lastly, there is identity. I examined in a previous piece how we’re seeing the rise of “identity platforms” in media. Music is no exception to this. In fact, it might be the shining example of it.

Identity gives music—and by extension all art—certain powers that contribute staying power. Identity is so powerful precisely because it exists independently of genre, mainstream recognition, money, or history; it’s unique in it’s own ability to build bridges where previously there were none. Regarding music, identity brings together people on a core level that can almost supersede differences they might otherwise have.

The power identity—especially in relation to art and music—in its potential to create ever-expanding identities—to create communities. Money is certainly a factor in this, but if a shared identity which draws people towards one another, and can shield them—for better or worse—from outside forces seeking to compromise that unique, collective identity. As music is given the ability to disseminate more and more, more communities will arise around newly-minted identities, and art as a whole will become more lush and layered.

In the wake of these trends in art, music, and media, the power will lay with companies and platforms to not only cultivate these newly emerging identities, but to provide fertile ground for even more embryonic ones. Music becomes a vessel for the expansion of art and identity.

The Upswing

Where does this leave us? In unchartered territory to start with. Artists will continue to grow their power as new technologies make the opportunities possible. The companies which see this trend and capitalize on it will be the ones to stick around and do well. The others, however, who are resistant to this new set of events, will find it challenging to court artists and acquire material if they are determined to hold fast to a paradigm that was beneficial mostly to the major record labels.

Independents artists, and consumers of all strata (not merely the mainstream), will not be ignored or marginalized anymore. They will continue to experiment with the bundling/unbundling process until they find the right fit for themselves, and for their careers. There will be less of a set standard that all need to conform to, and more of a flexible set of possibilities and avenues for people to mix and match to reflect their changing personal experiences.

The future of music is three things: freedom, community, and democratization.

***

Find me on Twitter @adammarx13 and let’s talk music, tech, and business!

Unbundled, Part I: Reformatting the Barriers

How unwrapping the previous barriers is changing music.

1--e4y3Jsz54uHEZ2XfyC51Q.jpeg

This is a continuation of the Unbundled series on music dynamics. Read the previously published piece here:


The first movement in this symphony is the “unbundled” piece. It’s all about “reformatting” the conceptual barriers that initially existed for decades. It’s divided into two parts: Choice and Format.

The former is an exploration of how choice has evolved with the changing technology, and how it’s taken on a power it previously lacked. The latter, however, discusses how new formats have changed music and broken down barriers which artists historically were—most times—unable to scale. Similarly, it’s given light and life to format types which for decades have been ignored by the broad base of music consumers, except perhaps for the most die-hard fans.

unbundled

Choice

The first and most obvious form of unbundling in the music industry is the industry itself; no longer is there simply one music industry to partake in.

Now there are multiple, and they exist as completely separate universes; the major label mainstream, the exponentially growing independent industry, and everything in between. Along with this kind of unbundling of different musical arenas comes a freedom for music fans to explore in new ways.

Where non-mainstream fans were once relegated to shoddy mixtapes and bare-bones independent releases (which many times meant lower quality), now they have a plethora of music sources to choose from, as do all music listeners.

This leads to a level of choice the likes of which has never been seen in music. Now, it’s realistically possible to exist as a music fan outside the mainstream in a holistic way. You’re able to not only find the music that you like, and which speaks to you, but are similarly able to take advantage of growing communities of people like yourself. With the free access to all this new material comes access to other like-minded people.

This is community.

Chris Saad pointed to two distinct contributing factors which have lead us in this direction:

  • Reducing the cost of inventory and discovery to, in many cases, zero or near zero
  • Reducing the cost of direct communication and orchestration with more people at once—bypassing the need for manual mediators/editors/orchestrators/curators

Format

Saad’s post also mentioned this within the scope of musical format. What was once a record and CD has now become digital information, thus with more power to disseminate. Even the album format itself is restructuring, as fans looking for a single-song experience are abandoning the long form in favor of something musically shorter.

But this has a swing dynamic as well; while some argue that the album format is dying (or is already dead), many see the opposite.

The unbundling of the album format has actually given it more power than it had before. Now, when an artist chooses to create a full album, a fan knows that there is an artistic meaning behind that, rather than a record label’s fiscal bottom line.

It also lends long-overdue validation to releases that fall in between singles and full albums. EP’s and double-sides have long been ignored by most but the hardcore fans. Now, however, they exist with the same legitimacy as their gaunter and fuller peers.

The Ironic Thing

The ironic thing about these two points—choice and format—is that they’re inherently about one overarching concept: community.

As choice expands and begins to encompass formerly ignored genres and artists, new communities have the ability to coalesce and thrive. Choice isn’t merely about having new material for already established communities to engage in; alternatively, it can lead to a mixing of communities that otherwise might not happen.

Punks and jazz fans may begin to mix over a new punk-jazz fusion genre, and people who otherwise would never have met one another can now suddenly exist alongside each other. This leads to an increased level of creativity and an exponential production of creative material.

And this material is further disseminated throughout communities—splintering them and rebonding them—through new formats of information technology. Communities cease to be rigid and orthodox in their functionality towards music and instead become more elastic—they become living, breathing things which grow and continue to evolve.

This is the unbundling process within music as it should be: an unwrapping of previously rigid dynamics that lends more flexibility and power to the overall process of community cultivation.


The next movement in the symphony will be Part II: Shifting the Paradigm, which will take a look at the BUNDLED dynamic. Concepts discussed will touch on how bundling — but doing so incorrectly in the new era — impacts music consumption and community cultivation.

Stay tuned!


Find me on Twitter @adammarx13 and let’s talk music, tech, and business!

Unbundled: Introduction to the Bundle

Why the unbundling of the music universe matters.

1--e4y3Jsz54uHEZ2XfyC51Q.jpeg

In recent years, the dynamics of bundling and unbundling have changed everything in media. But they’ve had an especially palpable effect on music.

This is an exploration of the bundling and unbundling dynamics taking place in the music universe right now. Because of the massive amount of information discussed herein, it is necessary to cover it in series of parts, each explaining a particular aspect of change and restructuring.

This series will appear as the following:

  • Introduction to the Bundle
  • Part I: Reformatting the Barriers
  • Part II: Shifting the Paradigm
  • Part III: Democratizing the Future

Additionally, all four pieces (including the introduction) will subsequently appear as a single, holistic text, entitled: Unbundled: The Story of Music.

This is the first entry in the story.

A New Emerging Dichotomy of Freedom and Reach

A few months ago, Chris Saad penned an article on the dynamics of bundling, and how they’re affecting a number of fields. In his piece, Saad addressed how concepts of bundling are impacting areas of creativity like art and music, among others. Ironically, it had a similar air to Joshua Topolsky’s earlier article on media companies, which itself prompted my response on music-startup realities.

Such examples were only briefly mentioned, but one can go deeper on them, particularly in the way of music. Things are happening now to the age-old structure of music that arguably haven’t changed for the better part of five or six decades. And even that is only the tip of the iceberg.

Part of what was so intriguing about Saad’s examination of these morphing areas is just how much change is going on which is not being discussed. In many ways, Saad’s piece shines a light not only on the changing bundling and unbundling dynamics taking place in music, but how these two different forms—yin and yang—are interacting with one another to shape a new musical landscape. What we see is an emerging dichotomy of freedom and reach that we haven’t seen in quite a while.

Three Trends in a Specific Order

Within the context of music, three trends—unbundling, bundling, and unbundling again—matter. And they matter in that sequence. This is so because each (un)bundling action touches a different area of the music arena, and thus their interaction together forms a new paradigm.

They lay out as follows:

unbundled

Covered in Part I, Reformatting the Barriers

  1. Choice
  2. Format

BUNDLED

Covered in Part II, Shifting the Paradigm

  1. Bundled in the Wrong Way
  2. Power and Paradigm Shift
  3. Sexy vs. Unsexy

unbundled

Covered in Part III, Democratizing the Future

  1. Power, Gatekeeping, Scarcity, and Democratization
  2. Ownership
  3. Money and Community
  4. The Expansive Powers of Identity

The music industry, like all other forms of media, is undergoing such a massive tectonic shift that we’re only beginning to now see how big the fissures are. The most interesting thing will be how these changing power paradigms affect the music coming out, and the communities which are built around the material.

Stay tuned!


Find me on Twitter @adammarx13 and let’s talk music, tech, and business!

100 Awesome Independent Album and EP Releases You Probably Missed in 2016

It’s that time of the year again — when all those “Best of…” lists come out telling us the supposed cream-of-the-crop releases in music. And as happens every year, they skate right over the slew of amazing independent releases that dropped into our lives.

Last year, I drew up a list of 100 independent albums you probably missed in 2015. Now it’s time to do the same for 2016.

In the interest of fairness, it’s important to note that most of these releases simply follow my personal taste in music genre-wise; they certainly don’t encompass all the amazing independent albums that came out this year in jazz, EDM, rap, classical, or other styles.

As with last year’s list, these 100 albums and EP’s come from artists all over the world. This year’s list has artists from: Canada, the U.K., France, Italy, Ireland, Spain, Portugal, China, Denmark, Iceland, Sweden, Norway, Belarus, Germany, Israel, China, Mexico, the Philippines, Australia, New Zealand, and from 20 different U.S. states. That’s how big the independent universe is, regardless of genre.

So here are just 100 of the albums and EP’s that you probably missed in 2016. All were released during the 2016 calendar year, so this gives you an idea of just how small a window into the music world the mainstream actually cuts. As always, albums are in no particular order. Do yourself a favor and go expand your universe. You’d be shocked at what you discover.

  1. Forget About ItIt’s Butter – Los Angeles, California, USAa1993529676_16
  2. I Talk to StrangersI Talk to Strangers – London, England, UKa0865780043_16-1
  3. The Centauri Conspiracies: Part 1 — The AwakeningSunshine & Bullets — Tampa, Florida, USA
    Print
  4. Colours Chelsea Shag — Atlanta, Georgia, USA600x600bb
  5. Good DaysSkyline — Austin, Texas, USAa0007603069_10
  6. Muster PointJeeps — London, England, UKa3598822201_16
  7. ScarsForever Still — Copenhagen, Denmark12
  8. Body WarsJune Divided — Philadelphia, Pennsylvania, USAjune-divided-body-wars-ep
  9. Silent ElephantSilent Elephant — Lille, Francea2226111291_16
  10. The Parts We SaveHeel — London, England, UK
    heel-the-parts-we-save-album-cover-artwork
  11. Breaking FreeA Truth Divides — Fall River, Massachusetts, USAa1106324655_10
  12. EmergenceHour 24 — Temperance, Michigan, USA4a92d0_efe37ce2146445358c6a8af10e5ef140.png
  13. Hardly Loaded EPPhantomHead — Lynchburg, Virginia, USAa2643529918_16-1
  14. Tough LoveBloody Diamonds — Toronto, Ontario, Canada13308599_990879211032274_8926664851863017403_o
  15. A Moment of SilenceThe Funeral Portrait — Atlanta, Georgia, USA14563572_1125466497544768_7992703852251309118_n
  16. EpicentreBouquet of Dead Crows — London, England, UKa0429878601_10
  17. She SpeaksShe Speaks — Kildare, Irelanda2252113179_16
  18. WandererRed Handed Denial — Toronto, Ontario, Canada12799213_10153426011084071_1317740590743645433_n
  19. Dark NarrowsLights That Change — Flintshire, Wales, UKa2142808787_16
  20. The ReIntroductionAlmost Kings — Atlanta, Georgia, USA0006541155_10
  21. BlackSuan — Athy, Irelanda0731599391_16
  22. Mean SomethingKinder Than Wolves — Orlando, Florida, USAa3400336724_16
  23. For Your ObliterationThe Dead Deads — Nashville, Tennessee, USAa0316039504_10
  24. No Mirror / Baby StepsBirdeatsbaby — Brighton, England, UKa2859507464_16
  25. Screech BatsScreech Bats — London, England, UK12764898_977824338969132_6112466179685560664_o
  26. Five KitesFive Kites — Uckfield, England, UKa3539413199_16
  27. Pow WowRed Apple — Madrid, Spaina0626135829_16
  28. HoopdriverHoopdriver — London, England, UKa1149210371_16
  29. The Mud Lords EPThe Mud Lords — San Francisco, California, USAa2762874709_16
  30. StonesCherry Water — Wilmington, North Carolina, USAa2364345222_16
  31. Please Welcome Imperial JadeImperial Jade — Barcelona, Spaina4135821107_16
  32. From The CaveFrom The Cave — London, England, UKa0846461208_16
  33. Imminent for Your InterestsPeople Like Us. — Los Angeles, California, USAAlbum Art rough
  34. Otra Vez ISidewatcher — Detroit, Michigan, USAa0310545470_16
  35. EraserheadEraserhead — Aurora, Illinois, USAa0142508800_16
  36. AlterhoodAlterhood — Tel-Aviv, Israela3217298871_16
  37. Eugenia EPDarla and the Blonde — London, England, UKa2573911246_16
  38. Cosmophonie EPCosmophone — Trois-Rivières, Quebec, Canadaa1977159592_16
  39. Hit the AirBasic Land — Monterrey, Mexicoa2682732415_16
  40. Born to DancePürple — Brighton, England, UKa2572290725_16
  41. Double A-SideThe Mis-Made — Sydney, Australiaa0839401698_16
  42. Refuse to Shine EPMr.Mountain — Portsmouth, England, UKa1375774276_16
  43. Gaining PerspectiveGlory Days — Brisbane, Australiaa3697331310_16
  44. The Sky, the Lie, and Who We Are Before We Die — True North — Los Angeles, California, USAa1878484356_10
  45. Luxury EPPatio — New York City, New York, USAa1711486514_16
  46. PhantasmagoriaWhite Claudia — Chicago, Illinois, USAa0392641707_16
  47. Cruise DealMirror Travel — Austin, Texas, USAa0016514373_16
  48. Call Me by NameGood Fiction — Albany, New York, USAa1006386476_16-1.jpg
  49. BipolarKreepy Krush — Minsk, Belarusa3570746258_16
  50. Good HangsLauren Patti — New Jersey, USAa3026102687_16
  51. Copper CrownCopper Crown — Toronto, Ontario, Canadaa0415375489_16
  52. Cuatro —  Tranparentes — Alicante, Spaina0741328815_16
  53. It’s Too Bright InsideLush Vibes — Vallejo, California, USAa1998902662_16
  54. Ropes EndRopes End — New York City, New York, USAa3134658973_16
  55. Only RosesCarissa Johnson — Boston, Massachusetts, USAa2929911764_16
  56. Theories of the UniverseHaunted Ghost Town — Sunnyvale, California, USAa2755326863_16
  57. Soft Grudge — Mulligrub — Winnipeg, Manitoba, CanadaMulligrub-Soft-Grudge--640x640
  58. Dirty LyxxDirty Lyxx — Boston, Massachusetts, USAa2040502891_16
  59. StagesKopacetic — Shreveport, Louisiana, USAa2728269849_16
  60. Much Love — Microwave — Atlanta, Georgia, USAa1730261151_10
  61. MetadonnaMetadonna — Valencia, Spaina0150878033_16
  62. Break Down the WallsBreak Down the Walls — Hawthorne, New York, USAa1176554633_16
  63. Stuff EPMy Cruel Goro — Icelanda2414949285_16
  64. ShadowboxVivienne the Witch — Perugia, Italya3238750359_16
  65. In the Arms of the SunVox Vocis — Phoenix, Arizona, USAa2512338494_16
  66. DiscourseSex With Strangers — Vancouver, British Columbia, Canadaa2127562643_16
  67. Sleep Tight, When You Wake Up We’ll Be GoneThe Few. — St. Louis, Missouri, USAa2511948533_16
  68. Harmony and DisconnectRising Down — Tampa, Florida, USAa2963571272_16
  69. VectorsYeah Sure Whatever — Marin, California, USAa1649515922_16
  70. DEVILTRAINDEVILTRAIN — Bamberg, Germanya1542791299_16
  71. Buried in the SoundLost Frontiers — Pomona, California, USAa3721344826_16
  72. Nosebleed WeekendThe Coathangers — Atlanta, Georgia, USAThe-Coathangers-Nosebleed-Weekend
  73. The Eternal SeaThe Eternal Sea — Tauranga, New Zealanda2466588262_16
  74. Traces EPTraces — Phoenix, Arizona, USAa2543588091_16
  75. Elevation —  We Are The Catalyst — Gothenburg, Swedena2368062794_16
  76. MABON SONGSCrypt Trip — San Marcos, Texas, USAa0313274180_16
  77. Angel — Heroes — Los Angeles, California, USAa4173242852_16
  78. Swan Valley Heights — Swan Valley Heights — Munich, Germanya0676605006_16
  79. Abandoned — Counter Theory — Valparaiso, Indiana, USAa0689683623_16
  80. AntsAnts — Rivergaro, Italya1366200431_16
  81. The Journey (EP)Rusty Joe — Casais, Portugala3938316616_16
  82. SpectraMyrrias — Philadelphia, Pennsylvania, USAa1053203725_16
  83. Dimensionauts EPRobot Jurassic — Edgewater, Maryland, USAa1323032774_16
  84. BelieverWeird Neighbours — Sarnia, Ontario, Canadaa0850762461_16
  85. Hell Is Not Other People, It’s YouThe Republic of Trees — Scarborough, England, UKa3751139773_16
  86. The LippiesThe Lippies — Grand Rapids, Michigan, USAa0852829300_16
  87. Far Away, As We Fade —  AggronympH — Yichang, Chinaa3169651902_16
  88. The DepartedSummer Drive Home — Weymouth, England, UKa0290939636_16
  89. Mix TapeThe Hang Lows — Pittsburgh, Pennsylvania, USAa0584312114_16
  90. SweetMeatThe BlackLava — Torino, Italya3220774202_16
  91. Singularity — Fight Like Sin — Lafayette, Indiana, USAa3594774885_16
  92. Chasing a PhantomChanging Scene — Bel Aton, Maryland, USAa1533314418_16
  93. Abandoned HomesThe Aesthetic — Seattle, Washington, USAa1922360043_16-1
  94. ConnectorFable Circuit — Shepherdstown, West Virginia, USAa3669455937_16
  95. InburnInburn — Illigan City, Phillipinesa2748366475_16
  96. The Lost Ones (EP)LUNGS — Sacramento, California, USAa2346140061_16
  97. AmbulanceThe Amazing — Stockholm, Swedena0811660077_16
  98. DetoxPyke — Arendal, Norwaya4237766781_16
  99. Start AgainThe Middle Ground — Milwaukee, Wisconsin, USAa3612480243_16
  100. Valley Queen EPValley Queen — Los Angeles, California, USAa2154869007_16

    If you enjoyed this please share, and feel free to Tweet me. Let’s talk music and tech!

    Or follow me on that new Snapchat thing! 😎 🤘

    CdhrnNSXEAEa2t1

Playlists Will Not Save Your Music Business

My media business will not be saved by video, bots, newsletters, or Slack integration. That’s what Joshua Topolsky told me yesterday. And he’s right.

A still from High Fidelity (2000); Captures the sentiments pretty will I think

A still from High Fidelity (2000); Captures the sentiments pretty well I think

The New Thing that so often arrives just in time as the savior of the whole machine is many times bullshit. It’s a desired escape from an already challenging (dire?) situation that is causing headaches upon ulcers upon headaches. That’s why it seems so magical in the first place; it seems to appear out of nowhere like some miracle from a higher power. You prayed to the media gods for deliverance, and so they delivered unto you newsletters, bots, and Slack.

But Topolsky is right about the misleading nature of these new things: they have the potential to help, but none has the power to deliver us, to part the seas of stubbornness and ego.

While it appears to me that he sought to write about media in general, Topolsky could easily have been talking about any of the media industries in particular. Music, for example, fits right into his sardonic diatribe in a way that must chafe for the megalithic powers who used to control the industry. In music, it goes: yay for playlists, analytics, offline access, curation, and exclusives—build those in, and then we’ll be saved. No, these won’t save your (music) media business. And that’s painful for a lot of people.

More and more, the posts on changing media dynamics which garner shit-tons of feedback are the ones that are the truest. They are radically brilliant—radically poetic in a way—because of their sheer shunning of “conventional wisdom.” Such is more or less an oxymoron nowadays anyway.

I saw an earlier example of this back in November with Chris Dixon’s post on independent gaming, and was similarly moved to write my response on independent music, something he was also referring to (knowingly or not). Now with Topolsky doubling down on a similar idea, it’s becoming an even starker point.

“Because that [former media] system was built on the concept of scarcity and locality—the limits of what was physically possible—it was very easy to keep the gates and fill the coffers.”

And here we come to the prickly point that so many music businesses have trouble with now: scarcity is obsolete; democratization wins. I underscored this in my Dixon-response piece, but now it seems all the more palpable. What used to serve as a power play by music companies—the scarcity squeeze by the major label—has lost most of its bite, if not its bark as well. Maybe it’ll work if we call it “windowing” and stagger the release on multiple services! Nope, we all know that you simply changed the name of what you were doing instead of trying to actually change the action. And it’ll end up free somewhere anyway. Live with reality.

Wait, I’ve got it! We’ll tell people that we have the best playlist-making feature around! Great, so does everyone else. And, by the way, the people who really matter for your music business don’t care. The general consumer/listener might care (and I stress might), but the artists who actually produce the content you rely on for your lifeblood won’t give a shit. Why? Because it ultimately does little for them.

Ah, then we will give them the deepest, best set of analytics they can have! Awesome, so will everyone else. You can join the swaths of sites telling them they have a couple thousand streams, have made essentially no money, and then tell them they owe you $4.99/month for that wonderful data. The reality that you don’t want to hear is that the vastly growing demographic of artists—independents—are smart enough to know this already, and all you’re really doing is giving them numbers with no context. You’re giving them the numbers, the locations, the graphs— but with no real way to actually affect change in those numbers.

Offline access and exclusives then! Right! Except not, because exclusivity doesn’t help these artists long-term, it only helps you in the short term. It’s why artists immediately understand the opportunities before them now while other people struggle to see the big picture. Because they have long-term vision, and patience. Because exclusives are not where the long-term strategy is, either for the artists, or the music business.

It’s in the community cultivation and the relationship bridging. Social and messaging then! No, stop, that won’t be an easy save either. The reality that so few people want to hear is that community cultivation is a long-term process. It’s about knowing things about your content producers—in this case the artists you work with—that your competition doesn’t bother taking time to find out. Don’t ask me how many registered users I had yesterday. Ask me how many conversations I had yesterday with ten artists in seven different countries with fanbases numbering in the tens of thousands. Ask me what comes out of that. And then remember that was only ten artists.

Over the last few years, we were asked who we thought would win the streaming wars, because streaming is obviously the future of music. Except that’s too simple a magic potion because it’s going to take a lot more than that to reach the new horizon. It’s not about fixing the faulty component in the engine. They’re all faulty, and have been for near 40 years.

You have to rebuild the engine completely. Bottom up. You need to construct a music company that does everything that will change the reality for a new artist; after all, there are so many more of them than anything else. And they never stop creating and producing. You need to take your time to do all the sexy things—the playlist functionality, the radio, the streaming, downloading, profiles, social, live—and all the un-sexy things you never thought about—the legal stuff, the business stuff (more than just analytics!), the financial, and the marketing. Fixing the broken paradigm is a losing proposition; building a whole new one is (ironically) cheaper, better, and much, much more powerful long-term. That’s the strategy I’m committed to.

Topolsky was dead-on:

We’ll have to learn a thousand hard lessons, most of them centered around the idea that if you want to make something really great, you can’t think about making is great for everyone. You have to make it great for someone. A lot of people, but not every person.

And that’s what’s missing from the music-business discussion right now. The “everyone” that most streaming services are targeting is already saturated with competition, high prices, and a lot of bad press (from artists and artist agencies like ASCAP and BMI). The “someone” that Topolsky refers to, though, is the independent demographic, clear as day. They’re underserved, undervalued, dismissed, marginalized, pissed off, and not tied to any major label contracts—just right to woo and capture with something as easy as a conversation and explanation of a better future.

I’m as shamelessly self-promotional as Topolsky admits he is because these are the people I love. I know they see what I see, and they’ll wait around as long as it takes to make it work. Because they’re not jaded or angry—they’re just waiting.

Waiting for something better to come along for them.

***

Find me on Twitter @adammarx13 and let’s talk music, tech, and business!

Why Ignoring the Independents Means Thunderstorms for SoundCloud

SoundCloud logo

TechCrunch published a post recently, the premise of which was SoundCloud’s recent tapdance with major labels. The post discussed SoundCloud’s $35M in debt funding, and newly signed deal with Universal Music Group. The fact that the aforementioned funding was actually finalized last May notwithstanding, the piece concluded that the upshot of the whole situation is that SC would end up being worth more than rival Spotify. Here’s why that’s not exactly the case.

The Background: Courting the Mainstream Players

While the TC piece makes some astute points, its most important argument—that SoundCloud has the opportunity to become the YouTube of audio—doesn’t exactly stand on its own. SoundCloud has a major issue in that it’s caught in between two completely different paradigms—that of the independent and that of the major label—and doesn’t seem to know how to resolve those differences. Up until now, the ill-fated balancing act it’s been trying has been somewhat workable, but going forward it will be tenuous at best. As such, the real story here is how SoundCloud is evolving, and not in a way that is wonderful for the independent artists who have historically been its core constituency.

As SoundCloud moves further into the major label fold, it simultaneously does two things:

1) It resolves (at least for the moment) the issues which the music service is having with some of the labels over licensing and royalties. The new deal with Universal clearly comes with it an agreement that the label will drop any pending legal action against the service, as music will now be licensed directly to SC. (It does, however, do nothing for the mass of pending litigation  between Sony and SoundCloud, as the former is that last major label holdout to strike a deal with the service).

2) It effectively continues the alienation of the independents upon which the service has historically built its core and more loyal following.

Leaving the Core Content Base

To be clear, there’s nothing wrong with serving the mainstream. However, most every one of the major music companies already does that, leading to an already crowded crawlspace of competitors vying for mainstream supremacy. While the major music companies set their collective focus on mainstream material, the independent demographic is left languishing in the wind time after time. Initially, SoundCloud was an exception in this respect, cutting its teeth in the independent arena long before it signed deals with any of the major labels (starting with Warner Music Group last year). Since then, however, SC has been moving further and further away from the paradigm from whence it rose and closer towards the crowded party at the mainstream table.     

Screen Shot 2015-11-16 at 1.26.18 PM

The music pipeline

While SC battled other services for mainstream consumers, it had for a while been the favorite among independents and underground artists looking to cultivate their fanbases from the ground up. Even Alex Moazed in his guest TC piece acknowledged that this is what makes SC win: the fact that this is where the content stream starts for a lot of new artists (a rapidly growing demographic) and where they begin to build their initial fanbases and cultivate their followings. That SoundCloud is not only moving away from that, but seemingly shunning it in the long run, is a palpable kick in the face for a lot of independents.    

VMmRj35

Growth of independent music between 2003-2012; image courtesy of Techdirt

What Moazed doesn’t address in his piece is exactly what I discussed last spring: why independent artists should essentially kiss SoundCloud goodbye, why their subsequent deal with the NMPA was irrelevant for independents, and ultimately why the precarious high-wire balancing act was leading them down a difficult path. Independent artists, unlike major label performers, are not locked into any required loyalty as a result of record label contracts. They can come and go as they please on any variety of services, and thus are free to explore any new ( and better) opportunities that might arise.

SoundCloud’s error in judgement here is assuming that the independent demographic (arguably its only real unique demographic of content producers) will stick around when the winds change, and the focus of the platform shifts to mainstream desires. Already there were grumblings in the independent underground when SC premiered its new layout early last year. The simple reality is that SoundCloud fundamentally cannot serve two masters (the independents and the major labels) because each is moving in an opposite direction, with desires and mentalities divergent of one another. Now, with the Universal deal, I see only one way SC can continue to struggle towards profitability, and that is in the major label direction.

That, however, presents another can of worms.

Money and Equity

As some have already pointed out (or could simply guess), the Universal deal could not have been cheap by any means, particularly as it meant Universal dropping its legal action against the music service. Furthermore, as Warner gained around a 5% stake of the company when it licensed its own catalogue, one can calculate that Universal settled for nothing less than a similar deal (likely pushing for more equity in order to drop the legal suit).

That’s a huge premium to pay for Universal’s recording and publishing catalogues, and doesn’t yet take into account all the royalties SC will now have to cough up on the backend. The real hard hitting numbers come when one imagines what Sony, the last major holdout, will demand for its material. Seeing as it currently has legal qualms with SoundCloud, it’s conceivable that Sony could demand even more cash upfront and equity in order for access to its musical coffers. At a minimum, one could calculate the collective equity of the major labels to total somewhere around 15%—at a minimum.

Though not listed specifically, the chart below gives one a good idea of where SoundCloud will inevitably fit within the royalty paradigm, and just how much friction it will cause between both the service and artists, and the service and the labels. Two different (divergent) interests make for a massive headache in the long term for SoundCloud.

1276-music-streaming-services-compared_Sep152

Royalty rates, minimum wage, and reality; image courtesy of informationisbeautiful.net

This may seem like a paltry price of doing business until one considers the fact that the relationship dynamic is not an equal one: the major labels hold the keys to the material which SoundCloud wants (and desperately needs, in order to win the mainstream game), but are not equally in need of SoundCloud itself. They similarly license the same material to a variety of competing music services, and essentially can dole it out to the highest bidder, through contracts which then become renegotiable every few years. Thus, SoundCloud (and others) are beholden to the major labels for their lifeblood, but the opposite is not true. SoundCloud has entered into a paradigm that’s nearly impossible to backtrack from. They’re tying their own concrete shoes.

Operating in the Red

All of this firmly underscores the uncomfortable news recently that SoundCloud took a $44M hit in 2014, making their raise of the above-mentioned $35M almost irrelevant. That the raise of the $35M in debt financing will essentially have to go to cover SC’s 2014 losses must be a bitter pill for investors to swallow, particularly as much of their customer base uses the service for free. The simple truth, as it appears to be, is that SoundCloud is hemorrhaging money with no clear path to take to fix things, either quickly, or in the long term. That being the case, it’s fairly probable that SoundCloud will need to start raising another round of money somewhat soon, even if it’s just to weather its current storm.

Screenshot-2016-02-09-at-23.05.39

SoundCloud losses (in Euros); image courtesy of Music Business Worldwide

And then there’s this, the Reddit thread that must be the most painful thing for SC right now. Titled “SoundCloud could close after $44m losses,” the thread spent a few nights recently blowing up, and had an upvote-percentage of 96%. What does this mean in reality? It means a lot of people were reading this conversation, and the commenters are not wrong. In fact, many of them are quite astute and know exactly what’s going to happen:

Screen Shot 2016-02-12 at 2.36.30 PM

Screen Shot 2016-02-12 at 2.38.39 PM

These comments highlight the discussion going on regarding SoundCloud not only among its general consumers, but among the artists who create the content on which the service was built. It’s important to remember that before SC had any major label deals in place, it was doing quite well because of the huge influx of independent material coming in from independent artists and DJ’s. In moving further and further away from this core demographic, SoundCloud is quite aggressively biting the hand that feeds it. SoundCloud’s response to the Reddit thread was equally underwhelming and unpersuasive.

The loyalty of such independent artists is a complex thing; on the one hand, they aren’t tied to any one particular party, and thus their loyalty to any one service may be thought of as ephemeral. On the other hand, however, their loyalty has the potential to be ferocious and dogged if and when they find a service which works for them, in their favor. SoundCloud used to be that service, but it isn’t any longer. They’ve traded the long term loyalty of these smaller—but much more numerous—independent artists for the short term benefit of being able to peddle major label mainstream material. The same exact mainstream material which all their major competitors are already selling. They’ve traded the long term benefit of being unique for the short term “benefit” of being just like everyone else.

Short Term Gain, Long Term Loss

The big kicker though, is that SoundCloud didn’t start as Spotify of Apple Music did, with deals with the major labels. It doesn’t come from that part of town. It comes from the less expensive, more experimental street of independent artists, covers, and remixes. It blew up among independents long before mainstream listeners got wind of it, and now it’s moving away from those early adopters towards a more corporate clientele.

As far as I can see it, this is incredibly ironic: the independent music universe is just now starting to mature and expand rapidly, while the major label world is getting cramped and hideously expensive. Over the last decade, independent music has grown immensely while major label-signed content has actually decreased. Put simply, the number of expensive, mainstream artists which big music companies are fighting over is shrinking while the number of free and/or inexpensive independent artists is actually growing at an almost exponential rate. Insofar as the independent universe might not be as lucrative as the mainstream arena in the short term, it nonetheless is where the most growth is happening.

So where does all of this leave SoundCloud? In the short term, the Universal deal is a great breakthrough, and certainly will help them more aptly compete with Spotify and Apple. However, it’s clearly been overshadowed over the last few weeks by their financial woes and discussions of possible paths forward.

In the long term, though, they will end up dismissing the demographic and core base that made them special to begin with. Someone else will pick up that gauntlet and run with it, and that’s where the growing independent base will go.