Category Archives: Music Industry

100 Awesome Independent Album and EP Releases You Probably Missed in 2019

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Welcome to the FIFTH annual list of independent albums and EP’s that probably slipped under your radar this year. I’ve been in the music industry for over a decade at this point (I know right?!) and it continues to floor me just how much talent is out there.

Yet here we are again, with even more incredible music for you to sink your teeth into. One of the truest things that keeps me creating these lists year after year is the excitement I derive from the serendipitous discovery of these wide swaths of creativity. Sometimes the best artistry emerges from the best-kept secrets.  🤘🎸

Since 2015, I’ve given you lists of 100 independent albums and EP’s you probably missed during the year. Here they are:

And so, here is the 2019 list in all its glory. I’m equally excited for the new crop of artists here as well as for those returning again. A healthy helping of the content on this year’s list is from artists I’ve known for years and who continue to crank out new material. It’s all balanced by an influx of new content from new artists whom I’ll certainly be keeping tabs on into the new year.

As with all previous lists, these 100 albums and EP’s come from artists all over the world. This year’s list includes artists from: Canada, Greece, Germany, Spain, Austria, Hungary, France, almost ALL of Scandinavia (Sweden, Norway, Denmark, and Finland!), Australia, Estonia, Argentina, Mexico, the Philippines, New Zeland, Indonesia, Switzerland, Italy, Russia, Bulgaria, the U.K., Poland, and 21 different U.S. states. The independent world is massive.

It’s always interesting to see what each year brings in terms of style and genre, and this year’s list seems to heavily feature classic garage punk, pop-punk, shoegaze, alternative, metal, folk rock, and hard rock material.

With all that out of the way, here are 100 of the independent albums and EP’s that you probably missed in 2019. All were released during the 2019 calendar year.

As always, albums are in no particular order.

Remember, if you dig this and want to see more, follow me on Twitter @adammarx13 and let’s talk music, tech, and startups!

Come take a peek under the radar at the material you probably missed this year—live in my music world for a little while. 😎👍

 

1. What Happened To Us? (Vol. 1) — The Head — Atlanta, Georgia, USA

What Happened to Us

2. Breathe In Colours — Forever Still — Copenhagen, Denmark

Breathe in Colours

3. Ghost — Bloody Diamonds — Toronto, Ontario, Canada

Ghost

4. I’m The Reaper — The Beautiful Monument — Melbourne, Australia

I'm The Reaper

5. Gone Off the Earth — Felic — Helsinki, Finland

Gone Off the Earth

6. Far Canal — Fox Ache — Brisbane, Australia

Far Canal

7. Ephemeral — We Are The Catalyst — Gothenburg, Sweden

Ephemeral

8. Hannah Wicklund & The Steppin Stones on Audiotree Live — Hannah Wicklund & The Steppin Stones — Los Angeles, California, USA

Hannah Wicklund Live

9.  Retrospective | Reactive — Have No Clue — Esztergom, Hungary

Retrospective, Reactive

10. Mourning Vibes II — DownStater — Quebec City, Quebec, Canada

Mourning Vibes II

11. When Daughters & Sons Revolt — Past Tense Of Never — Graham, North Carolina, USA

When Daughters

12. Show Me Your Teeth — Beth Blade and the Beautiful Disasters — Cardiff, Wales, UK

Show Me Yourth Teeth

13. The Extinction of Unicorns — The Dead Love — Sydney, Australia

The Extinction of Unicorns

14. The Wood Room Sessions — Just Like Honey — New York, New York, USA

The Wood Room Sessions

15. Useless Hands — Rival Town — St. Catharines, Ontario, Canada

Useless Hands

16. Not So Bold — Dance Contraption — Grand Rapids, Michigan, USA

Not So Bold

17. Main Street Revival — Main Street Revival — Ottawa, Ontario, Canada

Main Street Revival

18. Crowned In Frost — Frozen Crown — Milan, Italy

Crowned In Frost

19. Come What May — Oh See Demons — Bergen, Norway

Come What May

20. How Your Life’s Played Out — Montgomery — Toronto, Ontario, Canada

Howw Your Life's

21. Alone in the Dark — In Good Nature — Boston, Massachusetts, USA

Alone in the Dark

22. Brand New World — Desert Queen — Tartu, Estonia

Brand New World

23. Asleep in the Deep End — Andross — Philadelphia, Pennsylvania, USA

Asleep In The Deep End

24. It Was Beautiful — Fawner — Bristol, England, UK

It Was Beautiful

25. Traya — Set Fire — Boston, Massachusetts, USA

Traya

26. Notti di Follia — Out For Summer — Moderna, Italy

Notti di Follia

27. Slice — Spo — Salt Lake City, Utah, USA

Slice

28. Feeding The Void — Hysteria — Dresden, Germany

Feeding the Void

29. Here & Now (EP) — Dangerfield — Brisbane, Australia

Here and Now EP

30. Celebration — CityState — Holyoke, Massachusetts, USA

Celebration

31. Dream Living — Lost Mind — Torrelodones, Spain

Dream Living

32. So It Began — Silvernite — Greece

So It Began

33. Bridges We Build | Bridges We Burn — Teresa Banks — Helsinki, Finland

Bridges We Build, Bridges We Burn

34. Serenity — Saint Raven — Salt Lake City, Utah, USA

Serenity

35. Two Sides — Dirty Rugs — Seattle, Washington, USA

Two Sides

36. ATERA — Zea Mays — Bilbao, Spain

Atera

37. LP1 — Clouds & Satellites — Savannah, Georgia, USA

LP1

38. Three on Three EP — Jack Droppers & the Best Intentions — Grand Rapids, Michigan, USA

Three on Three EP

39. CRAFTING EP — CRAFTING — Wilmington, Delaware, USA

Crafting EP

40. The World Conspires — Birdeatsbaby — Brighton, England, UK

The World Conspires

41. Transcend — Hello, Mountain — Denver, Colorado, USA

Transcend

42. Spiral Down — Blue Velvet Drapes — Los Angeles, California, USA

Spiral Down

43. Redeemer — Red Handed Denial — Toronto, Ontario, Canada

Redeemer

44. Maladjusted — My Secret Haven — Warsaw, Poland

Maladjusted

45. Glitter Trails — Glitter Trails — Los Angeles, California, USA

Glitter Trails

46. Memorias — Carla Monterrubio — Mexico City, Mexico

Memorias

47. The Toll — DUSK — Vienna, Austria

The Toll

48. Manic EP — Lie to Life — Detroit, Michigan, USA

Manic EP

49. Genetic Nobodies — Genetic Nobodies — Los Angeles, California, USA

Genetic Nobodies

50. Skull Flower — John Tessier — Paris, France

Skull Flower

51. Unbreakable — Keep Flying — New Jersey, USA

Unbreakable

52. Scream In My Dream — Strangers In The Attic — Zurich, Switzerland

Scream in My Dream

53. Stories in Time — Time Jugglers — Sofia, Bulgaria

Stories in Time

54. A New Dawn — AltHero — Santa Cruz De Tenerife, Spain

A New Dawn

55. On A Flow — Breitenbach — Frankfurt, Germany

On a Flow

56. L’hameçon — ATHECIO — Lyon, France

L'hamecon

57. Dusky Wing — Dusky Wing — Los Angeles, California, USA

Dusky Wing

58. PALIMONY EP — PALIMONY — Gainesville, Florida, USA

Palimony EP

59. On Fences — Between Bodies — Berlin, Germany

On Fences

60. Dormancy — Playing Pretend — Philadelphia, Pennsylvania, USA

Dormancy

61. Woodland Rites — Green Lung — London, England, UK

Woodland Rites

62. Peachy Keen EP — Golden Cinema — Charlottetown, Prince Edward Island, Canada

Peachy Keen EP

63. Thunderjoy — West Valley Shakers — Sheridan, Oregon, USA

Thunderjoy

64. Queen of the Pill — The Jackets — Bern, Switzerland

Queen of the Pill

65. After Dark — Pale Lips — Montreal, Quebec, Canada

After Dark

66. Erebus — Returned To The Earth — Nuneaton, England, UK

Erebus

67. Schizophrenia — Altersight — Saint Petersburg, Russia

Schizophrenia

68. IV — OMAHA — Toronto, Ontario, Canada

IV

69. Egress — TopLady  — Tulsa, Oklahoma, USA

Egress

70. Blind by Midnight — Dino Bravo — Burlington, Vermont, USA

Blind by Midnight

71. Cool Evil — Glued — St. Louis, Missouri, USA

Cool Evil

72. Stressor — Wine Lips — Toronto, Ontario, Canada

Stressor

73. Here It Is — Fragile Canyons — Minneapolis, Minnesota, USA

Here It Is

74. Feels Like Forever — Pretty Bird — Indianapolis, Indiana, USA

Feels Like Forever

75. Larmes Confettis — Cosmophone — Trois-Rivières, Quebec, Canada

Larmes confettis

76. UNO — Black Betty — Villa Maria, Argentina

UNO

77. The Ghostwriter — The Ghostwriter — Detroit, Michigan, USA

The Ghostwriter

78. Pen Name — Pen Name — Canterbury, England, UK

Pen Name

79. Hoping, Not Hopeful — Low Vault — Baltimore, Maryland, USA

Hoping, Not Hopeful

80. Planet Hunter — Planet Hunter — Wellington, New Zealand

Planet Hunter

81. Butterfly Distortion — Dive to Blue — Buenos Aires, Argentina

Butterfly Distortion

82. Take Her My Life — Castle Black — Brooklyn, New York, USA

Take Her My Life

83. Starburst – EP — Truett & The Traitors — Springfield, Missouri, USA

Starburts EP

84. Go — MoND — Bandung, Indonesia

Go

85. A War Within — Enmy — Cincinnati, Ohio, USA

A War Within

86. The Devil You Know — The Coathangers — Atlanta, Georgia, USA

The Devil You Know

87. Manic Mood — Easy Jane — Beirut, Lebanon

Manic Mood

88. Demonstration — Floral Canyon — Phoenix, Arizona, USA

Demonstration

89. Exhale — The Sleep Department — Brooklyn, New York, USA

Exhale

90. ep — Soft Topics — Minneapolis, Minnesota, USA

ep

91. SPLASH – EP — Service Delay — Toronto, Ontario, Canada

Splash EP

92. Welcome to the Block — Stonewall BLVD — Denver, Colorado, USA

Welcome to the Block

93. The New Joys E.P. — The New Joys — Brooklyn, New York, USA

The New Joys EP

94. Superfuzz — Superfuzz — A Coruña, Spain

Superfuzz

95. Overnight — Insomnia — Milan, Italy

Overnight

96. EP 2019 — Dischord — Aix En Provence, France

EP 2019

97. Young & Dumb — All In Due Time — New York, New York, USA

Young and Dumb

98. Indeed EP — Indeed — Budapest, Hungary

Indeed ep

99. Mural — Mural — Cebu, The Philippines

Mural

100. No Missed Calls, No New Messages — The Ragetones — Pueblo, Colorado, USA

No Missed Calls

***

If you enjoyed this list please share and give these artists some love!

100 Awesome Independent Album and EP Releases You Probably Missed in 2018

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Another December just about passed, and another 100 independent albums and EP’s you probably missed this year. In any artistic industry, so much of the exciting content flies quietly under the radar, except for when you know where to look for it. 🤘🎸

Since 2015, I’ve given you lists of 100 independent albums and EP’s you probably missed during the year. Here they are:

Now here comes 2018’s. I’m so stoked for the new crop of artists here, as well as for those returning again. A lot of the content on this year’s list comes from artists I’ve known for years, producing music for new projects they’ve put together recently. This is a different kind of excitement; I love seeing the evolution of these creatives.

As with all previous lists, these 100 albums and EP’s come from artists all over the world. This year’s list includes artists from: Canada, Greece, Germany, South Korea, Belarus, Austria, Singapore, France, South Africa, Sweden, Australia, Norway, Spain, Estonia, Ukraine, Italy, the U.K., Switzerland, Russia, and 22 different U.S. states. The independent world is massive.

It’s always interesting to see what each year brings in terms of style and genre, and 2018 seems to have been heavy on punk, pop-punk, alternative, instrumental, metal, and jazz-influenced material, both in terms of my personal taste and overall releases.

With all that said, here are 100 of the independent albums and EP’s that you probably missed in 2018. All were released during the 2018 calendar year. Music is multidimensional, and all these artists should be treated as such.

As always, albums are in no particular order.

Come expand your universe and live in my world for a little while. 😎👍

1. Satellites — Chelsea Shag — Atlanta, Georgia, USA

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2. Painting with Scissors — Andy Gruhin — Silver Spring, Maryland, USA

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3. Feels — Fair Panic — Wayne, New Jersey, USA

Fair-Panic

4. Overseas — White Coven — Zaragoza, Spain

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5. Hannah Wicklund & The Steppin Stones — Hannah Wicklund & The Steppin Stones — Nashville, Tennessee, USA

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6. Dreamland — Just Like Honey — New York, New York, USA

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7. Personal Issues — Oh See Demons — Bergen, Norway

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8. My Only Hope — Adam Singer — San Francisco, California, USA

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9.  Mind Tricks — Brownstone Inc. — Graz, Austria

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10. Thriving, Given The Consequences — Soviet Ohio — Syracuse, New York, USA

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11. In Moon We Trust — Hālley — Paris, France

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12. What The Wreck? — Stan Stewart — Ithaca, New York, USA

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13. Poor You, Part Two — Jinxbox — Middlebury, Vermont, USA

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14. Centipede – EP — Blooming Fire — Los Angeles, California, USA

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15. The Candleman and the Curtain — The Earth and I — Warwick, New York, USA

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16. Everyone I’ve Ever Loved — Valleyheart — Salem, Massachusetts, USA

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17. Kingdoms — Coopertheband — Nashville, Tennessee, USA

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18. Self Titled — Alias May — Melbourne, Australia

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19. Make My Millennium — Resident One — Atlanta, Georgia, USA

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20. FunnySexyCool — Hollywood Horses — Birmingham, Alabama, USA

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21. .ghostworld – EP — .ghostworld — Singapore, Singapore

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22. Heaven and Her Demons — BlackBeak — Johannesburg, South Africa

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23. Wherever That Is — Panhandler — Stockholm, Sweden

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24. White Roses EP — Dream Chambers — Nashville, Tennessee, USA

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25. Soul Transfer — Emphasis — Tallin, Estonia

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26. Westline Drive EP — Westline Drive — San Francisco, California, USA

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27. EP — Lampion — Montreal, Quebec, Canada

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28. Salvation — The Penske File — Burlington, Ontario, Canada

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29. Hypnotizing Euphoria — The Who Was Phone — Zurich, Switzerland

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30. Bridges – EP — For The Fire — Indianapolis, Indiana, USA

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31. Disposition — Young Animals — St. Louis, Missouri, USA

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32. Glow In The Dark — Rachel Rose Mitchell — Melbourne, Australia

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33. Dear Beer — The Bombpops — Los Angeles, California, USA

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34. Aftermind — HighView — Canberra, Australia

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35. It’s History, It’s Poetry — Detour North — Chicago, Illinois, USA

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36. Voices in My Head — Failing Up — Los Angeles, California, USA

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37. Omega — Shades of Dissonance — Minneapolis, Minnesota, USA

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38. From the Wild Sky — Halie Loren — Eugene, Oregon, USA

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39. Up in Roses — Fever — Portland, Oregon, USA

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40. Passing Years — Looking For Alaska — Regensburg, Germany

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41. Desire Paths — Turnspit — Chicago, Illinois, USA

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42. Absolution EP — Keating — Columbus, Ohio, USA

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43. The Fallen King — Frozen Crown — Milan, Italy

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44. Heartwoken EP — The Revies — Los Angeles, California, USA

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45. Amnesiatic — ODD ROBOT — Fullerton, California, USA

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46. Everything Is Temporary — Between You & Me — Melbourne, Australia

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47. Duoyu — Duoyu — Athens, Greece

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48. Six People in a Dream — Baronaqua — Melbourne, Australia

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49. Hometown Static — Second Street — Kansas City, Missouri, USA

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50. Happy Thoughts — Midfield — Philadelphia, Pennsylvania, USA

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51. Becoming a Ghost — Becoming a Ghost — Troy, New York, USA

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52. Bedtime — Pawn Pawn — Toledo, Ohio, USA

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53. Alliance — We Call The Shots — Phoenix, Arizona, USA

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54. Mother’s Keeper — Mother’s Keeper — Birmingham, Alabama, USA

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55. Is an EP — THIS — Buffalo, New York, USA

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56. Distraction EP — Paper Citizen — Boston, Massachusetts, USA

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57. Nostalgia — deerfield. — Syracuse, New York, USA

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58. Street Talk — Big White — Sydney, Australia

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59. For Me This Time — Analog Heart — Boston, Massachusetts, USA

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60. While We Dream — Lights & Motion — Gothenburg, Sweden

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61. Raw Sugar — L’Absence — Zaragoza, Spain

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62. Tameless — Buffalo Rampage — Moscow, Russia

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63. Never Asked for It EP — Sorry, Scout — St. Louis, Missouri, USA

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64. Old Soul — Sharp Sleeves — Blacksburg, Virginia, USA

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65. Aspire — VENUES — Stuttgart, Germany

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66. From Blue to Bone — Mama Doom — Poughkeepsie, New York, USA

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67. Heart Whispers (EP) — Grace & the Midnight Angel — Clovis, California, USA

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68. Cirque Du Skank — Skunk Funk — American Canyon, California, USA

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69. Spring Silver EP — Spring Silver — Silver Spring, Maryland, USA

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70. The View From Here — Stealing Home — Concord, California, USA

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71. Weird’N’Confused — Appocaloosers — Madrid, Spain

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72. Inception — Wallbangers — Nantes, France

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73. Wanderlust EP — Growling Rabbit — Minsk, Belarus

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74. Paper Saints — Paper Saints — Dallas, Texas, USA

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75. Spinneret EP — JEM — Singapore, Singapore

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76. Cashmore Demos — Cashmore — Brisbane, Australia

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77. Dakota — Go Murphy — Fargo, North Dakota, USA

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78. Categories of Colour — Either/Or — Vancouver, British Columbia, Canada

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79. Facade — Boxford — Virginia Beach, Virginia, USA

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80. Casual Corner — Blesst Chest — Portland, Oregon, USA

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81. Paper Hearts — The Brothers Union — Asbury Park, New Jersey, USA

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82. New Ruins — Candace — Portland, Oregon, USA

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83. Growing Pain — Envious View — Springfield, Missouri, USA

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84. Hangin’ On! — The Glycereens — Brisbane, Australia

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85. Digital EP — Anemoria — Fullerton, California, USA

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86. Agonize — Sever The Ear — Gwangju, South Korea

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87. Laugh It Off! — Domino & the Derelicts — San Jose, California, USA

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88. Glass Bones — WolvesMouth — Voorhees, New Jersey, USA

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89. Ashes — Led By Lanterns — Birmingham, England, UK

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90. A Quiet Riot Vol. 1 — We Are Riot — Bremen, Germany

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91. Membership Dues — Sad Girlz Club — San Francisco, California, USA

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92. Broken Codes — In Parallel — Nashville, Tennessee, USA

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93. The Deep Sleep — Unveil — Sherebrooke, Quebec, Canada

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94. The Nexstone — The Nexstone — Kramatorsk, Ukraine

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95. Comfort Zone — Superhaunted — Miami, Florida, USA

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96. Fault Lines EP — Aeve Ribbons — Manchester, England, UK

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97. Visions EP — Noise Maze — Udine, Italy

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98.The Outer Space (EP) — Fallcie — Saint Petersburg, Russia

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99. Jaren — Jenn’s Apartment — Lansing, Michigan, USA

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100. Nothing Left — My Favorite Fault — Moscow, Russia

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***

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

Three Questions Concerning Spotify’s Direct Listing Decision

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Originally published on Crunchbase News on January 3, 2018.

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As everyone was in holiday mode a few weeks ago in December, Spotify confidentially filed documents with the SEC to go public, likely in Q1 of 2018.

Previously, I discussed Spotify’s numbers and examined how those figures looked before an IPO filing. Now we can see how those numbers look in context.

This filing bolsters prior reports that Spotify would forego a traditional IPO in favor of a direct listing, a method of going public that has left many scratching their heads. For those unfamiliar with it, a direct listing is a way allow a firm’s shares to begin regular trading while avoiding the normal IPO roadshow process.

When asked about the direct listing strategy, IPO expert Barrett Daniels of Nextstep Advisory Services told Crunchbase News that there are a few reasons companies might choose to pursue the strategy. It typically boils down to the fact that the company may not be “strong enough” to transact a traditional IPO due to these reasons:

  1. The company’s growth (or lack thereof).
  2. The company’s size (in terms of revenue).
  3. The general climate of the industry.

So do these reasons provide Spotify grounds to go direct, especially considering how much money could be left on the table? Let’s find out.

1. Company Growth

Spotify has the kind of crazy growth that companies dream of. As its subscriber numbers have gone from 50 to over 100 million users, Spotify’s valuation has similarly been adjusted. It’s worth remembering, though, that while the total subscriber number sits somewhere north of 130 million users, approximately 60 million are paying listeners.

So Spotify is big enough to attract attention and generate a lot of excitement. In fact, because Spotify is such a well-known company to go public, an IPO roadshow seems to be precisely what it would want. More attention and more hype might mean more money on gameday.

2. The Company’s Size

This kind of fast-paced growth also contextualizes the music company’s size in terms of its revenue. According to Daniels, the size of a company’s revenue will dictate how larger institutions view it; if the revenue looks too small, larger institutions could deem the company too early or too risky, and therefore might be uninterested. But given Spotify’s outsized growth, though, perhaps this is a reaction to its continued unprofitability (as of yet).

3. General Industry Climate

Daniels also noted that in some direct listing cases, the decision to forego a traditional IPO could be something as simple as a timing issue. Industries go through hot and cold periods, and a cold period could convince a private entity to forgo the public process.

However, this doesn’t typically apply to the music industry. Because of business with mainstream acts, music companies tend to be more well-known among public investors than, say, a company which perhaps works on tooling or shipping. Therefore, Spotify has no reason to think that the climate would change at all between now and an expected 2018 IPO date.

Going through Barrett’s list of reasons, we can see that Spotify’s direct listing doesn’t pass muster on these grounds. But there are two outside arguments that augment the viability of direct listing: saving money on the IPO process and stopping the clock on Spotify’s convertible debt raise.

Saving Money

Outside of Barrett’s outline for going direct, Spotify could limit costs by foregoing a normal, pre-IPO roadshow. However, experts have pointed out that this doesn’t make much sense. The money which Spotify would save on an IPO roadshow is negligible compared to the amount it would ultimately raise in a normal IPO.

But there are other ways Spotify can save money.

Stopping the Clock

Last year, Spotify took on convertible debt from Dragoneer and TPG, totaling $1 billion. According to David Golden of Revolution Ventures, by listing directly, Spotify could essentially “stop the clock” on these debt-conversions, and presumably, save itself tens of millions of dollars.

As a refresher, under the terms of these notes signed in 2016, Spotify was required to pay 5 percent annual interest, a figure that grows by 1 percent every six months for a total of 10 percent. Investors could then convert the debt into equity at a 20 percent discount of Spotify’s IPO price. If there were no IPO within a year, the discount at which investors could eventually buy back stock would increase 2.5 percent every extra six months.

The Questions Left Lingering

All of this leaves a lingering question: if neither of the two most-cited arguments hold water, does the decision to direct list have anything to do with Spotify’s $20 billion valuation? There have been, as of late, multiple sources which have raised concerns, expressing reticence and opining what a public Spotify will look like. Spotify did not respond to a request for comment.

The streaming market also faces stiff competition. Apple can subsidize its music service until the end of time through its phone and computer sales. Facebook just signed a major deal with Universal, and YouTube is gearing up for its own music service launch. Pandora has just created a Spotify clone, and its post-IPO performance doesn’t bode overwhelming optimism. All of this is now against the backdrop of a $1.6 billion lawsuit filed by Wixen Music Publishing against the streaming music company.

Additionally, here are a few numbers we don’t know which will impact Spotify’s business model long-term:

  1. What Spotify royalty rates are. It has been reported the company pays anywhere from 58 percent to 83 percent.
  2. How often Spotify needs to renegotiate royalty deals with the major labels.
  3. What the percentage stakes each major label owns of Spotify.

We’ll see how things roll out by the end of Q1.

***

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

2018: A New Year with New Goals

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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!

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

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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.

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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

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Originally published on Crunchbase News on May 17, 2017.

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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

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Why democratization and identity are the future of music.

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

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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 points made by bitcoin enthusiasts, wherein a control-dynamic is illustrated. Controlling access to the material—in this case, bitcoin—is the ultimate power, and any major purchaser can go directly to a bitcoin supplier (i.e. miner) and negotiate significant discounts for their volume of purchase.

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 II: Shifting the Paradigm

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How a new music paradigm is rising out of the wreckage.

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

The second act in the “bundled/unbundled” production is the “bundled” piece. It’s about exploring the bundling process as it pertains to music, and really trying to determine the proper scope of examination. Said scope, when broadened enough, shows a shifting paradigm of power and perception rising out of the wreckage of the previous music landscape. It’s similarly divided into three parts:

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

The first of these is an exploration of what types of bundling already exist, and how it might not be the right kind of bundling to pursue. The nature of peoples’ interaction with music has changed, so it follows that the things bundled in music should change as well. This is a particularly difficult thing to accept because it requires a reworking of thought regarding something already perceived as “done.”

The second part is a discussion of how power naturally shifts during these seismic events, and how the new power should be held by a previously dismissed faction: the artists.

This flows right into the last part, which is an exploration of how many of the things which should be considered and bundled may not be the “sexiest” or most exciting of things to include. But “sexiness” and utility don’t always go hand-in-hand, and reality prevails at some point.

BUNDLED

Bundled in the Wrong Way

This is the biggy. Inasmuch as many things in the music universe(s) have become unbundled, so too are there a variety of things that have also become bundled. In the light of all the unbundling going on (Chris Saad blew through an extensive example list from everything including music and news to relationships and war), it appears somewhat unsexy to talk about the things going through the bundling process.

Where unbundling is fast and sexy and simple, bundling appears slow and outdated. But in music at least, this is far too simple an assessment.

The reality is that there are many things in music that have always been bundled, but bundled in such a way that they appeared to be unbundled. Many of the things which “music” apps are now trying to tackle separately—distribution, marketing, social, ticketing, analytics, messaging and/or communication, and live booking—have always been bundled under the banner of the record label.

The label controlled virtually everything, from distribution and radio play (yes, payola is real) to marketing and fan engagement. If you wanted to exist as an artist, you needed to be a part of this world in some way. Otherwise, you were relegated to the “independent” pile, which in the years prior to 1991, was much less glamorous than it is now.

Power and Paradigm Shift

When the digital age hit, the unbundling of the record labels’ power began. Since around 2005, major label power has seeped, and independent power has reached new heights. However, in their new-found power, independents were also sold a myth that everything they needed could be solved by partaking in a variety of unbundled services, from analytics to social platforms.

What this myth fails to address though, is the massive time-suck it really promotes. There are a great many things that should be bundled. Things like analytics, ticketing, distribution, radio play, social engagement, community, and marketing should all be offered under the same banner of a startup or new company.

But—and this is so important—done so in a way where the artists retain their power.

Sexy vs. Unsexy

The unbundling that has occurred has amazingly and unexpectedly taken much of the power away from the labels and delivered it to the artists. Artists now have the ability to control nearly every aspect of their operation, from recording through distribution through community engagement. But they don’t really have it all in one place, for free (yes this is huge), with the level of choice they need.

They have a variety of music discovery sites to choose from, a variety of analytics engines to use, and a variety of social platforms to post on, among other things. This is too much, and simplification is necessary. A music company should offer all of these types of functions under its purview, wherein artists can then choose to use them—or not—as they like. Choice and freedom remain intact while efficiency and simplicity are underscored.

But why stop there? Why not tackle the unsexy things that major labels have always done and give that power back to the artists as well?

Have a company that encompasses all the functions above, and then add (fan-driven) radio play, legal information and resources, management, copyright, and informational context. In making the experience of one site all-encompassing, you then succeed in changing the artists’ paradigm, thus changing the music landscape.

Giving artists access to these “unsexy” things is just as easy as (easier actually than) giving fans access to the music they want to hear.

The only difference is that instead of focusing on half of the equation, you instead complete the circle, and do so independently of the former rigid structure.

The Power of Knowledge

Whereas the points of the previous piece—choice and format—led to the overarching concept of community, the three points here point to something different, but equally important: knowledge.

If knowledge is power, then bundling things in a new way to give artists access to more knowledge clearly translates to a shift of power in their direction. This upends the previous paradigm immensely.

As artists gain perspective and knowledge on things like music analytics, marketing strategies, and engagement statistics—as well as “unsexy” things like legal resources and contacts—the power shifts significantly away from the major record companies. Their power has always been cemented in two main things: money and knowledge. But once artists and creators have access to the second of these two things (knowledge), they can apply it flexibly to attain the first of these two things (money).

This creates major fissures in the current music landscape, and opens up a splintering ecosystem of new opportunities for creatives at all levels of music creation and engagement.

The next movement in the symphony will be Part III: Democratizing the Future, which will take a look again at a new unbundled dynamic. Concepts discussed will touch on how the new unbundling will change music ownership and identity.

Stay tuned!

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

The Spotify-SoundCloud Supergroup Is Dead

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Originally published on Mattermark on December 29, 2017. 

tl;dr: The SoundCloud and Spotify deal is dead. For Spotify, no deal avoids unnecessary headaches. For SoundCloud, the road ahead looks lonely as the platform heads into 2017.

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Cream. Bad Company. Temple of the Dog. These were some of the greatest supergroups that ever existed. The Spotify-SoundCloud union could have been next, but like many supergroup concepts, it only lasted a short time.

The real question is why. Ultimately, in my view, the deal died because SoundCloud tried to become something that it wasn’t, alienating its core fan base in the process.

It was easy to argue that a Spotify-SoundCloud combination could benefit each party: SoundCloud’s independent-heavy catalog and Spotify’s major label material are natural complements.

But the prospect is no longer on the table. It recently became known that Spotify passed on acquiring the little orange cloud.

Let’s talk about why that happened.

Supergroup Not

2016 was not kind to SoundCloud.

Despite signing deals with major labels, securing its largest to-date funding round, and launching its own subscription service, key questions remain concerning its current operational results, where it fits into the M&A landscape, and what an independent SoundCloud looks like in 2017.

Fiscal Expense

Mattermark recently examined, broadly, who could afford to buy SoundCloud, now that Spotify has left the table.

To understand why Spotify might have passed—neither Spotify nor SoundCloud responded to requests for comments regarding this piece—on SoundCloud, it’s worth remembering the smaller firm’s P&L.

SoundCloud’s revenue quickly expanded from $1.8 million in 2010 to $9.6 million in 2012, to $19.6 million in 2014. Its losses tracked upwards, however, from $2.01 million in 2010 to $14.9 million in 2012, to $44.2 million in 2014.

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Much like Spotify and other streaming services, some SoundCloud revenue quickly passes through its books. In SoundCloud’s case, around 80 percent of its revenue from a portion of its aggregate top line goes right to labels. Spotify’s results are similar.

The context for those numbers is simple: SoundCloud has raised around $193 million to-date over a series of five rounds. Just comparing the company’s through-2014 losses, SoundCloud has spent around half its raise so far. And since we’re not including more recent operational results, that figure is very conservative.

The Sophomore Slump

If 2010 to 2013 was SoundCloud’s breakthrough album, then 2014 to 2016 was its disappointing follow-up.

Beginning in 2015, SoundCloud started to move away from its initial user base of independent artists and began courting major labels. The company inked a deal with Warner in later 2015 and Universal Music in early 2016.

Warner and Universal were joined by the last remaining holdout in March of 2016 when Sony signed on. That effectively marked the end of SoundCloud’s days as the independents’ playground.

Following the three major label deals, SoundCloud released SoundCloud Go, its entry into the music subscription wars. The company has yet to report major gains from the subscription product. I’d posit that it may be difficult for SoundCloud to entice music fans to the service. If potential subscribers are interested in mainstream music, they can already go to other music services.

Money Talks

While Spotify sports extensive independent material, its focus is major label artists. That fact did not escape those who made the argument in favor of the combination. SoundCloud’s huge base of independent EDM, acoustic, rock, and other artists could help balance the scales and provide a funnel into the Spotify nest.

If the argument for Spotify buying SoundCloud was that the latter could help the former pull in independent music, do SoundCloud’s operational results matter?

The answer is yes, as Spotify doesn’t want anything to threaten its impending IPO.

Earlier this year, I took a deep dive into Spotify’s own financials, examining the numbers and reasons that they already might have a tricky path to IPO. New cost centers could make that already difficult-looking trek nigh impossible.

Even with SoundCloud’s legal issues seemingly taken care of by major label deals, SoundCloud’s subscription service arrived to lackluster reviews, and its sizable debt may present too much of a headache for Spotify just before their looming IPO.

This is all especially stark considering SoundCloud’s desired price-tag of $1 billion. Even with Twitter’s most recent $70 million investment into the service, valuing it in the neighborhood of $700 million, Spotify would still need to pay an additional $300 million to close the difference.

2017

What does this all mean for SoundCloud’s future?

As with Spotify, the major labels now have a vested interest in SoundCloud’s existence. But that doesn’t mean that they have a long-term interest in its health. As I noted in my previous Spotify piece, the labels may not want to kill SoundCloud, but they also don’t have to go out of their way to help it. So long as it sends in revenue, who cares?

Some people will care. The danger could be that independent artists may care enough to go somewhere else more focused on them. (Since they operate independently, SoundCloud’s major label deals have no sway over their prospective decisions.)

SoundCloud’s challenge is that the faster it rushes to catch up with Spotify and Apple in the mainstream arena, the faster it may alienate its key demographic of independent artists; in working to compete with the larger, mainstream players, I wonder if SoundCloud has become what its initial user base—its core point of differentiation—was trying to avoid

We’ll see in 2017.

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

Unbundled, Part I: Reformatting the Barriers

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How unwrapping the previous barriers is changing music.

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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!