Once upon a time, startups had a hard time even getting a meeting with major labels, let alone striking any kind of deal. Nowadays, labels are all aware of the need to open their doors wide to new ideas from fledgling technology companies.
Tonight saw the second EMI Innovation Challenge event, organised by Music Ally and EMI, and held at the label’s offices in London. Eight startups pitched their technology and business models in front of an industry audience, trying to impress the crowd, but also five judges.
The judges for the contest were Christina Chen from DN Capital; Bertrand Bodson from EMI Music; Martin Mignot from Index Ventures; Tahir Basheer from Sheridans and Nadav Poraz from WhoSampled – the startup that won EMI’s last Innovation Challenge event.
Joytunes won the event, but below is our report as it happened. The event involved two rounds: straight pitches followed by a group discussion.
The first pitch came from Cathal Furey, CEO of 45sound. “A solution to a big problem,” as he described it. “Everyone who goes along to a live show now has a high-definition video camera in their pocket, in a smartphone,” he said, noting that people then share the footage they shoot on social networks and YouTube.
“But that content doesn’t really benefit anyone, because the audio is recorded with a very small microphone that gives a very thin and distorted audio quality.” 45sound’s technology scans videos shot during gigs when uploaded to its site, then replaces the audio with a feed from the sound desk.
“It’s all about partnering with bands and labels,” he said. The idea is they encourage fans to upload their videos to 45sound, while also providing the master audio feed. Then 45sound uses its proprietary algorithms to analyse the clips and match them with the high-quality audio. The company has apps to help people upload, or they can do it from a computer later.
The business model: working with brands, white label its technology for other companies, and work with labels at the development stage for artists, sharing advertising revenues.
Furey explained that 45sound can take in footage shot on any camera, rather than just iPhone or Android smartphones. And because it’s all about partnerships with artists and labels, the latter deal with the publishing rights side of things.
Second up was BuddyBounce, and co-founder Emma Obanye. Her company is “a loyalty and engagement platform that helps musicians get to know their fans”. She started with the example of Justin Bieber, whose fans famously will do almost anything to get close to him.
The problem: “Artists are extremely busy and they can’t engage with everyone, and it’s really difficult for fans to stand out from the crowd when you’re just one of many,” said Obanye. So BuddyBounce helps fans to earn points and badges for their fan activities, which can then lead to rewards – for example an exclusive gig with a star like Bieber.
Gamification, in other words, with the aim of providing labels and artists with clean data on their keenest fans.The business model includes subscriptions for fans, sponsorship from brands, and also affiliate sales of tickets and merchandise – with virtual item sales coming further down the road.
It’s in closed beta with around 400 fans, and its first reward came yesterday by giving eight fans VIP tickets to see Bieber’s gig at the O2. “We had about 250 fans take part, and about 40,000 interactions and activities come through our dashboard,” she said. By August this year, BuddyBounce hopes to have 20 established acts signed up and using its dashboard.
How do they prevent the service getting spammy, as fans get desperate to win a reward? There’s a badge for reporting such spammy content – so self-policing among the community.
Third up was Joytunes, and its co-founder Yigal Kaminka. He’s a professional classical musician, by the way. He started with a survey showing that 60% of US households have at least somebody playing an instrument, but that eight out of ten non-musicians wish they played one.
These are the people Joytunes is trying to help. Kaminka shoed an app called Piano Dust Buster, released about eight months ago for iPhone and iPad, which has so far notched up more than 1m downloads. It gets players to tap notes on a real piano to help a cartoon old-lady dust in the app – while also playing a familiar song.
“Piano Dust Buster soon came to be a top-10 music app in more than 70 countries, with 800,000 songs being played every week,” he said. “It also caught the attention of thousands of music teachers who are already registering with us and using this with their students.”
Kaminka suggested that Joytunes’ tech could offer artists a new way to promote themselves. Users learn to play and interact “intimately” with the artists’ songs, but artists can actually participate in the educational process by becoming mentors in the games. The app also includes a “clever recommendation system” to help users discover new songs to play.
“This is just the beginning. We will very soon be expanding to more audiences and more instruments,” he said. The company currently has apps for piano and recorder, but a deeper piano app is launching in a month or so’s time. Joytunes has a patent pending for its recognition engine – which tells if the player is playing the right notes on their instrument.
“The whole point here was you could take your own instrument and play with that,” he said. Joytunes currently makes money by selling songs and song packages in-app, with a subscription model recently added, which Kaminka said “is working extremely well for us – the conversion rate is in the double digits for the piano users”.
Fourth to present was Joanna Alpe, CEO of Makelight Interactive. “We make smart special effects for live events,” she explained. Remember the Olympic Games opening ceremony, where the audience were turned into the light display? Makelight has a smartphone app to deliver the same effect, at a much lower cost.
Its customers are “bands, brands and sports teams… this communication channel is measurable, and we can monetise that for our clients” according to Alpe. So, the idea is people at a gig waving their smartphones in the air running Makelight’s app, which changes the colour and display accordingly.
“Increasingly, bands and sports teams are making their money on the live experience,” she said. “We offer not only a special-effect like no other, but also an interactive communications channel.” The company is talking to a mixture of labels, mobile operators, games publishers and ad agencies (EMI, EA, Telefonica and Wieden + Kennedy being four logos displayed in the slide deck).
The app can work for stadium and arena shows with its special effect, but then supply brand sponsorship within the app. It can also provide affiliate links and transactions: merchandise, ticketing etc – and it can also drive Facebook Likes and other social media actions, all from within the app.
How many people at an event need to have the app to make the effect work well? “In the testing we’ve done we’ve had pretty good uptake,” said Alpe, citing a test with 2,000 people that got 80-90% of the audience downloading the app. Other tests have shown an engagement rate of 50%, so it depends on the event and the fans. “It certainly still works down around the 40-50% mark,” she said.
Fifth to present was Ronen Barzel, CTO of Musemantik, presenting its product MusicFlow. “A new way to create soundtracks for films and videos,” as he put it. “It changes the way filmmakers and composers think about soundtrack creation.”
How? The idea of a “dynamic music score” allowing the filmmaker to customise music to follow the emotional flow of their visuals. So fear, excitement, loathing, anticipation or other emotions are tagged to the video, with the soundtrack then adapting around them. “It’s not just changing the music, but it’s arranging the music to match the curve,” said Barzel.
The service all runs in the cloud, with music written by composers in Musemantik’s dynamic score format. “MusicFlow can create multiple, unlimited, customised versions of their soundtracks,” he said. With the benefit that their clients can tweak the music to their preferences without having to constantly go back to the composers.
Musemantik has three major sources of revenue planned. First, filmmakers pay it pay-as-you-go fees or subscriptions, and the company then pays royalties to the composers. Secondly, it can sell its tools to film schools and other production companies so they can produce their own dynamic scores. And thirdly, it can white-label its technology to other companies. “One can imagine a button to do this on YouTube,” he suggested.
Its beta service is live, and the company has raised £200k so far, but is looking for another £400k for its future plans. The technology works for various musical genres, as well as soundscapes.
Sixth to present, aptly, was Six3 and CEO Leigh Middleton. It’s aiming to help labels and artists increase fan engagement with “a mobile-centric video advertising platform: it allows you guys to engage in a two-way conversation with a captive audience, asynchronously”.
How? It has a mobile app, which lets people create 63-second videos, apply Instagram-style filters to the videos, then share them to Six3, Twitter and Facebook, or send them privately to an email address or Facebook contact. The idea being that artists can also be using it to post videos for their fans to watch. He gave an example involving Lianne La Havas.
“You could sell the record, or the mic she’s using to sing the record on, or the drumkit in the background that the drummer is playing on,” he said. Six3 is aimed at 13-24 year-old “video natives” who see it as second nature to communicate through videos. So they’ll be messaging one another using the Six3 app, but also seeing videos from their favourite artists (in theory).
How will Six3 get people to hear about its product? Middleton said the company is strictly B2B, and is talking to a couple of major labels about distribution. “We see this working for any kind of business: personality-led businesses,” he said, citing talks with a sports company as one example. “The difference between us and YouTube is we focus on communication… and also we’re mobile-centric.”
What about Twitter’s Vine app? “We see those guys as creating disposable video content. You can’t really communicate in six seconds. What we’re offering is 63 seconds, or at least up to 63 seconds… but if people are more aware of how to use video in a creative way, it helps us.”
Next up: David Baker, founder of Spins.fm, which is aiming to “reinvent radio requests” using social media. He noted that terrestrial radio still has more listeners than all the streaming music services combined. “Despite the popularity of radio, the current request line is broken,” he said. “We’ve solved this problem by creating a platform that connects fans, artists and radio stations.”
Here’s how it works: on the Spins.fm homepage, fans can request any song on any station, although it taps into the user’s location to suggest the most likely station. So far in the US, there have been more than 1.1m fan requests using the platform. The company makes money by charging for customised apps embedded on artist websites and social networking profiles to help fans make requests. Baker showed an example recently launched for 50 Cent.
Britney Spears, Chris Brown, Ne-Yo and other major artists have used Spins.fm – all paying customers (well, their labels are, obviously). “We’ve recently expanded to the UK,” noted Baker, offering everyone in the room three free artist apps. Meanwhile, stations can install their own widget on their website to help fans make requests through Spins.fm. Three of the six largest US radio networks are working with Spins.fm, but fans can still make requests to the others.
How does Spins.fm relate to emerging online radio services? Right now it’s focused mainly on terrestrial stations with human DJs, but Baker warned that the decline of traditional radio is still not as drastic as technologists would like to think – there’s not an urgent pressure to integrate with the online channels, in other words.
The final startup to pitch was Weezic and co-founder Nicolas Arbogast. “Weezic is reinventing music practice based on augmented sheet music,” he explained. “Many musicians play alone in their room with paper sheet music, limited tools, and nobody to help them improve their playing, nobody to help them get motivated on a daily basis.”
Yet he noted that there are 200m amateur musicians in the world – the market Weezic is trying to address. So musicians can play along with sheet music, turning individual instruments on or off, slowing down or accelerating the tempo as required. It’s available as a web app or an iPad app, with users able to record their own playing and get feedback on whether they’re hitting the right notes.
“In a few weeks you will get a store with sheet music to purchase for a few Euros,” he said. “We are working with music publishers to switch their sheet music libraries to augmented sheet music.” The company is looking for more publisher partners, as well as financing from VCs, angel investors and the music industries.
Is it expensive for publishers to get their music converted into augmented sheet music? “It is low-cost for the publishers,” said Arbogast. “We can do it this year and very fast.”
END OF ROUND 1
At this point, four startups were voted through into round two by the judges. They were BuddyBounce, Joytunes, Spins.fm and Makelight Interactive, who all took the stage for a group discussion and Q&A. Starting with a question about where they see themselves in five years’ time.
“In a few years time we see ourselves being the number one platform for fans to show their passions for artists, and for brands and labels and artists to reward them,” said BuddyBounce’s Obanye, who noted that her company is currently raising funding, which it hopes will help it get the scale to ultimately exit either to a label or to an agency who deal in this sector.
Joytunes? “Multi-instrument, every popular instrument and less popular instruments: we will be the way people start learning music,” said Kaminka. “Taking charge of the whole pile of people wanting to play, but making that pile bigger.” And an exit? “We can’t know. We are not planning on it right now: we want to promote music, music education and music learning.”
Spins.fm? It wants to continue its traction, become as ubiquitous as possible across the world; to continue building out its feature set – for example, with the ability for fans to dedicate requests to other fans, and perhaps even to record voice messages to be played on the stations; and to work with music tech startups – he cited MPme as one potential partner.
And Makelight: Alpe said she’s really excited about the API potential around its technology of real-time synchronisation. “While music and sporting arenas are our first ports of call, we can see other things spinning off from the technology: into conferences, into presentations, into second-screen applications.”
The startups were asked about what their value is for emerging and mid-tier artists, rather than big stars. Obanye said BuddyBounce’s choice of Justin Bieber as a proof point was deliberate.
“By going with a big artist we were able to get that viral effect and get people on the platform,” she said, while pointing out that smaller artists are trying to increase their fanbases – so that’s the appeal of using BuddyBounce, to reward the keen fans and attract others.
Kaminka agreed. “We have to start with the big artists, but we are already in negotiations with EMI in a pilot programme to have a specific app for a specific artist promoting his music and his songs,” he said. “The sky’s the limit here, and with our recommendations system we can promote other artists in the same genre.”
What’s the biggest weakness in their products today, or the most immature area they need to develop. Baker said Spins.fm is very focused on improving its dedicated mobile app for artists. It’s currently HTML5, so it can be integrated into artists’ existing mobile apps, but the company is working hard on it.
Obanye: “We haven’t launched our mobile app yet, but what we found especially from the users participating, a lot of them are from a younger demographic and using their phones.”
Kaminka said that Joytunes wants to launch its apps for Android devices, which he admitted is hard for a startup. Meanwhile, Alpe said that Makelight is very focused on getting its app into the hands of concertgoers, to get the necessary network effect. “We’ve definitely worked out some key strategies that will see us get over that uptake hump.”
At this point, the audience got to vote on their favourite startup of the night. And the winner was? Joytunes!