Analysis

Music startups pitch their wares at Music TechPitch 4.5 event


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We’ve already covered the keynote speech at tonight’s Music TechPitch 4.5 event at EMI’s headquarters in London, where EVP of strategy and insight Jim Brady explained why a major label is so keen to be working with external startups and developers. Next it was time for some startups to pitch their wares.

Eight were taking part: DizzyJam, Hitlantis, Hooolp (that’s three ‘o’s), Mobile Backstage, Isophonics, Seevl, Webdoc and Xylyx. They were presenting to a panel of judges including representatives from Bootlaw / Pinsent Masons, EMI, Rockabox Media, Eden Ventures, TheNextWeb and Doughty Hanson Technology Ventures.

Our notes follow from the eight 10-minute pitches. Any quotes are from the company’s presenters, while the questions are from the panel of judges.

DizzyJam

The problem is declining record sales, and one way to claw those revenues back is selling more merchandise. But that’s expensive to produce. So DizzyJam makes it quick and easy to create an online merchandise shop for artists, who upload their designs for clothing and merchandise, which is then sold direct to fans – the artist takes 25% of the proceeds.

It’s currently bootstrapped in terms of investment, with 2,000 bands signed up, three of which are UK Top 10 artists, and has generated “tens of thousands of pounds” of revenue already. It wants to be the top independent music merchandising company in the world. It wants to be turning over more than a million pounds in annual revenues by the end of its third year, and “exit shortly after that”.

Why is this different from something like CafePress? Not much on the fulfillment side, but “I wouldn’t say their quality is bad, but ours is much, much better”. Also DizzyJam can sell MP3 downloads alongside the physical merchandise. “We know lots of our clients jump ship from those generic services to us.”

However, DizzyJam isn’t going to try to be a CD Baby and become a fully fledged distributor. And it won’t sell “low-grade tat” like G-strings either – another dig at companies like CafePress.

Hitlantis

Hitlantis is all about cognitive maps and “content discovery disruption”. The idea being to find a more visual, relevant way for people to discover music than most current services, which rely on what’s essentially a search box.

“We came up with a completely different kind of content platform with visual browsing.” It’s a swirly map of balls, with each ball representing an artist. The more popular they are with people using the service, the closer to the centre of the map they move. It’s available online and as mobile and tablet apps.

How different to services like TuneGlue and Aweditorium is this? “We are the first commercial manifestation of pure data visualisation,” he said, before explaining the business model. It’s free for users at its basic level, but in order to participate in competitions organised through partners, bands pay the company. Bands from more than 40 countries and users from more than 100 countries are using it, too.

Oh, and the company is planning to diversify beyond music. “We’re gonna have Gamelantis, Booklantis etc. That’s another story…”

Hooolp

Hooolp is about live music discovery. “Probably you have a lot of music in your iPhone and you want to figure out where the bands are playing in your region”. So it’s a bit like Songkick, but with a focus on finding the best-priced tickets, listing different online ticketing providers in order of price for each artist’s individual gigs.

It works across mobile, the web and Facebook. Hooolp’s platform was used for Berlin Music Week in 2010 and 2011. It will make money from banner ads, ticket commissions and unspecified ‘B2B deals’. The service is currently only available in Germany, but is looking to expand.

Hooolp currently works with 10 ticket providers in Germany, and all pay it a commission on tickets sold. “It was hard to make the co-operation…” The company’s app went live in Germany last Saturday, while the website is currently attracting around 1,000 visitors a day.

Mobile Backstage

Mobile Backstage helps music artists make apps – a rival to Mobile Roadie. Although it uses the term “digital fan club” to describe what it provides. “The most valuable asset is the connection between artists and fans”. Its apps are used by artists as well as fans: the artists can shoot photos, videos and record audio to send out to their fanbases.

The service is partly about creating apps, but also a web dashboard for artists to dig into analytics. It also offers a Facebook app to visualise what’s happening with an artist’s fanbase. 90% of fans who have downloaded a Mobile Backstage app are classed as active – one artist generated more than two million page views in its first month with an app.

Revenue comes from ticket, merchandise and music sales, as well as monthly fees from artists for the service. Premium content and subscriptions within the apps will also provide income for the company (and its clients, obviously). “In four months we will be the number one player in this sector globally…”

And the difference to Mobile Roadie? “They offer applications… But if want to hook these fans and monetise those for later, we can help you. This is a tool where you can generate a lot of applications and traffic there… But Mobile Roadie’s a great company.”

Isophonics

Isophonics is a platform for discovering music through various factors, from similarities between songs, social-cultural factors. But it also has an “MPEG-M trading digital media ecosystem”, and social music network enabling… something.

We have to admit, the presentation was very fast and very baffling. Click on the link above for the project’s website though: people who had seen it beforehand said later that there was some genuinely impressive technology at work here. “I call it a digital revolution,” said the presenter.

Seevl

More music discovery. “We want to recreate the experience that people have when they discover some music in a retail store”. So not just searching for specific tracks, but finding the links between artists and songs – not just finding new music, but understanding why they should like it. And it ties into YouTube as the source for the music.

It plans to make money from paid search and sponsored recommendations, and semantic web technology is what provides its secret sauce. The judges wondered if making money from paid searches will conflict with what Google does on YouTube, though.

But what prevents Google from doing this themselves? “We’ve got lots of data to do these searches and provide these results”. Although Google isn’t exactly a novice when it comes to data…

Webdoc

Webdoc is about “democratising the web”, letting people express themselves using web content “as fast as a tweet”. It sits between a status update and a blog post in terms of length and complexity. Rich media posts, in short. But brands can work with it too, including music companies getting artists to use Webdoc.

A Webdoc post can include links to (and pull content from) iTunes, Google, Soundcloud, Facebook, Twitter, Flickr and other web services. People create Webdocs using a drag’n’drop interface, and it can then be embedded on Facebook and websites, shared on Twitter and other sites. And artists can encourage their fans to create their own Webdocs in response – a recent campaign for Nirvana did just this.

“Our revenues will come from advertising: sponsored Webdocs looking like content but acting as advertising. We will also propose some premium services.” Currently, 300,000 unique visitors are looking at Webdocs. And when asked about competition from Tumblr, they said that a lot of people actually embed Webdocs on their Tumblr blogs.

Xylyx

Xylyx is all about automating payments – including to musicians. “We enable new business models and we reduce the cost of existing business models.” The case study being a musician who sells an MP3 in Australia and then might take two years to get paid (does this really happen?) Xylyx says it can handle the process in real-time, anyway.

So it takes money in, and handles the payments to artists, labels, publishers and other people who need to be paid. And it has another company called eebiiz, which provides ticketing for gigs using QR codes and mobile technology.

Who’s using it at the moment? The company says it has customers all over the world from all industries, including an artist called Karen David – “one of the stars of the new series being filmed with Kiefer Sutherland and Danny Glover”.

Final Judges Comments

The judges finished off by giving their views on the different startups. Here’s some key comments:

Dizzyjam was seen as a good pitch with a clear business model, although more information needed on how it plans to attract more bands. Can it address the problem of bad band merchandise – helping bands with the design of their merch. It apparently has plans on this score though.

Hitlantis may have struggled to get its explanation across in the three minutes allotted, but the presentation was seen as very dynamic. There was scepticism on how much people want to play with a discovery interface, as opposed to just listen to music.

Hooopl is playing in Songkick’s space, so it needs a strong differentiator – at least one stronger than its current ability to discover gigs by genre. The judges also suggested spending more time on the social features, and work on partnerships with other websites, as Songkick has.

Mobile Backstage was praised for its customisation features, although there was a question about how it’s different to how bands engage with fans on Twitter. But the stickiness of Mobile Backstage’s apps was seen as a very good point.

Isophonics was seen as a very technical pitch that was hard to grasp. “It sounds as though there may be some really interesting technology there, but that kind of got lost in the pitch”. So there may be a business in licensing the technology to other vendors rather than going direct to consumers.

Seevl was praised for its pitch and the broader idea of meta-search, but the judges warned about potential legal pitfalls. And it may need to find content partners who are willing to do a revenue share deal. And with quite a few music recommendation services out there – Echo Nest, Last.fm and others – might spur a move for Seevl into other kinds of media like books.

Webdoc won warm words for its clear presentation, and the idea that people can create well-designed widgets without technical or design expertise. “Anything that allows people to create content easily that also looks good is a big thing”. Although there was a warning about moderation – what content will labels allow fans to create using Webdoc?

Xylyx, finally, resonated for the industry’s desire to make payments faster and more transparent. The judges would have liked to see more examples of the product in action. “Anything that can streamline the billing process and get the artists paid faster, we’d be up for it!”

And the winner is…

An audience vote agreed with the judges’ vote: Webdoc was the winner, while DizzyJam took the runners-up spot.

Stuart Dredge

One response
  • Alex. says:

    Hi Stuart – thanks for the write up !

    I just want that our data is built as a large graph of structured entities (genres, artists, etc.) and relations (influences, membership, etc.) from various data sources on the Web – rather than just plain text documents.

    If you have any question, just let me know.

    Best,

    Alex.

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