A single paragraph in the Wall Street Journal’s profile of Cür Media – the company behind new US streaming service Cür Music – offers a useful snapshot of music licensing in 2016, based on comments from CEO Tom Brophy.

“After starting the company in 2014, he has obtained licenses from all three major record companies, giving them a collective $8 million in advance money as part of the deal and issuing them a 5% stake in the company,” explained the WSJ. “Cür still needs to raise more money to launch the service, Mr. Brophy said.”

One label executive quoted anonymously in the piece claimed that his company licensed the service ‘primarily because it didn’t want to turn down the advance money’.

As we reported earlier this year, Cür Media’s licensing deals with Sony Music and Warner Music included first advances due on 31 January. At the time, we also noted that the company had spent $5.5m on R&D and $1.4m on other general/admin costs in the first nine months of 2015.

On 18 February, Cür Media admitted in a public filing that it was “actively seeking sources of equity or debt financing, which may include a bridge financing and/or a public offering, in order to support its operations, as it currently does not have sufficient cash to meet its operating needs… If adequate funds are not available on acceptable terms, or at all, the Company will need to curtail operations, or cease operations completely.”

Necessary legal language, but also a neat summary of the challenge facing any startup trying to enter the streaming market in 2016 – amid a wider crunch for tech funding. Something explored by industry consultant Cortney Harding this weekend in a blog post titled ‘The Music Startup Meltdown’, which didn’t mince its words on the topic.

“Major labels still wield an enormous amount of power, and can easily stop a startup in its tracks if they want,” she wrote. “I talked to a label exec after Turntable.fm (remember them?) raised money in 2011, and he laughed about how much they underestimated the industry, and its uncanny ability to read Techcrunch stories about big funding rounds and ask for just that amount of money for licences.”

Labels have their own arguments about the necessity of advances at a time when they are trying to negotiate a delicate transition from a market driven by sales to one driven by streams.

Don’t just think about ‘big bad labels’ squashing startups, then. The worry is more about the interplay between funding, advance payments and general costs, and the industry’s need for inventive digital services that are in it for the long haul, while having a positive impact for creators, rightsholders and fans alike.

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