Suppose you are an entrepreneur looking to disrupt the music industry with your new technology, or an artist looking to disrupt yourself. Where do you start?
As an entrepreneur, perhaps you build a minimum viable product (MVP) and bring it to a meeting with a music rightsholder.
However, many startups complain that major labels and publishers are more focused on licensing large catalogues and preserving their clients’ legacies, rather than solving or innovating around more fundamental structural problems in the industry.
As an artist, perhaps you part with your label, only to realise that for years you had let others handle your own business for you, and now are at a loss for how to use a dizzying range of digital tools to your financial benefit.
Both instances reveal an ingrained, dystopian discourse in the music industry that views technology as a stifler, rather than enabler, of progress.
Only recently has this discourse begun to turn around, thanks to a growing number of accelerators, incubators and other collaborative spaces dedicated to breaking down the silos between technologists and music-industry professionals.
For startups, there is Project Music, a 14-week music accelerator run by the Nashville Entrepreneur Center that gives startups $47k in seed money to innovate around everything from social music discovery to sheet music and the live concert experience.
For artists, there is Zoo Labs, a two-week, all-expenses-paid accelerator in Oakland that combines rigorous training in design-thinking and business development with dedicated recording time in studios.
For an even more holistic and multidisciplinary experience, there is 2112, a B2B incubator based at Fort Knox Studios in Chicago that not only boasts 160,000 square feet of recording, production and rehearsal space, but also houses nearly 400 companies across music, film/TV and other creative industries.
Music accelerators outside of the U.S. include UK-based Abbey Road Red and multinational Marathon Labs – recently profiled in Music Ally – while music-industry conference Midem also has its artist accelerator initiative.
Meet Winston Thomas, aka DJ Blackout. Winston is the co-founder of RecordGram along with Erik Mendelson, and we’re very glad to have him here with us at Project Music. Be sure to check out the link in our bio for our interview with Winston! 👆 • • • • • • • • • • • • • #nashville #entrepreneur #miami #reggae #startuplife #hiphop #djblackout #recordgram #projectmusic
‘A SPECIALISED ENTREPRENEURIAL ENVIRONMENT’
Although these accelerators and incubators vary in size, location and target market, they point to many important themes in the larger story of innovation in music.
Firstly, the music industry’s unique structure and history requires a specialised entrepreneurial environment separate from a traditional startup accelerator.
On one hand, each of the industry’s multiple stakeholders has its own financial motives and ease of dealing with increasing rates of innovation. On the other hand, many earlier founders of music startups were more technologists than artists, and did not have an understanding of the music business’ nuanced complexity.
This dangerous combination of information asymmetry and one-directional fear (music industry being afraid of technology, not the other way around) has led either to a lack of technological progress or to a surge in innovation that did not respect the music industry’s history.
Hence, music accelerators and incubators strive to combat this fear and asymmetry through education and collaboration.
In addition to educating its entrepreneurs about the music industry, for instance, Project Music gives them direct access to music-industry veterans from the likes of Warner and Sony Music as well as service providers in accounting, finance and other business operations, applying theory and discourse directly to practice and securing long-term mentorships.
“Through Project Music, we have built a diverse advisory board whose members work across multiple sectors in music and technology industries – ranging from artist management and brand marketing, to tech commercialisation,” says David Blutenthal, founder of Snapwave and current Project Music participant.
Another important factor in music accelerators’ growth and success is their strategic location in key music cities.
“Success in music is built on access to the industry,” says Heather McBee, Vice President of Accelerator Programming at the Nashville Entrepreneur Center. “Music startups need to be in cities like Nashville that have multiple points of access to all industry stakeholders, including merchandisers, artists, managers, labels, publishers and booking agencies.”
Oakland, Zoo Labs’ home base, also boasts an important role in the history of music: it was a focal point of West Coast blues and jazz throughout the 20th century, has recently gained a reputation for its strong “DIY” music scene, and claims the highest concentration of artists per capita in the country.
Chicago has a similarly renowned, if not more fragmented, creative legacy. “Chicago has a strong history as a hub for the music industry, though resources have been spread across the entire marketplace,” explains 2112 director Scott Fetters, who also serves on the Board of Directors of the Chicago Music Commission.
“The density of industry created by Fort Knox Studios and 2112 not only fosters collaboration locally, but helps elevate the awareness of Chicago’s industry on a national and international level.”
‘THE PRODUCT IS NO LONGER JUST THE MUSIC’
Proximity to the industry also ensures that entrepreneurs are focusing on genuine problems that music professionals face, instead of building products from a distance only to realise that their customer base is nonexistent.
This points to another important benefit of accelerators that is difficult to overstate: helping participants gain a clearer vision of their industry’s competitive landscape, and pivoting their product accordingly.
Since entering Project Music, for example, Blutenthal’s company, formerly known as Moodsnap, has “pivoted from an image-based music discovery service, to a global community that combines photos and music to create a visually immersive music experience unlike any other.”
In a similar vein, Zoo Labs encourages artists to think about how to monetise their career without just selling records. Its curriculum introduces artists to common startup vocabulary, including low-res prototyping, testing, rigorous customer development and other pillars of design-thinking.
It becomes clear through these processes that the product is no longer just the music, but rather the artist’s brand and its deeper value proposition to listeners. For example, ElectroSpit, which entered Zoo Labs in July 2014 as a “supergroup” of musicians and music strategists, conducted an ethnography on people’s interactions with music throughout their lives.
They discovered a growing market of people channeling music as a form of self-expression on Instagram, YouTube and other digital platforms, and have since shifted their focus toward building their own Talkbox-like hardware, using music as more of a marketing tool.
Because accelerators constantly challenge their participants’ assumptions about their world, creators tend to emerge from these communities catering to a better-defined niche and prioritising quality over quantity in their product delivery.
Contrast this with streaming platforms, which, with the exception of a few exclusives, aim to be as ubiquitous and comprehensive of a resource for musical content as possible. Through these programs, artists and entrepreneurs are learning that creating experiential content that satisfies edge or niche cases in music is a more viable approach.
“There’s an adage in Silicon Valley: Instead of competing over the big overcrowded watering hole, find the smaller overlooked watering holes and grow there,” says Zoo Labs Cofounder and Executive Director Vinitha Watson, who previously opened Google’s first satellite office in India.
“In the same vein, we push artists to venture outside the noise and channel their ambitions into an audience and relationship that’s as unique as their music.”
‘BLOCKCHAIN IS A TRUTH SERUM…’
In fact, the most innovative and successful ideas tend to be the most polarising at the outset because of their extremely small but passionate customer base. “When people either love it or hate it, you know you’re onto something,” says Blutenthal. “It’s a signal for you to market your product to that one segment of consumers who say, ‘You made this for me.’”
Perhaps the most evident example of this polarisation is the rise of blockchain in the music industry. “Blockchain is a truth serum applied to those who say they want change, but fight it,” says Shawn Yeager, Partner at Back Porch Group and former Mentor at Project Music.
“It’s as much about the emotional reaction it incites within the industry as it is about the technology itself. Watching people resist and argue about a new foundational infrastructure for the industry exposes those who are quite happy with business as usual – the ones who may lose out if this innovation is successful.”
Zoo Labs’ mission is perhaps also polarising because it encourages artists to break from the inflexibility of major label and publishing contracts, in pursuit of a fully individualised and autonomous business plan.
This goals falls in line with larger trends in the arts that are perhaps overshadowed by mainstream industry practices: according to the Strategic National Arts Alumni Project (SNAAP), between 15 to 20 percent of all arts graduates start their own enterprises, and 75 percent have been self-employed.
“Instead of thinking about outside help – can I get signed to a label, can I get a manager or agent – it’s important for artists to think from the standpoint of self-empowerment and how they can be more entrepreneurial in their careers,” says ElectroSpit founder Bosco Kante, who previously collaborated as a producer with artists like Kanye West and J. Cole.
In addition to increasing artists’ business confidence, the Zoo Labs curriculum mitigates the inherent risk when artists approach labels by testing and validating business plans on a lower level ahead of time.
“Artists and bands often become the product rather than the owner of their business,” says ElectroSpit Brand Manager Maya Kante. “Zoo Labs makes sure those artists stay in position of leadership.”
‘THEIR CREATIVE PROCESS IS MESSY – THAT’S WHAT MAKES THEM ARTISTS’
At least today, however, it is impossible to eliminate all the risk in approaching major music institutions with new technologies. One reason stems from simple career priorities: as previously mentioned, many music executives care more about legacy than about innovation, and new products will only add to their already busy workflow.
In a 2015 statement on the Country Music Association (CMA) website, Joe Galante, CMA Board Member and Mentor at the Nashville Entrepreneur Center, asserted that entrepreneurs’ passion for “build[ing] solutions without being burdened by day to day legacy issues is important to changing the game.”
Related to the burden of legacy is the notorious lack of innovation to date around licensing and copyright. Entrepreneurs looking to license major catalogs need to appease a long tail of rights holders, and can expect not only to pay millions of dollars, but also to wait for as long as a few years to gain the necessary rights.
An incessant focus on licensing problems has largely drawn investors’ eyes away from the myriad of other possibilities in the music-tech space.
“A common misconception for investors in music-tech is that you have to put in way more money than you can get out,” says Ayinde Arnett, founder of artist-discovery startup Upnext and one of the few entrepreneurs participating in both Project Music and 2112.
“This impression has been brought about by large streaming services like Spotify, Pandora and SoundCloud, which are trying to license major catalogs for tens of millions of dollars on the front end. This likely won’t lead to a high ROI, as opposed to other music technologies that are targeting the independent market, like Upnext, or dealing outside of music licensing.”
Artists can also be obstacles for music startups, if they themselves do not embrace an entrepreneurial spirit. “It’s extremely difficult to build a viable business with artists as your primary customer segment,” says Yeager.
“Their creative process is messy – that’s what makes them artists. Even if you offer them an apparently better, more lucrative way to do some or all of it, it’s rarely enough to change their behaviour. While focus is always crucial for building a product, only catering to artists, let alone to those willing to spend money on career tools, drastically reduces the size of your market.”
Just as in the music industry at large, artists’ historical skepticism toward new technology is as financial as it is ideological. “Artists are more selective consumers than you would think,” says Arnett. “Most of them are working on a limited budget, so are very discerning about their marketing spend. It’s important for them to find the right fit and exposure with whatever new technology they adopt.”
By providing a comprehensive education on the music industry, startup accelerators hope to help entrepreneurs, artists and other stakeholders work together in a more efficient, empathetic manner in the long run. Meanwhile, one of Zoo Labs’ key goals is to restore the alignment between business and creative thinking for artists—and make the artists themselves entrepreneurs and founders in their own right.
“Musicians and other artists are natural entrepreneurs – they’re just often not branded that way,” says Zoo Labs Cofounder and Partner David Watson. “You already see this in the tech world, where the best entrepreneurs are the most creative ones. Business today is an inherently creative endeavour.”