Pacemaker was one of the pioneers of digital technology for DJs, including a well-received tablet (and later mobile) app using Spotify as its music source. When Spotify pulled its API for DJ apps, Pacemaker moved to direct licensing.
Now the company is up for sale, as it prepares to launch its next incarnation: a ‘Redefining Radio’ service enabling people to broadcast their own music radio shows.
What’s being sold is a streaming service with more than 18m tracks from licensors including Sony Music, Warner Music, Empire and The Orchard.
It also includes technology developed with more than $15m of investment, and a portfolio of patents around creating and playing back its music mixes, as well as its ‘Automix’ feature for transitions between tracks, and its virtual decks interface.
CEO Jonas Norberg told Music Ally why Pacemaker is looking to sell now.
“When Spotify deprecated the DJ API, Pacemaker pivoted to a directly licensed catalogue. This solved the biggest problem, the need for a Spotify Premium subscription to access music on Pacemaker,” he said.
“Now anyone that wants to use Pacemaker can do it, but it’s an expensive $17 per month service. which creators are prepared to pay for, but not listeners, and that is detrimental to the acquisition funnel.”
Pacemaker currently has 3,900 subscribers generating monthly recurring revenue (MRR) of $64k. The company has stayed lean, with a team of five people based in London and Stockholm.
Norberg said the sale will help Pacemaker to launch its new service, which is currently in closed beta, and is planned to have a free tier.
“To license it and launch it, significant funds need to be raised, which is difficult in the current market. Therefore Pacemaker is looking for a strategic partner that shares the Redefining Radio vision to launch the new product with,” he said.
Pacemaker isn’t doing this in a vacuum: user-generated radio is a well-established space in music/tech. Mixcloud was founded in 2008, and in recent years we’ve seen startup Stationhead; Spotify’s music-podcasts creation tool and now its live audio expansion; and Amazon Music’s Amp.
That may help Pacemaker to smoke out potential buyers, with Norberg making the pitch for the technology that his company is developing.
“Pacemaker has built a tool that makes it possible for anyone to creatively engage with the music they love, empowered by the world’s best AI DJ ordering and mixing the tracks,” he said.
“With the new product we’re making it possible for users to add voice to their creations, so Pacemaker has the potential to democratise the creation of music radio in much the same way as YouTube revolutionised the concept of TV, or how podcasting has turned talk radio upside down.”
“And the supporting backend Recipe system that we have developed makes it possible to do all this in a very rightsholder-friendly way, and standard music streaming licences can be used.”
Looking back, Norberg has a firm sense of how Pacemaker innovated in the first place, and how that provided challenges to building a business around its technology.
“We were lucky enough to be the first to build a product on top of the Spotify DJ API, which was amazing. We could focus on innovation instead of music licensing, as any sane music tech startup would want to do,” he said.
“The downside was that the product was exclusive to Spotify Premium subscribers, and on average only 30% of the users we acquired could use our product. Therefore we couldn’t establish a growth channel and scale up quickly enough.”
However, if the company finds a buyer with resources to put behind its next-generation service, Pacemaker is hoping to enjoy a new lease of life.
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