The Music Xray Blog
technology enhanced identification of high potential songs & talent

Revenge Of The Record Labels: How The Majors Renewed Their Grip On Music

Posted by Mike McCready | April 17th, 2015 | No responses – 

Last October SoundCloud–a free music-streaming service with a massive 175 million monthly users–appeared to be running out of cash. News broke that the Berlin-based company had lost $29.2 million in 2013, and when a rumored $2 billion buyout bid by Twitter fell through, it looked like music’s hottest startup might be in danger of going bust.

Then something strange happened: Warner Music Group became the first major record label to strike a licensing deal with SoundCloud, instantly legalizing scores of songs posted to the service. More surprisingly, Warner acquired up to 5% of the company, adding to funding that’s passed $120 million; the company is now valued at over $1.2 billion.

Yet despite the credibility they bestowed on each other, Warner and SoundCloud have largely eschewed talking about the partnership–neither side would comment to FORBES–and have zealously guarded the terms. Why? A source with knowledge of the agreement says the record company acquired its SoundCloud stake at a discount of about 50% from what other investors paid. And such details illustrate a quiet revolution in digitization of the music industry that all sides seem to prefer go unnoticed .

Left for dead by most investors and pundits, the surviving Big Three labels–Warner, Universal and Sony–have quietly muscled out stakes of the hottest digital entertainment startups, including 10% to 20%, collectively, of the established streaming services, such as Spotify and Rdio. Terms are similarly stark for younger startups: The labels take stakes for free or on the cheap, and then often give themselves the right to buy larger chunks at deep discounts to market later on. It’s not just streaming: The labels have gobbled up pieces of startups ranging from choose-your-own-adventure music video purveyor Interlude to song-recognition giant Shazam–valued at $1 billion in its latest round–which counts Carlos Slim, the second-richest man in the world, among its investors.

And what have the labels been giving the startups, aside from legitimacy, to secure these sweetheart deals? All-encompassing access to the artists and their songs–a neat little trick. Sure, the artists derive some minimal amount of royalties from these new channels, but they aren’t getting any of the ownership.

“That’s the story of the music business,” says John Oates, one-half of Rock and Roll Hall of Fame duo Hall & Oates, who went independent almost 20 years ago amid frustration over their financial arrangements with labels. “It goes back to the earliest days–take it back to, ‘Give him a bottle of wine and take all his publishing for the rest of his life.’ 

The artists are starting to fight back–and not just by opting out of the system. Earlier this year Jay Z purchased Swedish high-resolution-streaming services WiMP and Tidal for $56 million, merging them into a single service to compete directly with Spotify. At the official launch 16 of music’s biggest acts were introduced as the new “owners” of Tidal, including Beyoncé, Calvin Harris, Kanye West, Alicia Keys, Jason Aldean and Daft Punk. Each was reportedly offered a 3% stake.

Representatives from all three major labels–as well as Beats, Spotify and Rdio–declined or did not respond to requests for a comment on whether or not the majors demanded free or cheap equity in streaming companies as part of the price of doing business. But in industry circles, the practice is an open secret.

FORBES estimates that the three labels have amassed positions in digital music startups valued at almost $3 billion–or around 20% of the $15 billion or so the labels are collectively worth. The percentage will shoot even higher if and when Spotify goes public. And some bets have already paid off: Universal Music Group took an early position in Beats by Dr. Dre and owned 13% when Apple bought the company for $3 billion last year, resulting in a $404 million score. Artists + leverage = digital windfall. That’s the kind of math, applied across all their revenue models, that the labels hope puts them back atop the musical food chain.


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UPDATE: Believe Digital Acquires TuneCore

Posted by Mike McCready | April 16th, 2015 | No responses – 

“Today, TuneCore, the powerhouse digital music distribution and music publishing administration company which has earned Independent Artists over $504 million to date, announced it will be joining with Independent label services company, Believe Digital,” read the press release.

A sources with knowledge of the deal tells Hypebot that’s the partnership is more of an acquisition or merger with Believe Digital the senior partner. Believe Digital has now confirmed that it has acquired TuneCore. The two companies will retain their own operations and staffing.

French based Believe Digital is a leading independent digital distributor representing 8 million tracks with offices in 29 countries and a staff of 250. “There is a tremendous opportunity for TuneCore & Believe to champion independent artists and their entrepreneurship, and together our focus will be to provide the best comprehensive services to a wider range of musicians around the world.”

The deal will provide TuneCore Artists with an opportunity to tap into Believe Digital’s global services. Artists will now have access to a wider digital distribution network and a bigger tool kit. “Artists will continue to have full control over which products and services you choose to fit your individual needs,” promised TuneCore CEO Scott Ackerman in a letter to TuneCore artists.

Here’s what TuneCore and Believe Digital see has their combined strengths:

· TuneCore plus Believe Digital worldwide distribution and feature opportunities with iTunes, Amazon, Spotify and other key digital partners

· TuneCore worldwide revenue collection. Artists keep 100% of sales revenue and rights.

· TuneCore worldwide royalty collection with Music Publishing Administration. TuneCore will continue to register, license and pitch your songs in over 60 countries.

· TuneCore & Believe global support with offices in key markets worldwide.

· Believe Digital’s experienced team of music industry and digital marketing experts and video channel managers will continue to provide best in class label services to meet artists’ needs.

· Artist services and products to meet the needs of musician-entrepreneurs.

· Detailed reporting and knowledgeable customer service to help you manage and grow your business.


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Sources: Yahoo In Talks To Buy Foursquare

Posted by Mike McCready | April 15th, 2015 | No responses – 

Yahoo has been busy rebuilding its business around mobile under CEO Marissa Mayer, and soon it could make one of its biggest bets yet on the platform. We have heard perennially that the company has been looking to buy Foursquare, the New York startup behind the eponymous local search app and location-based social “check-in” app Swarm. The latest rumor we are hearing is giving the deal a price tag of around $900 million.

One source says that the “deal is done” but details are still being ironed out. Others have also confirmed a Yahoo/Foursquare deal is in the frame.

Yet other sources at Yahoo tell us they have heard nothing — nada — about the deal. Either this is elaborate, bicoastal speculation, or it is happening with only a select circle privy to what is going on.

Contacted for a response, both a Yahoo spokesperson and Foursquare co-founder and CEO Dennis Crowley declined to comment on rumor or speculation.

You may have heard this song before. As we said, this is not the first time Foursquare’s name has been floated as a potential Yahoo acquisition. On the part of Mayer, too, it could be a long time coming. When Re/code predecessor AllThingsD broke the news of Yahoo buying Tumblr, it mentioned that Mayer “closely watched” progress at both New York startups when she was still at Google, before coming to Yahoo.

In that sense, it’s the rumor that refuses to die.

The chatter we are hearing could potentially mean that Foursquare is in play with other suitors, too, but since our sources pointed directly to Yahoo, here’s a rundown of how this could make sense:

Foursquare has to date raised just over $162 million in funding, with its last round, in February 2014 from Microsoft, valuing the company at over $600 million. That Microsoft deal also included a licensing agreement to power location context for Windows and mobile searches.

But Foursquare has also been at a crossroads. Since splitting its app into two last year, the Foursquare app has hovered in the top 25 of travel apps (by downloads) in the U.S. App Store according to App Annie. Swarm, meanwhile, has been on a gradual decline and is now around 146 in social networking. We at TechCrunch have had so many anonymous tips alleging possible sales of Foursquare to that we have lost count. We are reporting this one in particular because a number of sources confirm what we’ve heard.

Yahoo, meanwhile, has been facing its own challenges. While it is flush with cash from its stake in China’s Alibaba, the company has been reorganizing its leadership, and has faced criticism for its product strategy being too focused on “incremental” iterations, despite the rush of acquisitions during Mayer’s tenure.

Search in focus

We also understand Yahoo has been trying to reinvent its search business with technology like deep linking on mobile, where mobile and web apps can essentially search and link to specific data in otherwise-siloed mobile apps.

Yahoo’s name has also been mentioned as a possible contender to take over Google’s position as the default search app for Apple’s Safari browser, following on from Yahoo nabbing the same deal with Mozilla for Firefox in the U.S.

Yahoo is also at a critical point in its search business in another regard: it has been in a 10-year search pact with Microsoft, where Microsoft controls the technology behind Yahoo search. That deal passed a five-year break point on February 23 of this year and the two, most recently, have extended negotiations by 60 days (i.e., the end of next week).

On top of this, last year Yahoo announced a deal with Yelp, one of Foursquare’s big competitors, to power listings reviews in its search results both on desktop and mobile.

Some speculated that this spelled the end of any possible data or other deals between Yahoo and Foursquare — although that may not be the case. It so happens that Yelp also powers local search reviews on Bing, owned by Foursquare licensee Microsoft.

So while there could be a scenario where all four companies — Microsoft, Yahoo, Yelp and Foursquare — actually worked together, if there is a break up, a Yahoo acquisition of Foursquare might be one way for Yahoo to bring a trove of local search and location data, and the technology to power them, in-house, along with a team to work on it. Or even with a new MSFT deal, having Foursquare could help differentiate Yahoo better from the other search engine.

In any case, an acquisition like Foursquare would be a bold move for a company that years ago developed a reputation for outsourcing as a core competency.

Foursquare could be a strong addition to Yahoo for other reasons, too.

In addition to bolstering Yahoo’s own efforts in rebuilding its search product, it would boost Yahoo’s overall mobile portfolio of apps and its own primary-source data in local listings.

Foursquare’s location database is also considered the cream of the crop. Other options like Facebook pale in comparison of accuracy and detail. Their location intelligence systems are also very advanced, and something that Crowley considers one of Foursquare’s quiet strengths. Foursquare is, in essence, a context company — not just a location company.

That extends also to the data Foursquare has already amassed over the last six years. The company says that to date there have been 7 billion check-ins, 70 million tips, 55 million people, 65 million places and 90 million “tastes” logged through its apps.

Together, that data and technology have helped the company build up its own commercial prospects. Just this week the company launched its newest solution, Pinpoint, a location-based advertising network that can target users by device, location and other parameters. Foursquare says Pinpoint is already being used by AT&T;, Samsung, FedEx, Land Rover and others.

It’s also snagged other interesting strategic relationships, such as its partnership to power location tagging for Tweets on Twitter, and that Microsoft licensing deal.

The fact that Foursquare’s location API is also in use by 85,000 developers of other apps would give Yahoo a major touchpoint with developers and publishers. That could complement its Flurry app analytics business and serve as a route to selling other products as well as integrating their other services.

And both Foursquare and Swarm, which are platforms for users to give feedback and interact with each other, would provide Yahoo one more boost in social alongside its Tumblr acquisition. In other words, it would have more critical mass in an area that has become fertile ground for brands looking for ways of connecting with users beyond static banners and more legacy media.


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10 things in tech you need to know today

Posted by Mike McCready | April 13th, 2015 | No responses – 

Good morning! It’s a pretty grey but warm start to the week in London. Here’s the tech news you need to know today.

1. Streaming service Spotify is close to raising $400 million (£548 million) in new funding, which would bring its valuation to $8.4 billion (£5.8 billion). The funding is expected to come from sources including Goldman Sachs and Abu Dhabi’s sovereign wealth fund.

2. Apple is in talks with Taylor Swift and Florence and the Machine about its new music streaming service. It wants artists to give it exclusive music that wouldn’t be available on other streaming sites.

3. Android creator Andy Rubin raised $242 million (£166 million) for his new venture fund. Rubin said when he left Google that he wanted to create an incubator for hardware startups.

4. Apple’s new MacBook went on sale on Friday and quickly sold out. The gold version seemed to be in the highest demand.

5. The Apple Watch also went on sale on Friday, and it too sold out. All models were gone in the US in just six hours.

6. Top Yahoo executive Mike Kerns has left the company. He was in charge of the site’s homepage.

7. Apple stock was downgraded by Raymond James. It was in reaction to poor reviews of the Apple Watch and seasonal slowdown of iPhone sales.

8. Donald Trump got in a Twitter fight with T-Mobile CEO John Legere. Legere said that he was checking out of the Trump hotel he was staying in.

9. Chinese phone manufacturer Xiaomi sold $335 million (£229 million) worth of phones in just 12 hours. The company held its “Mi Fan Festival,” which saw reduced prices for its phones.

10. Etsy is courting small investors for its IPO. It wants its shareholder base to share its values.


The music industry has a math problem

Posted by Mike McCready | April 12th, 2015 | 4 Responses – 

The standard music superstar critique of services like Pandora and Spotify (there have been a lot of them lately) goes something like this:

My song was played millions of times on [insert service here] and all I got was a lousy few dollars.

For specific examples see: Pharrell Williams, Aloe Blacc (the singer on Aviici’s “Wake Me Up,” the most streamed song on Spotify) and um, Bette Midler.

Taylor Swift didn’t get into this level of detail when she criticized (and then withdrew her back catalog from) Spotify last year. Neither did Jay Z when he launched his competitor to Spotify last month. But their concerns about streaming are broadly similar, and have fed into the narrative that digital music services are shortchanging artists by paying minuscule amounts in royalties for huge numbers of track spins.

These royalties often are contrasted with bigger payouts from old-fashioned broadcast radio. The problem is that this is a completely misleading comparison. And here is why:

A single stream of a song on Pandora or Spotify typically reaches an audience of one person. A single spin of a song on radio reaches an audience many times bigger than that, depending on the actual size of the station’s listenership.

This matters because the US government officials are currently considering sweeping changes to the system for music licensing in the US and, perhaps influenced by the rhetoric, they are expected to rule in favor of publishing companies and songwriters by changing arrangements that have been in place since the 1940s.

The fuzzy math was on display at a Senate hearing (video) in March, when the songwriter Lee Thomas Miller contrasted the payouts for a song that gets played 1 million times on radio (which he said was the “threshold” for a hit) with the smaller payout on songs streamed many multiple times of that online. Pandora’s vice president of business affairs, Christopher Harrison countered: “To reach a million people on, for example, Z100, the largest radio station in New York City, you would only have to play that song 16 times.”

David Oxenford, an copyright lawyer based in Washington, also wrote about the confusion in a blog post this week.

[E]quating a million spins on over-the-air radio to a million spins on an Internet-based digital music service is a meaningless comparison. To be equivalent, that million spins on over-the-air radio, when spread across stations around the country may mean that a billion impressions were made on people who heard the song played – the equivalent to a billion spins on a digital music service – a much rarer feat.

It’s a bit like what Steve Albini, the famous record producer, told Quartz last year: “I think there is incorrect calculus being done by the people who are upset” over streaming music services.


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Spotify nearing deal to raise $400M in round valuing the music-streaming service at $8.4B

Posted by Mike McCready | April 11th, 2015 | No responses

techmeme.comTop News

Technical findings on China’s Great Cannon and its similarities to the Great Firewall — China’s Great Cannon — This post describes our analysis of China’s “Great Cannon,” our term for an attack tool that we identify as separate from, but co-located with, the Great Firewall of China.

Mike Kerns, senior vice president of the Yahoo homepage, has resigned — One of the first execs Marissa Mayer really trusted at Yahoo just quit the company — Mike Kerns, the Yahoo senior vice president in charge of Yahoo’s homepage and other destinations, just quit the company, a source close to Kerns just told us.

— Spotify Nears Deal to Raise $400 Million at $8.4 Billion Valuation — Goldman Sachs and Abu Dhabi’s Sovereign Wealth Fund Have Invested — Spotify AB has headed back to the funding well for a seventh time …


Bono Reportedly Adds Special Advisor Role at New Venture Firm, May Sunset Elevation Partners

Posted by Mike McCready | April 11th, 2015 | 1 Response – 

As U2 gears up for the band’s upcoming arena tour, frontman Bono is said to be busy firming up his status as a venture capitalist. The New York Post is reporting the 54-year-old singer has become a special advisor to a new growth fund from mega-investment firm TPG Capital.

The new mystery fund from the company’s TPG Growth arm is currently near its target goal of raising $3 billion from investors, Post sources say. Previously, Bono invested a reported $3 million in TPG Growth’s car-pooling service Ride, and he sits on the board of Growth-owned Fender Musical Instruments. It also helps that Bono is friends with William E. McGlashan, Jr., TPG Growth’s founder and manager partner.

The Post also reports that there is now a “strong working relationship” between TPG and Sound Ventures, a new investment firm from actor Ashton Kutcher and U2 manager Guy Oseary.

Bono is co-founder and managing director of the San Francisco-based venture capital outfit Elevation Partners, which has a portfolio that includes Facebook, Forbes and Yelp, and previously sunk money into former mobile giant Palm. This new play is taken as a sign of the wind-down of Elevation Partners.


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6 Lessons Indie Labels & Musicians Have Learned About Streaming Music

Posted by Mike McCready | April 10th, 2015 | No responses – 

With tighter budgets and thinner margins, the loss of revenue as music consumption shifts online is particularly concerning for independent artists and labels. But they’re quickly learning to adapt.

Organized by UK music trade organization AIM, the recent Music Connected conference brought together record labels, distributors and music marketers. Here are some key takeaways, as reported by Stuart Dredge in The Guardian:

1. Indies are worried streaming revenue, but making the best of it.

“Technology is what’s moved people away from owning and into as easy access to music as possible. You can’t fight technology, we just have to find as many ways of getting people onto that boat as possible.” – Nicolas Rizzi of The Orchard.

2. Indies can beat the Majors online

“As indies we over-index on streaming, and within streaming we over-index on premium, because the type of music we’re releasing will appeal to early adopters. – Gerald Youna of Beggars Group.

3. There’s concern about Soundcloud

“If you’re a brand new band with no fans yet, and you start promoting on SoundCloud it’s going to be very hard to migrate those fans over to Spotify and the other licensed services.” – Gerald Youna of Beggars Group

4. Despite low payouts YouTube still gets a thumbs up

“It’s more of a help than any kind of hindrance. We’re exposed to far more audience than we would be on any other platform. It’s the largest streaming music service in the world, so it’s obviously a help.” – Leon Grant Bussinger of Warp Records

5. Beware of Playlist Payola

“We’ve been asked for money. They seem to think that they can make money from it. It seems clear to me that someone’s been paying them money, otherwise they wouldn’t be so confident that they can charge… It’s not a surprise. Clearly payola worked well in American radio, so why wouldn’t it work well on Spotify?” – Will Cooper of PIAS

6. Email lists matter

“Every time we work with clients who have large email lists, you can see that they drive a hell of a lot of sales,” – Darren Hemmings of Motive Unknown.


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Executive Turntable: Shakeups at Big Machine, Matador Gets New Publicity Head and More Industry Moves

Posted by Mike McCready | April 10th, 2015 | No responses – 

Moves at ASCAP, Big Machine Label Group, the Windish Agency, and more…

A list of moves and shakes across the music business, including ASCAP, Big Machine Label Group, the Windish Agency, Rdio, BAM, and more.

— eOne Music promoted Phil Thornton to vp and general manager of urban inspirational, rising from his role as vp of marketing & brand management.

— Page Jeter joined the brand communications team at PMK*BNC, arriving from Rogers & Cowan, where she served as group manager.

— ASCAP appointed Alice Kim executive vp, chief strategy and development officer. Previously, Kim served as founder and principal of DigiConsult and senior vp of Qualcomm startup division MediaFlo, as well as senior vp of distribution and partnerships for Viacom Media Networks.

— Former UTA music head Rob Prinz, who established the company’s music department in 2001, joined ICM as a partner. Veteran concerts agent Nikki Wheeler also made the jump from UTA to ICM, with the duo set to bring a roster that includes Celine Dion, Hall & Oates, John Hiatt, Bob Seger & the Silver Bullet Band, Jerry Seinfeld, Rick Springfield and more.

— Rdio appointed Iain Morris vp of global music publishing, joining their recently expanded team in London. Prior to joining Rdio, Morris served as head of digital, EMEA at Warner/Chappell Music Publishing.

— Big Machine Label Group elevated Jake Basden to vp of publicity and corporate communications.

— Big Machine Label Group vp finance Brad Kash exited the company to form 7th Wave Entertainment Group. The new firm will focus on business management, royalty processing, audit support and consulting services.

— Rajat Kakar was elevated to managing director of Sony DADC India. Kakar previously served as the business head for its licensee business.

— Brandon R. Frankel was promoted to vp marketing, branding & partnerships at the Windish Agency.

— Cumulus Media, Inc. appointed longtime Albuquerque country radio morning show host Tony Lynn to Cumulus’ 96.3 NASH Icon for afternoons.

— The Brooklyn Academy of Music named Katy Clark president, succeeding Karen Brooks Hopkins, who will step down at the end of June. Clark comes to BAM from New York’s Orchestra of St. Luke’s, where she has served as president and executive director since 2010.

— Shira Knishkowy, formerly of Partisan Records, was named director of publicity at Matador Records.

— Verge Campus Media acquired GoodMusicAllDay, LLC, with plans to operate as a standalone platform with GoodMusicAllDay’s Tim Weber continuing to lead the company as CEO and Verge Campus Media co-founder/president Maxwell Zotz to serve as GoodMusicAllDay’s president.

Originally published at – 


Darius Rucker Eyeing Rap Collab…And a Hootie Reunion

Posted by Mike McCready | April 8th, 2015 | No responses

billboard.comThe Hootie & the Blowfish frontman-turned-country singer says he’s hoping to jump on a song with a rapper. “I don’t have much left on my bucket list. One of the things that I’m dying to do is to sing the hook on a big rap song,” Rucker said in a recent interview. “No one’s ever called me to do that.”

Rucker said he wants to collaborate with hip-hop heavyweights like Jay Z, Eminem and Snoop Dogg.

“Somebody that’s had a career; I get where they’re coming from, they get where I’m coming from,” said Rucker, 48.