Music-tech funding down 60% in 2020
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View this email in your browser (|ARCHIVE|) http://hotpodnews.com/presents.... The fine print of innovation in the music business. This is issue #90, published on July 21, 2020. Hello! This newsletter is not written by GPT-3 (https://www.technologyreview.com/2020/07/20/1005454/openai-machine-learning-language-generator-gpt-3-nlp/) .
Some notes and announcements before sharing the latest stories:
👉 Today’s issue features the first Water & Music guest post from Julie Knibbe, a music-data expert and former product executive at Deezer and Soundcharts. Scroll down to the section “How music pros use data to pitch artists” for a preview. And I am welcoming article pitches on a rolling basis via this form (https://docs.google.com/forms/d/e/1FAIpQLScBAeAi4nBjBSHscygIld-2jiuBLcXmgHAcJskWXp5B6ZXzGA/viewform) .
👉 Tomorrow (Wednesday) at 8PM ET, I’ll be speaking on Women In Music’s panel “Faces We Don’t See. Highlighting Asian American & Pacific Islanders in Music,” alongside a group of amazing AAPI women in the music industry. This conversation should be really good and eye-opening for everyone. You can register for the panel free of charge by clicking here (https://us02web.zoom.us/webinar/register/WN_lxIcnlc2QHmTDf61h5i5CQ) .
👉 I recently did an AMA about all things music and tech on Music Tectonics’ new community app. This was my first experience with the AMA format from the perspective of answering questions, and I liked it a lot! You can read the AMA here (https://app.musictectonics.com/posts/420) .
👉 Water & Music now has its own Twitter account (https://twitter.com/water_and_music) ! If you’re on Twitter, you can follow there for updates on articles as they are published.
As always, thanks for reading :)
- Cherie Music-tech funding down 60% in 2020 In some ways, now is a good time to start a music-tech company. After all, in a world without touring, technology and the Internet are practically all that artists and music-industry professionals have to work with if they want to continue engaging with their fans and building their businesses.
But in another, important way — namely, getting money to make sure you can exist in the first place — running a music startup is harder than ever.
According to my own research, coupled with publicly available data from Crunchbase, around 60 music-tech startups raised under $300 million in total funding in the first half of 2020. Compared to the first six months of 2019, that’s a 40% dip in the number of music-tech startups funded, and at least a 60% dip in the amount of capital raised.
This decline in music-tech capital is much steeper than what the overall venture-capital sector is seeing. For comparison, VC deal flow in H1 2020 across North America, Asia and Europe was down by around 16% year-over-year, according to PwC and CB Insights (https://www.cbinsights.com/research/report/venture-capital-q2-2020/) . This implies that compared to VC/tech as a whole, music-tech has taken over 2.5x the average hit on the number of startups funded.
For an industry that needs new technological solutions more than ever, this is not a good sign. [Read more. (https://www.patreon.com/posts/39357932) ] Superfan experiences reinvented — and repriced — for a digital world Seeking to make up for lost touring income and diversify their online presence, artists are leaning on an increasingly crowded landscape of tech tools to offer new digital experiences for their superfans.
In-person VIP meet-and-greets have largely suffered the same fate as concerts and tours, with the likes of KISS, Eric Nam and Niall Horan either cancelling their meet-and-greet events early on or issuing a strict “no-touching” policy. To maintain the health, safety and security of everyone involved while opening up access to a global audience, more and more artists are opting to connect with their superfans remotely instead.
The landscape of platforms to get this job done is more fragmented than ever, including Cameo, Looped, QJAM, Chatalyze, Topeka, Fundo, Superpeer, Starsona, Jemi and much more. Given the ongoing uncertainty around the future of live events, artists will only be leaning further into these superfan engagement tools in the coming months.
In my mind, this has two major implications for artists’ careers: 1) Superfan experiences will become a year-round rather than cyclical revenue stream, and 2) as a result, artists will have to reckon with their own digital value. [Read more. (https://www.patreon.com/posts/superfan-and-for-39553319) ] How music pros use data to pitch artists Everyone remembers a good story. The power of a good story to move us and change our attitudes and behaviors has neurological underpinnings (https://hbr.org/2014/10/why-your-brain-loves-good-storytelling) , and highly strategic implications (https://hbr.org/2014/07/how-to-tell-a-great-story) for all kinds of businesses. Especially in the music industry, where even the mere perception of growth and momentum has its own multiplier effects, storytelling is often cited as the number one skill to improve and master in one’s career. The lower the barrier to entry in the music industry gets, the more important storytelling becomes in rising above the subsequent noise.
In 2020, what kinds of artistic stories really resonate — and what role does data really play? As many people have argued in the past, talent alone is no longer enough (or even a prerequisite at all) to succeed in music. In the words (https://soundcharts.com/customer-stories/dmusicmarketing#dmusicmarketing_title) of Adel Hattem, founder of D Music Marketing (https://www.dmusicmarketing.com/) : “People don’t want to hear ‘Oh ye, that’s a great act’ anymore — they want to see the numbers.”
But good numbers alone are not enough, either. Cognitive psychology research has shown (https://www.hup.harvard.edu/catalog.php?isbn=9780674003668) that a fact becomes 22 times more memorable when it is wrapped in a story. In order to build a compelling case around an artist, you can’t just have good music and promising business figures — you need a story to tie it all together. [Read more. (https://www.patreon.com/posts/how-music-use-to-39177920) ] New: The Water & Music Archives 💧 For those of you who have been following my writing for a while, you may remember that I used to host my newsletter on Revue (https://www.getrevue.co/) . Now that Mailchimp and Patreon are the primary entry points for my newsletter, I’ve decided to delete my old Revue page permanently from the Internet.
But that doesn’t mean all my old writing is gone. Instead, I’ve decided to compile over 20 of my best original essays from that period (Nov. 2016 – Apr. 2019) into a 70-page PDF eBook called The Water & Music Archives (https://gumroad.com/l/waterandmusicarchives) .
These essays — spanning a wide range of music-tech topics including smart speakers, streaming playlists, creative A.I., Twitter fandoms, micropayments and much more — are not available anywhere else on the Internet.
You can access the Water & Music Archives on Gumroad (https://gumroad.com/l/waterandmusicarchives) for just $5. As an alternative, if you join the Water & Music Patreon membership (patreon.com/waterandmusic) , you will get a discount code to download the PDF eBook for free. All proceeds from sales of the eBook will be invested directly back into Water & Music’s operations as an independent newsletter, research hub and community. Good reads from the web 📖
On music and media business moves: * Time to stop playing the velocity game (https://www.midiaresearch.com/blog/time-to-stop-playing-the-velocity-game) (Mark Mulligan) * The mobilizing power of the BTS Army (https://graphics.reuters.com/GLOBAL-RACE/BTS-FANS/nmopajgmxva/index.html) (Reuters Graphics) * “Accessing publishing money in China is incredibly complex. This is the beginning of a marathon, not a gold rush.” (https://www.musicbusinessworldwide.com/accessing-publishing-money-in-china-is-incredibly-complex-this-is-the-beginning-of-a-marathon-not-a-gold-rush/) (Music Business Worldwide) * What Will It Take for Spotify’s Joe Rogan Deal to Pay Off? (https://www.billboard.com/amp/articles/business/streaming/9420215/spotify-licensing-deal-joe-rogan-benefits-will-it-pay-off) (Billboard) * The biggest media and technology companies are having an identity crisis (https://www.cnbc.com/2020/07/11/media-and-technology-companies-are-having-an-identity-crisis.html) (CNBC)
On systemic racism and sexism against Black artists, executives and fans in music and media: * A letter to Resident Advisor and the rest of the UK press (http://itsrosh.nfshost.com/letter/) (Roshan Chauhan) * “She must’ve slept with label executives” and other lies: why women in hip-hop deserve more respect (https://gal-dem.com/women-in-hip-hop-deserve-more-respect-she-mustve-slept-with-label-executives-and-other-lies-why/) (gal-dem) * For Black Women In Media, A “Dream Job” Is A Myth (https://www.refinery29.com/en-ca/2020/07/9878117/systemic-racism-canadian-media) (Refinery29) * Black influencers are underpaid, and a new Instagram account is proving it (https://www.theverge.com/21324116/instagram-influencer-pay-gap-account-expose) (The Verge) * Who Belongs Here? The Complicated Position of Rock Fans of Color and The #BLM Movement (https://www.pastemagazine.com/music/black-lives-matter/rock-fans-of-color-experiences-arctic-monkeys/) (Paste)
On online communities, digital identities and remote work: * How to Report on Internet Culture and the Teens Who Rule It (https://www.nytimes.com/2020/07/16/style/taylor-lorenz-internet-culture-reporting.html) (The New York Times) * Come for the Network, Pay for the Tool (https://subpixel.space/entries/come-for-the-network-pay-for-the-tool/) (Toby Shorin) * The Escalating War Between Our Physical and Digital Realities (https://www.theinformation.com/articles/the-escalating-war-between-our-physical-and-digital-realities) (The Information) * Figuring out your membership tech stack: a comprehensive guide (https://trypico.com/thebyline/launch/figuring-out-your-membership-tech-stack-a-comprehensive-guide) (Pico) * Craft is Culture (https://alexdanco.com/2020/06/26/craft-is-culture/) (Alex Danco)
What I’m listening to 🎧 Here are some albums I bought on the last Bandcamp Friday: * Kaelin Ellis — MOMENTS (https://kaelinellis.bandcamp.com/album/moments) * Space Africa — hybtwibt? (https://space-afrika.bandcamp.com/album/hybtwibt) * Discwoman — Physically Sick 3 (https://physicallysick3.bandcamp.com/)
Other cool albums: * J Lloyd — Kosmos (https://open.spotify.com/album/47WMGg3UQBQAGn8cVnPdiW?si=vpgcsBkAT7a6mluNSfNwqg) * UMI — Introspection (https://open.spotify.com/album/6jI8YPlDzzuckCKU2DKPyy?si=yV0a2-TaTQKcZJtUuHee-w) * Lianne La Havas — Lianne La Havas (https://open.spotify.com/album/6JwtB0zzNYy4qANDrJtrJy?si=QuaDJRnxQKOpbUoI2ih-0Q) * Adrianne Younge & Ali Shaheed Muhammad — Jazz Is Dead 001 (https://open.spotify.com/album/02KoSNAnxGaOMXXRS16cZJ?si=u8K6jbJJRwOkajOv1Wim1w)
If you’d like to support even more thoughts and conversations on music and tech, I encourage you to become a paying member of the Water & Music community on Patreon (http://patreon.com/cheriehu?utm_campaign=Water%20%26%20Music&utm_medium=email&utm_source=Revue%20newsletter) .
For as little as $3/month or as much as $200+/month, you can access a wide range of perks including: * A closed, members-only Discord server, consisting of regular conversations on the most important music and tech news * Exclusive essays and article previews * Updates on my book research * Monthly video hangouts with me
…and much more! Thanks so much for reading! ❤️
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