The startups making noise in music tech

Amazon has unleashed its latest step toward taking over, well, pretty much everything.

The world’s largest online retailer launched a US campaign to promote its music streaming service last week. Amazon Music was able to double its number of hours streamed over six months, but the giant still falls behind Spotify and Apple Music when it comes to the number of subscribers and control in key markets.

To catch up, Amazon is hedging a bet based on its users: Many listen to music on speakers, like Alexa. That means Amazon can negotiate with labels to offer deals like speaker-only song streaming, bringing the same music to customers at a lower cost than on some other platforms.

“Labels are now looking to Amazon, as well as YouTube and Pandora Media, to counter Apple and Spotify,” shares a recent Bloomberg report. “If new players can sign enough customers, the two leaders will lose leverage in rights negotiations.”

Amazon’s success could make space for other types of competition, too. Startups with unique business models—like those that don’t hinge on collecting song and sound copyrights, but rather do support the artists who hold them—could stand to benefit as the music industry evolves. So could artists, who have a growing number of options beyond traditional publishers and labels.

New York-based music startup Kobalt is one example where copyrights aren’t king. Its publishing service offers flexible contracts to songwriters, supports them in pitching songs to artists, and provides a tech platform to help them track sales, downloads and other metrics. That means songwriters have a better sense of what they’re earning from distributors like Spotify, a faster method of getting paid the money they’re owed, and an agreement that guarantees they keep 100% of the rights to their work. Kobalt’s publishing roster includes artists like Zayn and Childish Gambino, and since its founding in 2000, the company has raised over $200 million.

But publishing services aren’t Kobalt’s only area of innovation. After a 2012 acquisition of AWAL, a digital distribution platform, Kobalt launched its own record label services division to support independent talent. In March it invested $150 million to expand AWAL’s staff and introduce more transparent technology, helping its artists monitor royalty income by track, streaming service, country, and more. Four months later it landed a worldwide recording deal with deadmau5.

While Kobalt and other music-tech companies may not (yet) be counted among the labels, publishers or distributors that are deemed industry giants, mounting competition at the top means there will be more room for innovative companies to rise. Artists—and fans—around the world are listening.

Other Startups Making Noise In Music

Audius is on a mission to create a fully decentralized community of artists, developers, and listeners to share and defend the world’s music. The company came out of stealth earlier this month and raised a $5.5 million Series A from General Catalyst, Lightspeed and others. Cofounded by a Sri Lankan DJ and entrepreneur, Audius aims to make it easier for creators to record their work and register assets.

Roli is focused on extending the joy of music creation to everyone. Its system lets anyone shape music through easy-to-learn gestures on its connected devices. The award-winning instruments—adopted by artists like Stevie Wonder and Meghan Trainor—are an evolution of the piano keyboard that expand opportunities for musical expression.

Steereo is a hyper-local music marketing and analytics platform. Its plan? Incentivize rideshare drivers to play music from emerging and independent artists, rather than more mainstream options, while they drive. For artists, this means valuable insights like whether riders listened to or skipped a song, how many times it has been played and more.

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