The Music Business Is More Innovative Than You Think

While some may believe that the music industry has lost it's ability to innovate, the reality is something very different, and as music and tech continue to grow and develop together, new concepts and ideas continue to propel the industry forward.

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The music business should be prouder of its pioneering spirit, argues Yvan Boudillet, TheLynk's founder and former head of digital at EMI and Warner Music France on the Midem blog.

Midemlab has turned 10. Time flies. The solutions and visions carried by startups are no longer just a source of curiosity, but a serious matter for music professionals and artists themselves. We’re even told that developers are the new rockstars. Does this mean the music industry has lost its capacity to innovate? Au contraire!

Technology has been part of music’s DNA since the advent of recorded music and radio broadcasting in the early 20th century. EMI, after all, stands for Electronic & Musical Industries. What this means is that engineering and artistic expertise have always been working in the same direction.

With the arrival of the mp3, the music industry experienced before any other the harsh reality of global disruption of its business model, led by web-based and user-centric platforms. From that time, the music market became both a living laboratory and a paradox. The more music drove adoption of digital new standards from social media (initially, MySpace) to video (YouTube) and the access model (Deezer / Spotify), the more it generated tension around value.

However, with the recent rise of streaming, the music industry has progressively increased its efforts to connect, collaborate or ultimately co-create with startups.

One the best examples of this approach was the OpenEMI initiative, launched in 2011 by EMI Music and The EchoNest, aiming to give developers a one-stop destination to create innovative digital products for EMI’s artists. Working at EMI, I had the chance to participate in the programme. I felt that the real change was not coming from the technology itself, but from the shift of thinking in bringing creative people together, and breaking legal & technical bottlenecks.

More recently, in October 2015, Abbey Road Studios launched Abbey Road Red, an incubator — and Midemlab partner — designed to support entrepreneurs, researchers and developers of music tech. Backed by the studio’s owner, Universal Music Group, this initiative, unique in Europe, demonstrates how majors are now exploring new way to source technologies that could benefit their artists, while helping startups to grow. It also represents a strategic investment, since startups joining the programme are asked an % equity stake and options in future rounds. Good deal!

How does Tech & Music’s complex relationship continue today?

Artists like Snoop Dogg, MC Hammer, Justin Timberlake or Lady Gaga are global hitmakers; but they are also known for being investors in startups. The most spectacular involvement of influential artists in a music tech venture was, of course, led by Jay-Z, building the first ever “artist-owned coalition”, with TIDAL. Time will tell if such an alliance turns to be successful.

Then Troy Carter, Gaga’s former manager, joined Spotify, showing that platforms and pure players from the tech side are looking for artistic and talent management expertise as they grow up. Just one of the many ways R&D is meeting A&R today.

If artists enter the disruption game as entrepreneurs, and music veterans get to work for tech companies, what is the role of music labels in terms of innovation within such a constantly moving ecosystem?

Well, labels’ investments are naturally focused on A&R and marketing. But music professionals are pretty discreet when it comes to talking about their innovations in terms of Social Media, Influencer Marketing, Fan Engagement, Brand Content, Native Ads… despite the fact they’re embracing cutting-edge marketing techniques before many other brands have.

Data is also at the core of innovative approaches for various kind of players in the industry, from indies to majors. 300, led by Lyor Cohen – before his recent move to YouTube – was ahead of the curve in using data to spot emerging acts. R&D becomes a source of inspiration, or at least a tool for, A&R.

Another interesting example of the intersection of data and A&R is the launch of Spinnup, by Universal, as an alternative distribution channel for unsigned artists. Why is a major offering an open platform to developing artists? Because it’s a smart way to crowdsource talent and to incubate projects, while monitoring every metric captured globally on Spotify, Deezer, YouTube, Apple Music etc… so that A&R can be notified when a track or an artist stands out from the crowd. Not enough for an artist to build a career upon, perhaps; but still a positive use of tech, combined with A&R intuition and expertise.

Beyond distribution & data, the next chapter will be about experience. So it’s fitting that the music industry is already developing partnerships with startups involved in such groundbreaking tech as VR, AR, AI and bots. VR is a particularly hot topic right now, as confirmed by Universal Music announcing a VR collaboration with iHeartRadio, a few months before Warner Music announced their own strategic alliance with MelodyVR.

So, will the music industry get back to the future in 2017?

Midem 2017 will surely be marked by a strong resonance of topics at the crossroads of A&R and tech. From curation to blockchain, the challenges ahead require to be addressed as a global ecosystem. Initiatives like TechStars Music and the Open Music Initiative are some real positive signals of a shift in the way the Industry is projecting itself.

What the industry needs to bear in mind to sustain this positive movement:

Curiosity – Tech Culture, Understanding of Music Value Chain for Startups
Transparency – Data, Intelligence, Trust & collaboration of industry level initiatives
Risk Management – Music companies know how to bet on talents. By sharing risk with startups, they may get some equity, and share opportunities to leverage artists’ reach, and monetisation outputs
Creativity – Entrepreneurs from Tech & Artistic background have this in common. Innovation as a way to change the world.

If we consider that Innovation is about capturing creative & ground breaking vision and give life to it, influencing new trends and taking risk, then A&R meets R&D.

By understanding this capacity to embrace Innovation with no fear, Open Innovation and co-creation should mean something real and valuable for both the creative & tech sectors.

Music drives adoption and engagement for new technologies.

Technology allows for new way to create, connect with fans and monetise.

To conclude, let’s just remember Les Baxter‘s wise words: “Any Good Music must be an Innovation.”