The music industry’s centre of gravity is shifting

Regular readers will know that MIDiA has been analysing the creator tool space for some time now and building the case for why the changes that are taking place will be transformational not just for the creator tools space itself but for the music business as a whole. In fact, we believe that the coming creator tools revolution could be at least as impactful on the wider music business as streaming was. Firstly, it establishes a new top-of-funnel that sits above distribution companies, meaning that creator tools companies are now able to fish upstream of labels for the best new talent. Secondly, audio will become the next tool with which consumers identify themselves, following the lead of images (Instagram) and video (TikTok). But there is another factor too: the fast-growing volume of institutional investment is changing where the centrifugal forces of the music industry reside.

Outside of the currently crippled live business, the record labels used to be the undisputed central force of the music business. Then streaming services grew in scale and attracted the first wave of inward investment into the industry. Alongside labels, streaming services became the joint central force of the music business, around which all else orbited. Big investors started to make bets on either side of a binary equation: rights or distribution.

The publishing renaissance

Then music publishers and publishing catalogues started to attract investment. At the time, the only real place big institutional investors could place their bets on the rights side of the equation was Vivendi – and even then, it was an indirect bet as UMG was just one part of Vivendi. SME is just too small a part of Sony Corporation for the parent company to be a viable music industry bet. Since then, UMG divested 20% of its equity and is on path towards an IPO; WMG went public and Believe is on track to an IPO also. 

When growth isn’t growth

Investors may be given pause for thought by the way in which leading music industry trade associations such as ARIA in Australia and Promusicae in Spain have restated their 2019 figures, having the effect of making what would otherwise be declines in 2020 instead look like growth. Take a look at Australia (2019 total revenues AUD 555 million here versus 2019 total revenues AUD 505 million here) and Spain (2019 subscriptions €159 million here versus 2019 subscriptions €138 million here).

Publishing catalogues by contrast look more predictable, with performance still largely shaped by non-recorded music market trends, including radio and public performance – though COVID-19 threw a lot of that stability down the toilet. Music publishers used the inward investment to diversify their businesses. Kobalt pushed into artist distribution (recently sold to Sony), neighbouring rights and a PRO; Downtown pushed hard into the independent creator sector (CD Baby, Songtrust); while Reservoir is going public with a Spac merger; and then of course there is Hipgnosis.

The creator tools gold rush

With music publishing catalogue valuations over-heating, big investors started looking for places where they could still play in the music market but get better value for money. Enter stage left creator tools. Key moves include Francisco Partners’ moves for Native Instruments and Izotope; Summit Partners’ investment in Output; and Goldman Sachs’ investment in Splice. 

What this means is that the music industry now has an additional gravitational force at its core. Just as music publishers and streaming services used their newfound investment to push into other parts of the music and audio businesses, expect creator tools companies to do the same. With hundreds of millions of dollars pouring into creator tools (and lots more set to follow), investors are making big bets on audio in a broader sense, with bold ambitions that will not be sated by staying in the creator tools lane as it is currently defined. Avid’s recent move into distribution follows on from LANDR’s similar move, and of course Bandlab has 30 million ‘users’. Adding label-like services (e.g. marketing, debt financing) and streaming functionality are logical next steps for creator tools companies.

Streaming may be the change agent that has enabled all of these shifts – but streaming is the start of the story, not the end point. The process of music business diversification is only just beginning and the next chapter may be the most exciting yet.

Creator tools: The music industry’s new top of funnel

For most of 2020, MIDiA has been working on a major piece of work around the fast-growing creator tools space. The themes we had already started working on became rocket propelled with the onset of the pandemic, with an unprecedented volume of artists starting to engage with music production tools, services and hardware. Even before COVID-19, the creator tools space was set to transform the entire music business; now that future has become the present. This landmark report ‘Creator Tools – The Music Industry’s New Top of Funnel’ is immediately available to MIDiA Research clients here (more details of the report can be found at the bottom of this post).

Music production used to be a siloed segment of the music industry that revolved around studios, hardware and packaged software – at best a cost centre for labels. Now that is all changing. A new wave of creator tools companies are meeting the needs of a new generation of artists with innovative and intuitive music production solutions. Adding to an already vibrant marketplace, this new breed of production tools and services, often subscription-based, are reinventing the creative process and will reshape the long-term view of what a music company is. 

This is set to be the most dramatic product strategy shift the music industry has experienced in decades catalysed by the COVID-19 pandemic. 68% of independent artists reported making more music and 36% doing more online collaborations during lockdowns.

There are 14.6 million digital music creators globally, of which 4.7 million are self-releasing ‘artists direct’, up 31% from 3.6 million in 2019.

The emergence of a subscription economy

In the same year, music software, sounds and services generated $884 million, with plugins and VSTs the largest single segment at 43%. Building on this ‘COVID bounce’ total revenues will reach $1.86 billion by 2027. Though music software is the most widely-adopted creator tools category among independent artists, sounds and services will be the two largest drivers of future growth. 

Subscriptions models will also be key, with new models, more self-sufficient tools and the rise of SAAS services making the market majority subscription by 2026, with subscription services reaching $870 million by 2027, up 477% from $151 million in 2019. The shift from software sales to SAAS models means these companies are collecting crucial creator data before they even get to the distribution or release stage, giving these companies the ability to identify the likely hits before they even get into streaming services. This is the music industry’s new top of funnel. Meanwhile at the other end of the funnel, Apple (Garage Band, Logic) and Spotify (SoundBetter, Soundtrap) are well placed to push up the funnel, with the foundations of what tomorrow’s record label will be. Sony Music’s move to invest in creation app Tully is the start of what will rapidly become a creator tools arms race. Expect Splice and LANDR to become sought after by both labels and streaming services. 

Creative feedback loops

The new breed of creator tools is also fostering creative feedback loops between other creators and in some cases with audiences—a dynamic MIDiA expects to become a mainstay of the future production landscape as digitally-native Gen Z and younger millennials mature in their production capabilities. The creator tools that build around such creative feedback loops will be those that resonate most with the young generation who will be the creators and fans of tomorrow’s music business. 

Snap’s acquisition of collaboration app Voisey illustrates how this is so much more than just a music tech play. We are on the cusp of a consumer revolution also. Just like TikTok made amateur video making a mainstream consumer activity as Instagram did photography, so this new generation of apps and games are aiming to do the same with music. Warner Music’s Tones and I making a soundpack available for fans to create music with inside Roblox’s Splash is an early indication of how music making is about to go mainstream.

Just as samplers and DAWs transformed music making, so this new approach to production will change the future of how music is made and in turn, how it sounds. Music production product strategy is at a pivot point, where a new breed of user experience-led propositions will rise to prominence. The smart services that have already empowered their users to go from zero to 100 more quickly than ever before, will grow their offerings in line with their user base’s growing capabilities. The business of music has always shaped the culture of music, but perhaps never more so than how the creator tools revolution will reshape the future of what it means to be a fan, an artist and a music company.

If you are not yet a MIDiA client and would like to learn more about how to get access to the ‘Creator Tools – The Music Industry’s New Top of Funnel’ then email stephen@midiaresearch.com

Report details

Pages: 48

Figures: 15

Words: 7,500

Vendor profiles: 12

Products tracked: c.2,000

Excel includes:

Music Software, Sounds and Services Revenue

Creator Tools Value Chain

Software Tracker Summary

Software Tracker – Plugins

Software Tracker – VSTs

Software Tracker DAWs

Software Tracker – Rent-to-own

Software Tracker – Platforms

Software Tracker – DJ Tools

Creator Tools Company Directory

Methodology Statement

How Soundcloud Could Transform Deezer’s Market Narrative

News has emerged of Deezer being a potential buyer of troubled Soundcloud. This follows on from Spotify’s prolonged but ultimately abortive courting last year. Soundcloud was once a streaming powerhouse, with 175 million Monthly Active Users reported in October 2014. Though that number is still widely cited whenever Soundcloud is mentioned in the media, in truth its user base is now much smaller. Spotify, which now has around 150 million MAUs has a Weekly Active User penetration rate of 16% while Soundcloud’s WAU rate is just 6%. With the caveat that multiple additional variables impact WAU vs MAU rates, this would imply that Soundcloud’s MAU number is now closer to 70 million. Despite this shift in its public narrative, Soundcloud remains a uniquely valuable asset in the streaming landscape, one that would give another streaming service a distinct competitive advantage. Here’s why.

A Streaming Service Unlike Any Other (Except YouTube That Is)

Soundcloud first rose to prominence as a platform for artists before it rocketed into the stratosphere as a consumer destination with its new VC-powered mission statement ‘to be the YouTube of audio’. The legacy of its unique starting point is that Soundcloud:

• Has a catalogue unlike any other streaming service, except YouTube (and to a lesser extent, Mixcloud)
• Gives artists a direct connection with fans unlike standard streaming services
• Gives up and coming artists a global platform for reaching fans with no intermediary

That unique combination of assets makes Soundcloud a highly valuable commodity despite its diminished user base and similarly reduced valuation (now said to be around $250 million from a high of $1 billion). Soundcloud has two crucial attributes that will enrich any streaming service:

• A service tailor-made for Gen Z (ie those consumers currently aged 19 or under)
• A crowd sourced platform for artist discovery

Soundcloud Is Built For The Era Of Mass Customization

As DJ Spooky put it:

“Artists no longer work in the bub­ble of a record­ing stu­dio. The stu­dio is the net­work.” … “The 20th cen­tury was the era of mass pro­duc­tion. The 21st cen­tury is the era of mass cus­tomiza­tion…”

Artist creativity is no longer a creative full stop, we are now in a phase of Agile Music. Even though the number of people that upload music is small (7% of consumers upload music to Soundcloud or YouTube, of which half upload their own music) their impact on the broader market is multiplied many times over as they provide the music others listen to. But even more importantly, the blurring of the line between audience and creator is the fuel in the engine of Gen Z experiences such as Snapchat and Instagram. Other than lip syncing apps like Musical.ly and Dubsmash, Soundcloud and YouTube are pretty much all the music business has in this space. That, coupled with a highly shareable, highly social UI makes Soundcloud tailor-made for Gen Z. The importance to the segment is clear: among 16-19 year olds, Soundcloud penetration is higher than Apple Music, Amazon Prime Music, Tidal and Deezer, with only Spotify boasting higher penetration for audio services.

Crowd Sourced Discovery

The other key asset Soundcloud brings is the bridge it provides between fans and artists. A host of diverse services like Tunecore, BandLab, Bandcamp and Reverb Nation provide an unprecedented range of tools to up-and-coming artists. But Soundcloud (along with YouTube) is still the only place where artists can reach such a large audience directly, without an intermediary. Layer on its massively social functionality and discovery algorithms and you have an unrivalled audio platform for new artist discovery.

Soundcloud Needs An Ecosystem

Unfortunately for Soundcloud, it has found it impossible to effectively monetize these assets (and aping Spotify’s freemium model has done little to move the dial). What Soundcloud needs is an ecosystem into which it can slot, bringing all of the great functionality but relying on another part of the ecosystem to do the monetization. Slotting Soundcloud into Deezer, Spotify or even Apple Music would create an entirely new layer in each of those propositions and would massively enhance market positioning.

It would also enable the service to start behaving more like a label, identifying and testing artists before moving them up into the main service. If done by Spotify or Apple Music, this would look highly disruptive to labels as it really would be a precursor to becoming a next-gen label. But for Deezer, the story is a little different. As part of the Access Industry potfolio, Deezer sits alongside talent management agency First Access Entertainment, live discovery platform Songkick and, last but most certainly not least, Warner Music. By acquiring Soundcloud, Access Industries would be rounding out the most complete Full Stack Music Company in the business.

YouTube Is Not For Sale But Soundcloud Is

YouTube might do most of what Soundcloud does, and at much larger scale, but Soundcloud is up for sale and YouTube is not. Right now, Soundcloud represents the best opportunity in the marketplace for an audio streaming service to make up the ground in user experience innovation that the streaming market lost over the last few years in comparison to Gen Z apps. And with Deezer at the front of the queue, the French streaming service could be about to transform its market narrative in an instant.

 

Welcome To The Post-DIY Era

I recently took part in the True Music Forum in Madrid, an event organized by Boiler Room. I was on a panel that explored whether DIY is now coming of age with a host of high profile artists, most of them urban artists, bypassing or twisting the traditional label model and still achieving stand-out success. On the surface, these look like golden years for DIY, and in many ways they are, but much of what is happening at the top end of the scale has little to do with DIY. Streaming is transforming how artists view recorded music income and is making it possible for artists to pick and choose what label capabilities they want. But more often than not, it is a variation of the label model that succeeds rather than a replacement of it. This is the start of the post-DIY movement.

The First Wave Of DIY

Firstly, to be clear, DIY is alive and well, better than it has ever been in fact. With labels increasingly only signing artists once they have seen them build up following and ‘a story’, it is becoming increasingly common for artists to spend the formative stages of their careers ‘DIY’, releasing their own music, managing their social campaigns, making their own videos, booking their own tours etc. Added to that, the combination of streaming, direct-to-fan platforms and social apps have combined to make it possible to build niche audiences on a global scale. So it is now possible for a new tier of artists to exist, a tier of artists that may never dent the charts (for whatever they may be worth these days) but that can build solid, sustainable careers by engaging their fans directly. Stalwarts like Bandcamp and CD Baby have never had it so good, while a whole crop of new entrants, such as the much hyped BandLab is emerging to drive the market forward. And of course, Soundcloud, for all its financial challenges, provides artists with a platform to engage massive audiences globally without need for any middleman whatsoever.

DIY Versus Empowered Superstars

That is the DIY movement that will go down in history as one of the most culturally significant legacies of the Napster market shock. An organic, grass roots musicians’ revolution. Now though, we are seeing the emergence of a more commercially minded take on DIY, one that draws on the practices of its predecessor but that combines them with the big label model to take full advantage of the best of both worlds. This new breed of superstar DIY artist enjoys the benefit of fiercely held independence with world class distribution and marketing. They are taking the tools of DIY but not all of the ethos. The superstar DIY artist typically builds a strong brand and buzz (and often, but not always, a big live following) and then uses that as a platform to strike a deal with a major label (or a major label subsidiary company) to get the benefits of major label scale without giving up control (nor masters). This can take various forms, such as:

• Using a major label’s distribution company (e.g. Stormzy’s ‘Gang Signs & Prayer’ is distributed via Warner’s ADA)
• Setting up a label within a major label (e.g. Drake’s Ovo Sounds is part of Warner Music Group)
• Creating a tactical joint venture with a label for a specific release

In each scenario the artist retains large amounts of control (or at least more than in a traditional label deal) but gets the support of world class, global infrastructure and marketing. The artists picks the services s/he wants, like an advertiser does with a full- service ad agency. The label services and standalone distributor models have been around for some time, but now they are being used by business savvy, super ambitious superstars in-the-making. And the artist gets to retain an aura of authenticity and independence.

For those artists that want to push the needle even further, streaming services are emerging as an additional weapon in the armoury. Chance the Rapper revealed that Apple paid him $500,000 to become the exclusive streaming partner for ‘Coloring Book’, following hot on the heels of Frank Ocean’s Apple Music exclusive for ‘Blonde’. Apple is setting itself up as a modern day equivalent of the Medici – the medieval Italian family that was a driving force in the Renaissance through its patronage of artists such as Rafael, Leonardo Da Vinci and Michelangelo. Some time or another, Spotify will follow Apple’s lead. The superstar artist fits this streaming-service-as-label model best because an artist with big potential is going to deliver much better ROI for streaming services that are eager to drive market share and differentiation via original content.

Hip Hop Is Setting The Innovation Bar

Urban music, and hip hop in particular, has become a hotbed of artist-led business innovation. Although hip hop has always had stronger commercial sensibilities than other genres, streaming has brought the business innovation to the fore, ranging from the original hip hop superstar businessman Jay Z and his Tidal service, through Frank Ocean’s Apple Music released ‘Blonde’ to Stormzy’s streaming record breaking streaming success.  And the innovation is happening at the grass roots of hip hop too. As the brilliant Kieran Yates noted on the Boiler Room DIY panel, many UK Grime artists are now signing publishing deals before label deals as a) this can often mean bigger advances in today’s indie music market, and b) there is a perception that this means giving up less control, which in turn empowers the artist to strike a better deal with a label, or label-owned company. This also opens up a world of opportunity for independent music marketing agencies etc who can become part of new, agile teams.

Streaming has been continually rewriting the rule book for many years now, but we are entering a period of even faster change, with many of the more fundamental effects being the indirect consequences, such as the rise of post-DIY. It would be wrong, however, to think of this as a ‘death of the label’ narrative. Because the labels (majors and indies) are being smart enough to be as flexible and agile as artists need them to be. Artists are changing and labels are changing just as fast to meet their new needs and terms of reference. Perhaps, the best way to capture the approach of the new era of post-DIY artist is to go back to Jay Z’s classic ‘Diamonds From Sierra Leone’ lyric: I’m not a businessman; I’m a business, man!

 

How Spotify Can Become A Next Generation “Label”

One of the themes my MIDiA colleague Tim Mulligan (the name’s no coincidence, he’s my brother too!) has been developing over in our online video research is that of next generation TV operators. With the traditional pay-TV model buckling under the pressure of countless streaming subscriptions services like Netflix (there are more than 50 services in the US alone) pay-TV companies have responded with countless apps of their own such as HBO Go and CBS All Access. The result for the consumer is utter confusion with a bewildering choice of apps needed to get all the good shows and sports. This creates an opportunity for the G.A.A.F. (Google, Apple, Amazon, Facebook) to stitch all these apps together and in doing so become next generation TV operators. Though the G.A.A.F. are a major force in music too, the situation is also very different. Nonetheless there is an opportunity for companies such as these to create a joined up music experience that delivers an end-to-end platform for artists and music fans alike. Right now, Spotify is best placed to fulfil this role and in doing so it could become a next generation “label”. I added the quote marks around the word “label” because the term is becoming progressively less useful, but it at least helps people contextualise the concept.

Creating The Right Wall Street Narrative

When news emerged that Spotify was in negotiations to buy Soundcloud I highlighted a number of potential benefits and risks. One thing I didn’t explore was how useful Soundcloud could be in helping Spotify build out its role as a music platform (more on that below). As I have noted before, as Spotify progresses towards an IPO it needs to construct a series of convincing narratives for Wall Street. The investor community generally looks upon the music business with, at best, extreme caution, and at worst, disdain. To put it simply, they don’t like the look of low-to-negative margin businesses that have little control over their own destinies and that are trying to sell a product that most people don’t want to buy. This is why Spotify needs to demonstrate to potential investors that it is working towards a future in which it has more control, and a path to profitability. The major label dominated, 17% gross operating margin (and –9% loss) 9.99 AYCE model does not tick any of those boxes. Spotify is not going to change any of those fundamentals significantly before it IPOs, but it can demonstrate it is working to change things.

The Role Of Labels Is As Important As Ever

At the moment Spotify is a retail channel with bells and whistles. But it is acquiring so much user data and music programming expertise that it be so much more than that. The role of record labels is always going to be needed, even if the current model is struggling to keep up. The things that record labels do best is:

1. Discover, invest in and nurture talent
2. Market artists

Someone is always going to play that role, and while the distribution platforms such as Spotify could, in theory at least, play that role in a wider sense, existing labels (big and small) are going to remain at the centre of the equation for the meaningful future. Although some will most likely fall by the wayside or sell up over the next few years. (Sony’s acquisition of Ministry Of Sound is an early move rather than an exception.) But what Spotify can do that incumbent labels cannot, is understand the artist and music fan story right from discovery through to consumption. More than that, it can help shape both of those in a way labels on their own cannot. Until not so recently Spotify found itself under continual criticism from artists and songwriters. Although this has not disappeared entirely it is becoming less prevalent as a) creators see progressively bigger cheques, and b) more new artists start their career in the streaming era and learn how to make careers work within it, often seeing streaming services more as audience acquisition tools rather than revenue generators.

The Balance Of Power Is Shifting Away From Recorded Music

In 2000 record music represented 60% of the entire music industry, now it is less than 30%. Live is the part that has gained most, and the streaming era artist viewpoint is best encapsulated by Ed Sheeran who cites Spotify as a key driver for his successful live career, saying “[Spotify] helps me do what I want to do.” Spotify’s opportunity is to go the next step, and empower artists with the tools and connections to build all of the parts of their career from Spotify. This is what a next generation “label” will be, a platform that combines data, discovery, promotion (and revenue) with tools to help artists with live, merchandise and other parts of their career.

How Spotify Can Buy Its Way To Platform Success

To jump start its shift towards being a next-generation “label” Spotify could use its current debt raise – and post-IPO, its stock – to buy companies that it can plug into its platform. In some respects, this is the full stack music concept that Access Industries, Liberty Global and Pandora have been pursuing. Here are a few companies that could help Spotify on this path:

• Soundcloud: arguably the biggest artist-to-fan platform on the planet, Soundcloud could form a talent discovery function for Spotify. Spotify could use its Echo Nest intelligence to identify which acts are most likely to break through and use its curated playlists to break them on Spotify. Also artist platforms like BandPage and BandLab could play a similar role.
• Indie labels: Many indie labels will struggle with cash flow due to streaming replacing sales, which means many will be looking to sell. My money is on Spotify buying a number of decent sized indies. This will demonstrate its ability to extend its value chain footprint, and therefore margins (which is important for Wall Street). It could also ‘do a Netflix’ and use its algorithms to ensure that its owned-repertoire over performs, which helps margins even further. But more importantly, indie labels would give Spotify a vehicle for building the careers of artists discovered on Soundcloud. Also the A&R assets would be a crucial complement to its algorithms.
• Tidal: Spotify could buy Tidal, taking advantage of Apple’s position of waiting until Tidal is effectively a distressed asset before it swoops. Though Tidal is most likely to want too much money, its roster of exclusives and its artist-centric ethos would be a valuable part of an artist-first platform strategy for Spotify.
• Songkick: In reality Songkick is going to form part of Access’ Deezer focused full stack play. But a data-led, live music focused company (especially if ticketing and booking can play a role) would be central to Spotify driving higher margin revenues and being able to offer a 360 degree proposition to artists.
• Musical.ly: Arguably the most exciting music innovation of the decade, Musical.ly would give Spotify the ability to appeal to the next generation of music fans. The average age of a Musical.ly user is 20, for Spotify it is 27. Spotify has to be really careful not to age with its audience and music messaging apps are a great way to tap the next generation in the same way Facebook did (average age 35) did by buying up and growing messaging apps. (e.g. Instagram’s average age is 26).
• Pandora: A long shot perhaps, but Pandora would be a shortcut to full stack, having already acquired Ticket Fly, Next Big Sound and Rdio. If Pandora’s stock continues to tank (the last few days of recovery notwithstanding) then who knows.

In conclusion, Spotify’s future is going to be much more than being the future of music retail. With or without any of the above acquisitions, expect Spotify to lay the foundations for a bold platform strategy that has the potential to change the face of the recorded music business as we know it.

For more information on the analysis and statistics in this post check out MIDiA Research and sign up to our free weekly research digest.

Just What Is BandLab Up To With Rolling Stone?

News emerged yesterday that Singapore music creator community and collaboration platform BandLab bought a 49% stake in Rolling Stone. For those unfamiliar with BandLab this might have prompted a ‘What? Who? Why?’ moment. BandLab is the creation of Kuok Meng Ru, the son of one of Singapore’s most wealthy and successful businessmen Kuok Khoon Hong who founded and built the world’s largest Palm Oil business. Unsurprisingly the father has backed the son in his venture and so, yes, Rolling Stone has been bought, albeit indirectly, with Palm Oil money. But the question remains, why?

Kuok Meng Ru has a bold vision and ambition for Bandlab, he sees this as an opportunity to create a full stack music company from the ground up, built around the next generation of creators rather than trying to carve a slice out of the incumbent industry. There is no doubt that the music industries are a complex web of inefficiencies and that if they were being redesigned tomorrow that they would be a far more streamlined, effective and transparent proposition. This on the surface makes the music business ripe for disruption. But unlike fully open markets like the smartphone business, the music industries are interwoven with complications such as de facto monopolies, statutory licensing frameworks and global networks of reciprocal agreements. All of which shelter the business from the full impact of disruption. Change happens slowly in the music business.

BandLab Is Built By Music Super Fans For Music Super Fans

None of this means that change is not happening and that the rate of change will not continue to happen. But the odds are heavily stacked against a single entity aiming to unseat the marketplace with an end-to-end creation-to-marketing-to-distribution solution such as BandLab. Don’t get me wrong, I love the concept of BandLab. As a life long musician and as a music super fan, it is exactly the sort of platform I would probably build i.e. a musician’s platform for musicians. But the harsh reality is that the majority of consumers (67%) are casual fans and less than 5% create music and upload it to the web. BandLab is a platform full of cool creator tools and community features. It nurtures a creative feedback loop between fans and artists. In fact, it adheres neatly to the principles of Agile Music that I laid out in 2011 and it fits in with the zeitgeist of the death of the creative full stop. But a mainstream proposition it is not. At least not in its current guise.

Kuok Meng Ru wants BandLab to do to music what Flickr did to photo sharing and creativity. But there are many, many more people that create and share photos than create and share music. Soundcloud is arguably the single biggest cloud creator platform, yet the vast majority of its growth happened when it cowed to investor pressure and pursued the listener rather than the creator. As I said last month in a Bloomberg article about BandLab, There’s always going to be far bigger audience of listeners than there is of creators. And unfortunately the vast majority of aspiring creators are not good enough, nor ever will be, to amass sizeable audiences. If BandLab decide to start licensing in established repertoire, or acquiring it unofficially (Soundcloud style), then it can build audience at scale.

Where Next For Rolling Stone?

So, back to the title of this post, just what is BandLab up to with Rolling Stone? Rolling Stone and BandLab plan to open a Singapore subsidiary focused on live events and marketing. For Rolling Stone this means diversifying revenue and growing its South East Asia footprint. For BandLab this means leveraging Rolling Stone’s brand as a short cut to credibility and extending the promotional capabilities of its creator platform. Who will do best out of this deal is hard to say. It’s a tough time to be a news publisher and so when big money comes calling it is hard to say no. But whether this is the right deal for Rolling Stone is another question entirely. My money is on Rolling Stone being sold on in reduced circumstances some time within the next 3 years (5 at the outside) when BandLab either gets bought or refocuses its ambitions.