In a recent blog-post, music analyst Mark Mulligan muses about a “Music start-up strategy 2.0“.
In the essence, he asks the question, whether or not a music startup necessarily needs to obtain music licenses from record labels. This is a question, which we discussed quite seriously at Spectralmind as well. Why would a music tech startup need music licenses?
Of course, we need large music catalogs to analyze them. The larger the better. Currently we work with sample libraries in the range of 100k items. What we need is temporal access to music inventories for the sake of running the tracks in high-speed through our analysis software, without altering them in any way. But sole analysis does not necessarily presume to acquire music distribution licenses. This seems to be in line with what Mulligan says:
“…. in the more immediate term start-ups should look at ways to deliver their experiences without licenses. No I’m not advocating the Groove Shark approach, but instead leveraging the content licenses of digital music services that are pursuing ambitious API strategies. Music start-ups should think hard about whether they really need to own music licenses themselves to deliver a great user experience, or at least whether they need to right away ……. In the era of integrated music API’s it is no longer crucial for a music service to have its own licenses. An investor wouldn’t expect a mobile app developer to own Android, iOS or Windows Mobile so they need not expect a music service to own music licenses.”
Mulligan addresses the era of “integrated music API´s”. In fact, there is a range of companies out there, some of them startups itself, which are striving to fuel a new wave of music applications by granting access to music, music metadata or other music related information.
In other words: the scope of upcoming music apps goes far beyond the creation of just another download storefront or just another streaming portal. Playback of music is certainly a central use-case, but there´s much more possible with music. The interaction of music consumers with their content is manifold, and with the broadening of digital listening experiences (e.g. through smartphones, cars, connected homes), new needs for contextual services to improve discovery, search or social interaction about music, emerge. This new breed of music apps does not only accommodate to consumer needs, they help to create differentiators for the established digital music distributors, each of them struggling to extend their footprint, if nothing else, than to generate the returns needed to cover the upfront payments for music licenses.