Why should record labels care about start-ups?

It’s hard to go long without talking about Spotify these days – I haven’t even managed one sentence. And given the recent public listing, current valuation of $26.5bn and dominance in the UK streaming market, it’s hardly a surprise. The very name “Spotify” has such weight and power that it towers over the other players in the market, despite not yet turning a profit. Quite remarkable. But only 10 years ago, Spotify was just another startup, reaching out to labels and the industry, offering a new idea and possible direction.

While Spotify has certainly helped the UK music industry recently enjoy the fastest period of growth since Britpop, we are still far off the heady heights of the ‘90s. Much has been written about past reluctance of the industry to engage with new technology. A pattern of reaction, litigation and lawsuits was a familiar story. As the speed of change in our modern world bounds forth at a pace that shows no signs of slowing down, music and technology must work together to continue to build on the current successful growth.

While some labels have taken it upon themselves to seek out new technology – the Abbey Road Red Incubator run by Universal provides great support to music tech entrepreneurs, researchers and developers, and the indie scene has seen the likes of Marathon embarking on their own dedicated start-up lab - it is difficult for the recorded music business as a whole to maintain its finger on the proverbial technological pulse.

This is where the BPI Innovation Hub comes in.

Launched in November 2016, the Innovation Hub hosts events across London, and develops relationships between recorded music businesses and technology start-ups. Given that the BPI represents labels of all shapes and sizes, from the majors, the “mini” majors, right through to the smaller, breakthrough companies, it is in a unique position to invite a cross-section of digital experts to meet with a strong selection of start-ups working in music. Likewise, a whole range of genres will be covered – the next event, being held at Digital Catapult, will see presentations from labels representing the repertoire of classical to rock, from the Asian Arts Network to Pure Pop.

Previous events have seen not only business relationships flourish – again at Digital Catapult we will hear more detail
about the work between Sony and the Geo-Location company Landmrk, who presented at the inaugural event back in 2016 - but also conversations sparked between our colleagues on all sides about technology, the future of music, the concerns and the hopes to consider. With so much cross-pollination of individual people between labels throughout their careers, it is vital that digital experts and enthusiasts be brought together in this way.

Who will be the next Spotify, or indeed what will even be the next area within technology to cause major disruption?
Blockchain, AR, VR, AI are all buzz wordsthrown around at every possible opportunity, but how will these specifically impact the music industry?

2017 alone saw $3bn dollars invested into Augmented and Virtual Reality startups, so there is no doubt we will see a swell in activity in this area. But how will the AR/ VR worlds disrupt music? Will there be more sync opportunities as VR universes grow, will fans want and expect a Pokemon-Go style marketing campaigns to unlock new music from their favourite artists? A lot of great work has been done here already, but is it the game-changer?

I’m often asked how Artificial Intelligence even has a place in the music industry, and despite the potential applications in the studio, no-one is suggesting AI will replace the talents of the producer. But as a tool in remixing, or in the hunt for the perfect sync-replacement track, the possibilities are certainly interesting.

Will blockchain be the answer to the outrageously complex database problems of rights-holders, or is it more exciting to see how the technology behind crypto currencies could enable instant micro-payments to artists and labels alike, drastically reducing pay-out times of royalties?

And in any of these areas, which company will rise to the top and tap into the brand value of a name ubiquitous with their area of disruption, or in simpler terms…who will be the next Spotify?

The BPI Innovation Hub seeks not to instantly answer these questions, but to become part of the solution, working with
labels and start-ups through this ever changing, never boring landscape of music.