Finding for your startup: Music Startups

The music industry is no exception, technological advances have also impacted the industry and are changing the way we enjoy music. Innovation departments are developing new ways for music producer to be created and played. In addition, the different music startups are beginning to automate everything possible, eliminating risk factors and conflicts for artists. The digital age has created many opportunities for fans and various fans to interact with their favorite artist or band. And if you are a true music lover, you will also find reading about Music slots interesting.

The small collection of startups mentioned here represents just a few of the ways startups are succeeding in this industry at a breakneck rate.

Is it difficult to be successful with a music technology startup like What can you learn from the journey that includes surviving a death valley, attracting 1 million users and a large corporate customer, but still deciding to close your business? Vlad Vernigora, entrepreneur and founder of MusicSense, a Danish-Russian music startup that uses AI to provide playlist recommendations, shares his knowledge and advice on entrepreneurship in the industry with Stereotheque .

The history of the startup

In 2011 Vlad and his team began developing a service called 10Tracks that allowed you to save and listen to music in the cloud. The service was very innovative for the time (there was no Apple Music or Yandex Music , Spotify was still in the development stage and very unprofitable) and the business model was simple and clear: the user received up to 2 GB of space for free and paid when he exceeded the limit. The team spent a lot of effort preparing and obtaining all the music licenses to launch 10Tracks. But just before the planned launch, Google Music had been released, the development of which was kept secret.

Nonetheless, Vlad’s team still released 10Tracks quite successfully but found it impossible to compete with Google Music. As a consequence, the startup decided to pivot and offer a music recommendation service under the name MusicSense . The algorithm used by the technology was also new and different from others: it analyzed music from 40,000 radio stations and generated music suggestions taking into account the user’s location, music library and other data. So if you live, say, in Tel-Aviv and listen to Nirvana, the app would create a playlist with personalized recommendations based on the analysis of radio stations around you.

Using AI for music recommendations

Spotify, for example, was using a different method – a collaborative leak – which led to the fact that local musicians and bands that did not have a large number of listeners were left out of the recommendations given by the service. And we realized that local DJs always know better all the local artists who are in the top at all times. At MusicSense we received a lot of feedback from users who were happy to discover their local music scene”- says Vlad.

The startup managed to attract more than 1 million users, and in 2015 MusicSense partnered with Beeline, the third-largest telecommunications company in Russia with 50 million users at the time. However, the startup was unable to achieve profitability and the team decided to shut it down (the service is still accessible, however).

Tips for the Music Startup

“I learned a lot while developing the music startup and this experience helps me a lot in my current projects as War e fly, a digital products studio. The industry is highly competitive, so you learn to move fast. However, when someone asks me for advice when setting up a music startup, I try to dissuade them from doing so, because it is a very, very difficult market. It’s hard to monetize music streaming services and get enough margins. ”

Here are the tips for current or potential music startup founders about the industry:

1. The barriers to entry to the music streaming market are extremely high for music startups

The procedure for acquiring music licenses is much more expensive and complicated than it seems at first glance. A startup faces massive down payments and the process is very bureaucratic. “5-7 years ago, streaming was something completely new and innovative for those industry players responsible for music licensing. It also turned out that it takes you years to get the music rights, ”says Vlad. The industry is very conservative with many hidden traps. Also, it is a full time job to manage the acquired music collection.

2. It is almost impossible to compete with the giants in the B2C sector

The music streaming market is practically an oligopoly dominated by such well-known competitors as Spotify and Google Music. It seems almost impossible to compete with their resources or even sell them some of their technology. “You need the B2C model for user acquisition, but you can only make money with B2B” – says Vlad.

3. You can always find creative ways to acquire users if you don’t have enough budgets.

The two most important components for any app, regardless of the industry, are the social component and virality. MusicSense offered all the possibilities to share playlists, invite friends and integrate with social networks.

Vlad shares that you can invent many unconventional ways and many tricks to attract users when you are struggling with the budget (considering that promotion on Facebook cost much more 5 years ago when the project was in the active phase). For example, the startup was analyzing “#nowplaying” tweets on Twitter. The startup could find out what music people were listening to at the time and suggest playlists that they might also like. MusicSense processed around 1 million tweets and garnered around 10,000 users. In addition, different collaborations, such as white label sales, help a lot.

4. To grow a music startup, you need a strong product

There is no magic! A general principle applies in any industry: to be successful, create a high-quality product.  But then we scrapped the idea. However, I doubt that we would have created an application as successful as TikTok , they have a very good product ”.

The small collection of startups mentioned here represents just a few of the ways startups are succeeding in this industry at a breakneck rate.