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Feb 17 2023

🔵 Why SoundCloud's new JV with WUGD matters

The latest news from the music and tech industries
Hi there -

I suspect to most, the news that Jax Jones and his manager Dan Stacey have entered into a JV with SoundCloud might not the thing most likely to jump out as Key Development of the Day.

I beg to differ.

For the keen-eyed, SoundCloud is certainly shaping up as something of a key player around solving the artist remuneration problem, arguably alongside Bandcamp in terms of sheer reach and use by artists.. 

Soundcloud, so far, has remained relatively low key. With various indications of how its fan-centric royalties system is developing in recent months though, I suspect we're about to see it really step forward. Given its historical close ties to electronic music in particular, it makes total sense to strike the kind of deal it has now announced with Jones' and Stacey's WUGD label.

For me, this is about the possible narrative here. If artists can rise and break via SoundCloud, with fan-centric royalties in place, I could see it increasing the chatter around viable alternatives to the incumbent streaming models.

No, it won't topple Spotify and Apple Music any time soon, but that's not the point. The issue here is how much attention turns to these alternative methods, and how, over time, that erodes faith in the incumbent DSP model.

Today's announcement is a modest one in the grand scheme of things, but I think it would be naive to underestimate how this signposts changes that are soon to come on a much wider level.

Have a great weekend,

D.

🎶 written whilst listening to "Invasion of the Mysteron Killer Sounds", a comp on Soul Jazz in which Kevin 'The Bug' Martin and Stuart Baker compile some of the finest modern dancehall vibes at the time. Full of stone cold bangers (Team Shadetek's 'Yoga Riddim' and Lenky & Sly's 'Now Thing' to name two) it is a fine reminder of the power of the dancehall sound. Highly recommended. 
Stories from the Music Industry:
SoundCloud expands artist services business globally; enters JV with Jax Jones' and Dan Stacey's record label WUGD (What You Gonna Do)
DJ, songwriter, and producer Jax Jones launched WUGD in 2021 alongside Dan Stacey, the founder of Loving Alliance, which is home to artists like Riton, D.O.D, rising star Hannah Laing, and Jax Jones himself. SoundCloud says it has teamed up with WUGD “to discover, nurture, and invest in emerging electronic music artists featured on the platform internationally”.

👆🏻Hot take: I really like where SoundCloud is headed in general, and this is further evidence of that. It strikes me as a very wise move for both parties. 
It’s suing Utopia Music claiming that a $26.5m acquisition deal agreed in March 2022 has dragged on without closure – and that under the terms of this deal (with the sale price increasing every week after 1 November that it didn’t close) Utopia is now obliged to pay more than $37m. November, of course, was the month when Utopia laid off some of its staff, with its CEO departing a couple of months later. Backing out of uncompleted acquisitions would thus be understandable: the question here is whether the terms of any agreed deal allow that or not.

👆🏻Hot take: more grist to the mill that Utopia appears to be struggling. Given its holdings in UK distribution, I am sincerely hoping it can balance out, and soon. 
Responding to TikTok’s move in Oz, ARIA’s CEO, Annabelle Herd, said this week: “It is frustrating to see TikTok deliberately disrupt Australians’ user and creator experience in an attempt to downplay the significance of music on its platform. “After exploiting artists’ content and relationships with fans to build the platform, TikTok now seeks to rationalise cutting artists’ compensation by staging a ‘test’ of music’s role in content discovery. “This is despite the fact that in 2021 TikTok’s Global Head of Music, Ole Obermann, said: ‘Music is at the heart of the TikTok experience.’”

👆🏻Hot take: whilst I am curious to see how this story pans out, I do agree with the article when it says that TikTok has far bigger existential threats right now. 
TuneCore had also been the service’s distribution partner, we’re told, since SoundOn quietly launched in beta in September 2021. But now, TikTok has a new distribution partner: Amsterdam-based B2B tech and services company, FUGA, which was acquired by Downtown Music Holdings in January 2020. TikTok has confirmed to MBW that its deal with TuneCore has ended and that it has had a partnership in place with FUGA since September.

👆🏻Hot take: curious as to why TikTok has changed over, but it seems a logical move. I do like Downtown's suite of tools for artists, especially at the more DIY level. 
Napster announced that it acquired Mint Songs, a music NFT marketplace that aims to help artists establish a thriving Web3 presence, on Wednesday (Feb. 15). The acquisition brings together a streaming service with a platform focused on creating digital collectibles.

👆🏻Hot take: interested to see if Napster can establish itself. Still a little sceptical, but let's see. 
Stories from the Broader World of Tech:
TikTok adds dedicated video feeds for sports, fashion, gaming and food
TikTok has quietly added new topic feeds to its homepage alongside its current “Following” and “For You” feeds. Some users are now seeing new video feeds dedicated to “Sports,” “Fashion,” “Gaming” and “Food.” Swiping between the feeds shows you content for each category without having to specifically search for it.

👆🏻Hot take: yet another indicator that TikTok really has YouTube in its sights. The final confirmation will be when it launches an app for smart TVs and games consoles. I doubt we will be waiting long. 
In the case of Spotify's Findaway, however, authors and also voice actors have complained about the clause which gave Apple the rights to "use audiobook files for machine learning training and models." "It feels like a violation to have our voices being used to train something for which the purpose is to take our place," Andy Garcia-Ruse, a narrator, told the publication. It's not clear when this clause was added, as the authors and actors say it was not explicitly pointed out to them when they signed updated agreements. Findaway was bought by Spotify in June 2022.

👆🏻Hot take: curious to see how this pans out. Certainly this will be a recurring issue around AI and what machine learning has been trained on. Not the first and won't be the last. 
Superplastic, the startup that created and develops the characters, has raised $20 million led by Amazon’s Alexa Fund, a strategic investment that will see Superplastic and its characters initially collaborating on an animated comedy series with Amazon Studios, and working closer with the retail and internet services behemoth as it looks for more ways to connect with younger consumers.

👆🏻Hot take: I can see this taking off. It makes a huge amount of sense and the likes of Lil Miquela have already proven the concept. 
Need something else to read? Here you go:
Friend of MU Keith Jopling has written a white paper focusing on artist career longevity. The paper is something of a spin-off from his "Art of Longevity" podcast, and it examines career curves for artists, covering such questions as "Can common artist career paths be found?",  "How important are hits to longevity?",  "Can artists have a career without a hit?",  "Does dominance guarantee longevity?" and  "Do classic albums still exist?". 

The white paper is a free download - I highly recommend it as it provides plenty of food for thought. Click the GIF below to grab your copy now! 
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The latest from Motive Unknown:
Lex Records made it's name as a rap label, and over the past two weeks has announced two future-classic rap albums in the form of B.Cool-Aid (Pink Siifu & Ahwlee) and Chuck Strangers 💿💿 Can't wait for these to drop, and as always will be working with Lex on the digital advertising & strategy for these gems 💎
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