Composium Digest: Back at it
№34 | Anouk Dyussembayeva | April 26, 2022
Composium Digest is a newsletter-only addition delivered once a week. Get overviews of interesting stories happening in the music industry, stay informed of various opportunities music startups and companies offer and catch up on some of the Composium articles you might have missed.
SPACs are back
So the Spotify rival Deezer is planning to go public through a SPAC with I2PO.
Teaming up with a special purpose acquisition company to go public has been a very popular route for many startups back in 2020. I mean, even Nasdaq called 2020 the year of SPAC IPOs, and they’ve raised $87.9 billion in the first three months of 2021. Everyone from WeWork and Shaquille O’Neal to UMG and Jay Z hopped on — or at least tried to — the trend.
Why is SPACing so attractive? Because they are listed on the stock exchange and exist solely to buy out private businesses, it makes the process of going public much easier and faster for companies rather than having to go through the traditional IPO.
As far as Q2 2021 goes, Deezer took up a mere 2% of the world’s streaming subscription market, and while it is popular in European countries, the company has been facing these struggles for years.
Through this deal, it hopes to turn the ship around and “become profitable by 2025.”
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TikTok is back at it again
It’s obvious that the ByteDance child is influencing what and how music content is consumed more than any other music platform. In March, TikTok launched SoundOn, a logical step considering the number of artists the service houses and wants to support.
Back home, it has recently updated its music streaming service Qishui Yinyue, which the company rolled out last month, putting it in direct competition with NetEase and Tencent, the leading DSPs in China.
TikTok’s revolutionary algorithm and recommendation system were one of the main reasons why its number of users surge so fast, and considering that Qishui Yinyue has also been bred on the algorithm, there’s a big chance the streaming service will grow its listener base very quickly.
Let’s be honest — the current algorithms that the major streaming services employ are still weak, and I think it’s about time music geeks around the world get the song recommendations they deserve.
Spotify is, however, highlighting user-curated playlists, which would hopefully bring more variety and music discovery to the platform.
It’s hardly a surprise that TikTok is on a music grind: it also testing out a sound editing app, Mawf, around the UK and Europe. The service takes your vocals and turns them into instrumental sounds. The best part is that you can implement those sounds into Logic or Ableton.
Whether the major music companies like it or not, the music industry is becoming more and more influenced by non-music players. We’re in for a lot of change… in everything from music creation to distribution and who plays the key role.
Tips
Do you remember Spotify’s Greenroom and its Artist Fundraising Pick? Now, the Swedish streamer is rebranding both into Spotify Live and Fan Support, respectively.
That allows artists to create their own audio rooms and make money doing so — through the Fan Support, listeners can donate and tip their favorite musician.
The concept itself isn’t a new notion: there have been apps like Bandcamp for years. But the fact that Spotify is introducing the test feature is an entirely new chapter for the music industry.
The seed is sprouting (who raised a round)
The rights management company Cinq Music Group got $100 million from its parent, GoDigital, to expand into new markets and buy music rights
Soundful, an AI music creation service, raised $3.8 million in its seed round from a number of investors. In its press release, the company says the roster includes “leaders from businesses such as Microsoft, The Walt Disney Company, Accenture,” and more
Pollen, a platform that does music, travel, and experiences, had Kindred, Northzone, Sienna Capital, and others invest $150 million into it
Stats
Netflix has had a rough week — it lost 200,000 subscribers and its stock plummeted by 36%. Spotify’s fell 10% on April 20
NFTs, NFTs, NFTs
3LAU on non-fungible tokens in the music industry
Other links to check out
Billie Eilish-backed Music Declares Emergency released a sustainability guide for the music industry — it includes information on how everyone can do better to prevent climate change