The Ladies go Gaga for Music Entrepreneurs

Here The NextWomen Events Editor, Misae Richwoods, waxes lyrical about Music4point5.

Misae Richwoods (flickr cc: pevijo)When it comes to the old sing-a-long, two girls who’ve been backing many an act are Petra Johansson and Rassami Hok Ljungberg, whose duo performances are made under the stage name of 2 Pears. Better known for their encore performances staging Tech Crunch Europe’s regular events, 2 Pears noticed that tech was starting to rock the music industry and put out a ballad called Music 4.5 to serenade the two together. Would it be an A-ha moment, INXS of expectations or Simply Red?


pic_music4point5Held at Central London's Cavendish Conference Centre near Harley Street, the line up was equally plush. An opening panel was made by The Guardian's Jemima Kiss interviewing the head of The Performing Rights Society, Fergal Sharkey. Whilst half expecting him to break into a medley of 'a good right these days is hard to find', successive panels focussed on key topic areas and played a percussive chorus of music being a strong industry.

"Let's get this clear,"

said Jeremy Silver of the FAC,

"all this talk of music being an industry in crisis is media hype. Look at the facts. Live music is massively on the up. Merchandising is on the up. The only area that technology has affected is recorded music and that's the area that technology created in the first place."

This was backed up by Chris Corey of the PRS

"From £1.3bn to £1.4bn last year in recorded, music is a growing industry and a great industry to be in".

"The issue," continued Jeremy, "is simply of an industry trying to modernise itself. And like the Post Office, it's messy!"
With both the fact, figures and opinion of industry heads singing in harmony that the future is bright, what were the obstacles that entrepreneurs need tackle to make 4.5 times their return on investment in music?

  • Rights Collection Societies have a reputation issue. Here in the UK we have two. Overseas the situation may be even worse. Therefore licensing the music your users want can be a complicated issue.
  • Applications that broadcast music jukebox style, such as Spotify Premium, may also need the end user to pay Rights Fees. Examples would be pubs or hairdressers playing them.
  • The music industry lacks a collective front for retailers to work with and that present a barrier

And yet outside of these obstacles, there were several rhythms of opportunity for entrepreneurs to grasp:


Ben Drury, 7Digital
We managed to succeed as an independent retailer against iTunes by adding value. We offered a locker, a Blackberry service and power over one thousand services. By being open and non-proprietary we've become all that Apple isn't and in that lies our differentiation

Darshan Sanghrajka, The House London
Record labels these days don't want to sign unproven acts. The onus has now come upon the artist to start gigging early, to Facebook, MySpace, Twitter and YouTube and build a fanbase. We need to build the tools that let artists manage their marketing easily so they can concentrate on being creative

Shivz, Independent Artist
People my age [18] are buying music legally and downloading it. We consume it on our mobiles [it needs to be easy to put it on platforms other than iPhones]

Erik Nielsen, Wingnut Music
By owning the relationship with our fans we were able to ask them if they wanted a new Marillion album. We [Marillion] worked out we needed 5k requests to crowdsource this. We were astounded to find we had 12k. Artists need ways to cultivate their connection to their fans

Chris Corey, PRS
We're constantly looking to innovate and in 2007 we did that with a unique licensing deal with YouTube. We need technology innovators to help us and we're open to suggestions.

Hugh Stanley-Clarke, Gigaboxx and ex-EMI
There is a backlash against free downloading and piracy. On one hand artists are getting more connected to their fans which makes them feel less like they can rip them off and on the other hand the novelty is wearing off; it's a hassle compared to the low cost legal alternatives


It sounds like the Heavy Metal that was royalties a few years ago is starting to mellow, take a haircut and consider doing a duet with Mariah. And to see who had the X-Factor, a series of pitching panels were run including a present to teenagers panel and a Tech Crunch Europe Start ups panel. Amongst the hopefuls some female led start ups:

  • BandCentral – a multi-login band hub that enables artists communicate, manage and organize their activities. It deals with internal things like finances, logistics of gigging and calendaring as well as external communications like syncing messages with Facebook, MySpace and Twitter with one click
  • AudioFuel – Ever noticed how it’s easier to exercise when you’ve a) got music on and b) have someone pepping you up? AudioFuel did! They make downloadable music with a beat designed to coincide with your footsteps combined with supportive coaching messages to keep you running at your peak range

Every Start-up Needs a Simon Cowell

Of course, X-Factor wouldn’t be complete without its Simon Cowell and in start up terms the people who need to be wooed are the investors. So who better to talk to about the line up that Stradbroke Advisors very own Next Woman, Inmaculada Martinez. Amongst other notable achievements, Inma was tasked with helping accelerate its growth. In her time at that company she helped it grow from a one man band by delivering $5million in investment funding. Some of Inma’s thoughts on the panels that may be useful for aspiring start ups include:

  • Experience helps credibility. When PSonar pitched, the fact that the management team was made up of senior staff from Bango, Autonomy and ET Capital, turned heads. If you have relevant experience, mention it. If you’ve no experience but a ground breaking insight, consider attracting experience to your team for the connections they can bring
  • Business models need to be scalable for serious investment. One startup, CloseCallMusic, intended to make a significant portion of its revenues from web design. Service based businesses are inherently limited and therefore tend to turn off typical tech investors who prefer software based products because of their ease of replication
  • Value is not necessarily proportionate to income. Apps like Twitter have shown that a service can be hugely valuable without having an immediate income stream. Specialist Meta data enhancement provider Decibel could be a similar thing whereby the value of the data in the system grows as time passes and it becomes more embedded in other systems. Checking that you have the right type of business model for solution you’re proposing will help you gain greater weight in investor’s eyes

The Beat Goes on.....

The show closed off to an after party gig called Almost Famous held at Gibson Guitar’s legendary Rathbone Street studios laid on by the Performing Right Society. It wasn’t just the bands that seemed to be striking up a new chord; amongst delegates it seems Music4.5 was well received. A minor aside was that some people had hoped for greater presence by the bigger labels and by artists so that tech entrepreneurs could get to understand their needs more intimately and get to work solving them and yet overall the feeling was strong and that important connections were being made. Everyone I spoke to was happy to hear that there was a next installment planned in November 2010. Till then, the beat goes on…

Sign Up to our Newsletter

So you enjoy The NextWomen. Why not sign up to our monthly newsletter?
You get a Letter from the CEO :-), the chance to catch up with the best of our recent articles - and some extra things we throw in once in a while.

We try hard for smart reading.