Music+Tech Investing Heats Up In 2010

April 19, 2010

12:54 pm

Last year left me very excited about the music + tech space. Since last summer I have been following a slough of start-ups, labels, developers and musicians both creating and taking advantage of the new tools and APIs at their disposal. After attending only a few hack days and meet-ups, I knew it was a unique time to be involved. 2010 seems to have continued the pace.

We have seen the trend towards behavior tracking, such as daily spending and location tracking via Foursquare and Blippy. We also see a niche version of tracking behaviors in music: Last.fm, Twones, Songkick. The subset (or reward) of tracking is ultimately recommendations based on analytics of user behavior (Lala, Pandora). This is one direction you will see emerging start-ups taking the music discovery path, but as we learn more about user behavior in this space and as more APIs become open for use among developers, I am sure we will see more applications.

The interesting part about music is that there are many directions to apply and derive the “metrics, analytics, and discovery” triad. You can analyze data, the users themselves, external variables such as time, tangible data like performance location, or even get as specific as analyzing harmonic and structural aspects of sound, or the psychoacoustic way that the brain perceives the music.

Music + tech start-up investments are up in 2010. We are seeing hardware, music commerce sites with unique revenue models, and companies that specifically analyze music data and user behavior.

A few examples:

  • EchoNest, started in 2005, is a musical brain that reads about music, listens to music, and learns about music trends by analyzing data behavior. This past January the company raised $1.3 million from 14 investors and in March, received a Phase IIB SBIR grant in the amount of $550K from the National Science Foundation.
  • Guvera, an Australia based company started in 2008, offers free music downloads and has a unique sponsorship model that aims to keep everyone – from artist to label to consumer – happy, by providing content through sponsored channels, tailored to the consumers’ interests. The company secured $10 million in funding in 2009, and has added another $20 million in 2010.
  • Sonos, originally founded in 2003, makes a digital home audio system that allows you to listen to your digital music from any stereo in the house or from a Sonos unit. It’s like having an iPod in every room of your house, each having access to your entire music collection. Just last month Sonos confirmed they raised another $25 million from Index Ventures, giving them a total of $65 million raised.

I look forward to what the year will bring, both from investors, start-ups, and the evolving behavior we will see among users. As digital content is increased, we need to find additional methods for tracking content and behaviors, qualifying recommendations, and making usable tools for musicians and music lovers alike. 2010 seems to be off to a great start.

Editor’s Note: This guest article was written by Holly Habstritt, an Information Architect and Interaction Designer with a design, development, and music background. Find her on the web here and follow her on Twitter @habber.

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