Impact Soundworks’ Andrew Aversa has published the second video in the Music Business 101 series of tutorial videos, taking a look at how you can make money with your music. The video is part of the Impact Soundworks Academy, which delivers lessons and tutorials on a wide range of music production, composition, and business topics, […]
Impact Soundworks has launched its free video series Impact Soundworks Academy, delivering lessons and tutorials on a wide range of music production, composition, and business topics, created by professionals and experts. The series aims to give you immediate, practical, and actionable knowledge you can use to improve your music, your workflow, and your career. In […]
Native Instruments has responded to our request for more clarity on recent layoffs and how this impacts their future plans. Other sources tell us there have been deep cuts into teams managing products, marketing, and design.
As I wrote late last night, NI has publicly stated they’ve cut 20% of their workforce. I should clarify that that number represents the layoffs executed just on Thursday of last week. Multiple sources have confirmed additional layoffs over the summer push the number closer to at least 150 rather than 100. This includes a leaked departure of the existing desktop TRAKTOR team in July, and additional product owners and designers, including the previous Director of Design.
This isn’t entirely a shock, though the scale and concentrated timing may be. It does seem cuts at NI were a long time coming. Native Instruments has a massive and complicated array of products, many of them now legacy products, and an over-complicated structure around them – both from a marketing and organizational standpoint. I think it’d be tough to find anyone to disagree with that, even in a week when people’s emotions are riled up by watching major layoffs.
And this isn’t just about the business – there’s a direct line to your experience using the products. If NI has too many products and a complicated organization that makes it hard for people to work together, that impacts users. It means it’s tough to execute new ideas and make the tools you use better.
It also stands to reason that even in any significant reorganization means staffing changes and cuts. The questions customers and partners might ask then is – why these cuts, why so deep, why now, and what’s the plan going forward?
The picture I’ve gotten from Native Instruments officially is convoluted. NI says they’re working on an integrated platform, but the cuts have hit UI, UX, design, and engineering, and late in the apparent timeline for whatever project that would be. We’re also now in year three of NI’s push to get us to think about services, but we’re not much closer to understanding what that’s supposed to mean than when we started. Here are some landmarks in that timeline:
March 2017: NI acquires Metapop, founded by former Beatport CEO Matthew Adell. Adell becomes Chief Digital Officer.
August 2018: Adell is out as Chief Digital Officer. (I believe this role also is eliminated at the same time.)
July-August 2019: Roughly 150 people, or 30% of the workforce, laid off. 20% are cut on August 29 in a single day.
The Thursday round of layoffs are part of a string of changes through 2019, many as high as Director level – including, to be fair, some hiring as well as firing. The main question I had is, beyond CEO / co-founder Daniel Haver and Chief Innovation Officer / President Mate Galic, who is running the new product effort, now that existing leadership of Traktor and Komplete are gone and the Chief Digital Officer is almost a distant memory.
That person appears to be Nicholas Goubert, who has this year gone from VP Digital Services to VP of Products to – as of this month – Chief Product Officer. Streamlining the organization under a single product leader instead of separating digital/services from the organization at least makes sense. It means NI is realigning themselves as a services-driven company.
The obvious parallel would be to a company like Adobe, although while Adobe offers extensive services, it has kept a bunch of complex product teams and silos. In fact, that parallel itself may be apt – Adobe’s complexity reflects the fragmented and specific needs of designers. Musicians are even more particular, which speaks to the difficulty of this process. (And… I’m not sure all of you are entirely in love with Adobe, either.)
The business of being NI is selling stuff to us music makers, though, so – what service? Do we want it?
NI’s responses don’t give me a much more solid grasp of what they have in mind or how they intend to execute it. (And as you see in the timeline above, they’re effectively announcing the business structure in September 2019 that delivers the services they first talked about at the start of 2017.)
But they at least confirm that they’re not exiting hardware or the DJ market, contrary to rumors, and that the future services are intended to connect to products you use now. Note that saying “we’re committed to Komplete” doesn’t also mean something like Reaktor. Those silos actually appear to remain. I’d be optimistic about something like Reaktor, which powers tons of sounds and products.
So I don’t think you should panic about any major products, based on what we’re seeing here. I can also confirm that some core teams are unaffected – like NKS. And for at least one vision of where NI intend to go, even if it’s one that’s been out for a while, NKS’ idea of integrating sounds, control, software, and hardware across an ecosystem of partners is definitely one glimpse:
CDM: If Native is building a new platform, why were resources cut?
NI:Our new organization aims to break down functional and brand silos that have developed over time through the continuous expansion of our portfolio. Given our broad spectrum of products and the overlap between roles, it means that certain areas of product development are affected more than others by the redundancies. In the past, we have simply been doing too much at the same time and this strategic change as well as internal remapping of talent will allow us to move forward in a more effective and collaborative way.
With the focus on a platform strategy, do users need to be concerned about support for and investment in existing products?
We are fully committed to our existing brands Komplete, Maschine and Traktor. The reason why we are focusing on a platform strategy is actually to improve the experience for all users of our products. We strongly believe that by improving accessibility and usability of our portfolio, we will be able to provide an enhanced and more cohesive experience, both for existing and new customers. Rather than releasing more and more products, we want to ensure that users are getting the most out of our current products through a connected and unified experience.
Will Native Instruments continue to release integrated hardware?
Creating deeply integrated experiences between hardware and software remains at the core of our vision. However, we want to deliver more value to users of our hardware by implementing new features in the software that will allow for a better overall experience of our ecosystem.
What about the future of Traktor?
We continue to be fully committed to our DJ platform Traktor and its passionate users. Also within the DJ domain, we are focusing on improving the software experience, building on the creative and modular legacy of Traktor for both desktop and mobile. Supporting this, we are also continuing to evaluate the right accompanying hardware products. In fact, Traktor users can expect a new hardware controller this year.
Okay, so the most we can come out of this is, Traktor hardware and products remain. The leaked firing of the Traktor desktop team suggests that future Traktor products will take a different form, and won’t be based on the legacy Traktor codebase (which is what powers Traktor 3).
Other than that, we mostly have to wait.
I wish the new teams at NI the best. Before the layoffs, I’d heard from the current Metapop team, wanting to show what they’re working on. And with SoundCloud failing to deliver innovation for creators, and Alihoopa dead (the Propellerhead-created online music making service, later spun off), there’s a vast space for someone to show a way of using social features for music making.
However, I can only echo the overwhelming buzz I’m hearing from the larger community. Large layoffs are unsettling, not only because of the people lost, but because of the presumed disruption to the organization. Some talent in music tech is very specific – and the departure of these 150+ NI employees over recent months has competitors eager to hire. (Behringer went as far as posting their headhunting call publicly; other companies – inside and outside this industry – are being a bit more discreet.)
For now, what Native Instruments are announcing is mainly layoffs, not products. Their main job now, to regain trust after a shaky end to this summer, would be to turn that begin to say how this relates to the people who rely on them.
I know a lot of you are deeply invested in this company – some even in your businesses as partners as well as in your music making careers or passions. I’ll do my best to keep you informed.
Native Instruments last week cut 20% of their workforce, as part of a “One Native” strategy that is leaving some customers and media uncertain about the direction of the company and its products.
Here in Germany, news of the layoffs spread quickly. On top of a handful of layoffs over the past couple of years, roughly 100 staff were cut in a single-day reorganization. Over the course of Thursday, those employees learned the news, most in the Berlin headquarters. With cuts this deep, news spread to social media, but in absence of a public statement, there was little to report.
Native Instruments delivered a statement to CDM on Monday, included unedited below.
It’s murky on details about products, however. I am in touch with NI about the reorganization, and requested more clarification from NI and its executive team. I haven’t yet received that information.
The summary, as we wait:
Revenues continued to grow for NI through 2019, so any snap analysis you may have read online that this is in response to financial trouble are likely misguided. NI says they made these cuts as part of a refocused emphasis on a “new, unified, and fully integrated platform” coming next year, and what it terms their “One Native” strategy.
So, NI has silos and divisions in their organizational chart that don’t fit their future product plans. This has happened in NI’s portfolio before, for those of us who have followed the company for many years.
The challenge is, the current cuts NI is making – across Sales & Distribution, Marketing & Product Management, Administration, and Engineering, according to the statement – reduce some of the talent inside the company. They have an ambitious plan, in other words, and now with fewer people remaining, all reorganized into new teams. I expect that will raise some questions among both customers and partners in their third-party ecosystem about their ability to deliver.
It’s also unclear what this platform will be. It’s not sounds.com, exactly – the press statement says it will “include” elements of that. It may also include technology or elements related to recent acquisition Metapop, a collaborative online space for sharing tracks and holding competitions. The statement says this online service will connect the company’s “existing ecosystem of … software and hardware” to some kind of “centralized online platform.” For those invested in current products, though, that doesn’t provide a lot of clarity – least of all when some of the people developing those products you use were just laid off.
To state the obvious, this has come as a blow to many in the tight-knit community around music production technology. These are partners and friends to basically anyone working closely with this industry. The tools in question are an intimate part of music making for many of you.
I will keep asking questions in the hope that we get a clearer picture of where Native Instruments, the organization, and NI’s product lines are headed in the future.
I’ll share answers as soon as I have them, as accurately as I can.
Here is NI’s initial statement:
Native Instruments centralizes organization and reduces global headcount to focus on platform strategy
Berlin, August 29, 2019 – Native Instruments, the world’s leading provider of software and hardware for computer-based music production, announced today a plan to centralize their global business operations, which includes a headcount reduction of 20% across all locations. The key reason for this difficult decision is to create the right organizational setup to focus on the development of a new, unified and fully integrated platform on which the company’s entire portfolio of products and services will be available next year. This change comes despite growing revenues in 2018 and the first half of 2019, but as a response to an increasing cost structure due to the company’s previous divisional setup and multi-brand approach.
“Today is a very emotional day for the Native community. We’ve been driving innovation in music creation since the 1990s. First through software instruments, then by expanding to an integrated ecosystem with complementing hardware and now by creating a unified platform experience for the modern music producer,” said Daniel Haver, the company’s CEO and co-founder. “To make this transformation successful, we needed to adapt our strategy, including a centralized functional setup that can support our vision of ‘One Native’. Unfortunately, this also means we had to make some tough decisions and part ways with a number of employees. This has been the hardest part of this transformation,“ he added.
Global headcount reduction of 20%
As a consequence of the company’s newly centralized organization to focus on its future strategy, Native Instruments had to make the difficult decision to reduce its workforce by around 100 employees across all sites. With most of the affected employees located at the company’s headquarters in Berlin, the departments that were impacted by the consolidation include Sales & Distribution, Marketing & Product Management, Administration and Engineering. All employees were informed about these changes on Thursday, August 29, 2019. The company regrets the impact this has on their employees, their families and the community. In addition to severance packages and outplacement services, Native Instruments has also established contacts with other Berlin-based companies that are currently looking for highly qualified personnel.
“This was the most difficult decision we had to make in our entire history, as our past successes have been enabled by the work of some of the best and most passionate people in the music industry. We thank all employees for their commitment, hard work, and their high degree of loyalty to Native Instruments. We are fully committed to doing all we can to take care of our employees impacted during this difficult time,” said Daniel Haver.
New platform starting in 2020
Recognizing changing customer behaviors worldwide, the aim of focusing on a unified platform strategy is to create an expandable commercial and technological basis for future growth in the digital music production area. For that, a new platform is currently being developed with the goal of offering new ways of accessing the company’s core products and services, as well as complementary ones from third-parties. The centralized platform will also include the company’s expanded portfolio of loops and samples, which is currently part of sounds.com, and will launch in 2020. The company’s previous divisional structure, functional and brand silos, did not allow for a successful implementation of this strategy up until this point.
“Customers today are expecting a seamlessly integrated experience when consuming and accessing creative goods and services. We are confident that we can offer music producers worldwide a unique and premium experience by connecting our existing ecosystem of award-winning software and hardware to a centralized online service,” said Mate Galic, Native Instruments’ Chief Innovation Officer and President. “In the past, we expanded in different product lines, which was also reflected in our organizational structure. Our platform vision, however, requires a much more collaborative approach, having all parts of the company work together towards one common goal.”
DIY marketplace Etsy has announced plans for a massive $275 million acquisition of used music instrument market Reverb.com. That’s likely to turn heads both in online retail and musical instruments.
As reported by VentureBeat, the deal has an approximate $275 million value, in cash, as the NYC-based Etsy buys out Chicago’s Reverb.com.
It’s a massive bet on the value of the used market. It might prove risky, too. Facebook is pushing its own market offerings, leveraged by its epic (and politically controversial) power of user data and the market. And it seems the market is vulnerable to music store giants (like Thomann in Europe) who can offer used product (and service) alongside new distribution.
Etsy does seem up to the challenge. The company has some real experience in handling fragmented markets, and in building relationships with sellers – a key to this business. The one sure-fire outcome for the moment is that Etsy and Reverb appear to score some serious cash – Reverb, when the deal is expected to close later in 2019, and Etsy, whose stock price was flying high already and gets pushed still higher with this deal.
If it worries anyone, this could pose concern for independent manufacturers. Eurorack makers have long expressed a fear that a modular “bubble” could make it difficult for new products to compete with used equivalents. The modular market is presumed to be especially vulnerable to that phenomenon, because if modular makers don’t continue to find new customers, the amount of used gear begins to accumulate faster than would-be customers for the new stuff. At least modular buyers have proven deep pocketed and interested in new stuff. The desktop market faces the dual pressure of loads of used gear and cheap mass-market products and clones. I wouldn’t panic yet, though – this danger exists with or without Etsy and Reverb. And I’m personally glad at least music gear finds new love rather than winding up in landfills like so many electronic items.
Reverb already offers the potential of being a storefront for music gear – something Etsy has tried for musical instrument makers on and off over the years. (See my personal notes at the end.) So it might even be that Reverb will court these very manufacturers outside of the usual gear distribution channels.
I think the real trends to watch are how investors are valuing areas of musical instruments, and just a importantly, where value in the communications chain may lie. Facebook at the moment is poised to dominate musical life and the business transactions around it, from artists posting Instagram pics to Facebook Groups to its own marketplace. That includes intangible value (artist buzz) and tangible (if you buy a used synth directly through Facebook, which is possible already).
Reverb might advertise heavily on Facebook-owned properties to acquire customers, but they’ve also built a sticky destination site all their own. They’ve added significant editorial content and community features around the marketplace, too. Indeed, if independent music tech publishing has declined, the integrated editorial-marketplace seems to be the wave of the future. Etsy says they will (wisely) continue to operate Reverb independently as a site and brand, serving an audience of musicians whose interests are far from the “put a bird on it” ethos of Etsy. Even as Reverb advertises on Facebook- and Google-owned properties, they have an opportunity to create value chains for musicians outside of the dominance of those two companies, whether individual musicians, DIY enthusiasts, or smallish manufacturers.
The issue with this as with all acquisitions of this size is whether the hunger for growth will outstrip the actual demand for the product, and whether Reverb.com will continue to innovate post-acquisition. (I’ll try to talk to Reverb’s management during the transition, once things settle down. I did read in one report that there will be a new CEO at Reverb, but I’ve yet to confirm that.) It’s certainly a big moment in our industry, though. And it seems a smart move, if an awfully big number (without knowing the existing data or projections behind that).
CDM has some history with Etsy, going back to their early days. I knew co-founder Jared Tarbell first through his generative creative coding before his Etsy adventure in the really early days, and I started the MusicMakers series in Etsy’s offices in Brooklyn with partner MAKE Magazine. (We re-dubbed the series Handmade Music for a time, and Etsy stayed involved until I relocated to Berlin.) We even had some attendees get stuck in Etsy’s antiquated elevator during an event. Bre Pettis showed up before starting MakerBot, known mainly to us as a vlogger who worked with Etsy, back when “vlogger” was a word because YouTube wasn’t yet dominant.
None of this is terribly relevant, other than to say times have changed. And it’s also safe to say the “maker movement” isn’t exactly at a high point. Maker Media, of Make Magazine and Maker Faire, abruptly imploded this year, though founder Dale Dougherty is working to get some version of the community back. Etsy, too, has refocused as a market for vintage and personalized products, not just handmade.
The ongoing question for CDM and friends – and one I’d love to hear from you about – is how best to support the DIY end of this spectrum. I think ultimately it’s a distinct niche from what Etsy or Reverb – or perhaps even MAKE – were able to serve.
Focusrite went public in 2014, but this week brings its first major acquisition – and it’s a big deal. Monitor maker ADAM from Berlin joins the UK’s Focusrite / Novation / Ampify.
Publicly traded companies and fast growing business empires have a bit of a challenge in the music tech business – music creation is still specialized and places a high standard on quality. So ADAM is at least encouraging as a choice; the boutique maker is highly respected and many studio swear by their monitors.
The ongoing question here is really growth, but of course revenue growth isn’t necessarily limited to downmarket tools with thin margins. ADAM’s strength is building an upmarket, boutique product for music makers. And while the studio in the traditional sense has been in decline, “studio” as in independent producers has potential. Just as Eurorack and boutique synths have proven in the electronic arena, that growing population does have a portion of the market who will pay a premium for perceived quality – just as every market has luxury.
That may seem obvious, but I’ve been surprised that so many conversations about growth in our industry are focused at the low end or beginners. The problem with that commodity end is that competition gets fierce. I find it especially strange, because by contrast, you wouldn’t expect the automotive industry to focus exclusively on cheap cars and first-time buyers. Auto is perfectly comfortable describing engines as things only engineers understand, and marketing that specialization. And they make products for specific, high-end customers (think Formula One racing). And that in turn drives interest across the market, because it strengthens the brand (think Mercedes-Benz Group). But I digress.
Maybe the greater ambition in this acquisition is the talk of the two companies working together. I think it’s fair to be skeptical any time there’s talk of that in acquisitions – the reality is often far tougher. It’s unclear for now what Focusrite Group imagine that collaboration to look like, on what products, or if they’ll be able to deliver. But here’s Focusrite’s CEO Tim Carroll on that topic:
“ADAM Audio is undeniably a leader in the field of electroacoustics. The A7Xs and S3s have become standards in recording spaces across the globe. Even so, I know the team have no interest in resting on their laurels. We need to ensure they receive all the support they require to continue raising the sonic bar. That our two companies are so aligned from a cultural perspective reassures me that, as we increasingly work together, great things will happen. With so much expertise between us in acoustics, sound reproduction, DSP, and control, the opportunities are abundant to refine recording and production workflows together.”
For the time being, ADAM Audio stay in Berlin and keep Christian Hellinger in charge. The 20 year-old company are known for their A7X and S3, and now cover a range of potential markets with the T, AX, and S Series.
I’d actually love to see the kind of collaboration described above – and I’m sure the Focusrite Group engineers would love a trip to Berlin. (Come visit, please!) But while it’s not emphasized in the press release, I imagine the immediate benefit to ADAM will be Focusrite’s international marketing operation, which looks increasingly global with LA and Hong Kong alongside the UK. ADAM Audio already spans the Asian manufacturing world (Dongguan), Berlin’s ongoing dominance in engineering, and then the ever-lucrative US market – Nashville.
And oh yeah – Focusrite is traded on the AIM market, London Stock Exchange. So I imagine some reader of this site just had your stock go up. (No disclosure needed here for me; I would make that statement if I did.)
MakeProAudio, the “you make audio gear and IoT-age platform company for all things audio to automation, has announced a novel approach to the customer manufacturer relationship by offering lucrative Membership Stakes to accelerate company growth and groundbreaking platform initiatives. “With our open modular system for pro audio and control solutions, users and developers are integral […]
Pioneer and Beatport this week announced new streaming offerings for DJs. And then lots of people kind of freaked out. Let’s see what’s actually going on, if any of it is useful to DJs and music lovers, and what we should or shouldn’t worry about.
Artists, labels, and DJs are understandably on edge about digital music subscriptions – and thoughtless DJing. Independent music makers tend not to see any useful revenue or fan acquisition from streaming. So the fear is that a move to the kinds of pricing on Spotify, Amazon, and Apple services would be devastating.
And, well – that’s totally right, you obviously should be afraid of those things if you’re making music. Forget even getting rich – if big services take over, just getting heard could become an expensive endeavor, a trend we’ve already begun to see.
So I talked to Beatport to get some clarity on what they’re doing. We’re fortunate now that the person doing artist and label relations for Beatport is Heiko Hoffmann, who has an enormous resume in the trenches of the German electronic underground, including some 17 years under his belt as editor of Groove, which has had about as much a reputation as any German-language rag when it comes to credibility.
Beatport LINK: fifteen bucks a month, but aimed at beginners – 128k only. Use it for previews if you’re a serious Beatport user, recommend it to your friends bugging you about how they should start DJing, and otherwise don’t worry about it.
Beatport CLOUD: five bucks a month, gives you sync for your Beatport collection. Included in the other stuff here and – saves you losing your Beatport purchases and gives you previews. 128k only. Will work with Rekordbox in the fall, but you’ll want to pay extra for extra features (or stick with your existing download approach).
Beatport LINK PRO: the real news – but it’s not here yet. Works with Rekordbox, costs 40-60 bucks, but isn’t entirely unlimited. Won’t destroy music (uh, not saying something else won’t, but this won’t). The first sign of real streaming DJs – but the companies catering to serious DJs aren’t going to give away the farm the way Apple and Spotify have. In fact, if there’s any problem here, it’s that no one will buy this – but that’s Beatport’s problem, not yours (as it should be).
WeDJ streaming is for beginners, not Pioneer pros
This first point is probably the most important. Beatport (and SoundCloud) have each created a subscription offering that works exclusively with Pioneer’s WeDJ mobile DJ tool. That is, neither of these works with Rekordbox – not yet.
Just in case there’s any doubt, Pioneer has literally made the dominant product image photo some people DJing in their kitchen. So there you go: Rekordbox and and CDJ and TORAIZ equals nightclub, WeDJ equals countertop next to a pan of fajitas.
So yeah, SoundCloud streaming is now in a DJ app. And Beatport is offering its catalog of tracks for US$14.99 a month for the beta, which is a pretty phenomenally low price – and one that would rightfully scare labels and artists.
But it’s important this is in WeDJ as far as DJing. Pioneer aren’t planning on endangering their business ecosystem in Rekordbox, higher-end controllers, and standalone hardware like the CDJ. They’re trying to attract the beginners in the hopes that some of those people will expand the high end market down the road.
By the same token, it’d be incredibly short-sighted if Beatport were to give up on customers paying a hundred bucks a month or so on downloads just to chase growth. Instead, Beatport will split its offerings into a consumer/beginner product (LINK for WeDJ) and two products for serious DJs (LINK Pro and Beatport CLOUD).
And there’s reason to believe that what disrupts the consumer/beginner side might not make ripples when it comes to pros – as we’ve been there already. Spotify is in Algoriddim’s djay. It’s actually a really solid product. But the djay user base doesn’t impact what people use in the clubs, where the CDJ (or sometimes Serato or TRAKTOR) reign supreme. So if streaming in DJ software were going to crash the download market, you could argue it would have happened already.
That’s still a precarious situation, so let’s break down the different Beatport options, both to see how they’ll impact music makers’ business – and whether they’re something you might want to use yourself.
Ce n’est pas un CDJ.
Beatport LINK – the beginner one
First, that consumer service – yeah, it’s fifteen bucks a month and includes the Beatport catalog. But it’s quality-limited and works only in the WeDJ app (and with the fairly toy-like new DDJ-200 controller, which I’ll look at separately).
Who’s it for? “The Beginner DJs that are just starting out will have millions of tracks to practice and play with,” says Heiko. “Previously, a lot of this market would have been lost to piracy. The bit rate is 128kbs AAC and is not meant for public performance.”
But us serious Beatport users might want to mess around with it, too – it’s a place you can audition new tracks for a fairly low monthly fee. “It’s like having a record shop in your home,” says Heiko.
Just don’t think Beatport are making this their new subscription offering. If you think fifteen bucks a month for everything Beatport is a terrible business idea, don’t worry – Beatport agree. “This is the first of our Beatport LINK products,” says Heiko. “This is not a ‘Spotify for dance music.’ It’s a streaming service for DJs and makes Beatport’s extensive electronic music catalog available to stream audio into the WeDJ app.” And yeah, Spotify want more money for that, which is good – because you want more money charged for that as a producer or label. But before we get to that, let’s talk about the locker, the other thing available now:
WeDJ – a mobile gateway drug for DJs, or so Pioneer hopes. (NI and Algoriddim did it first; let’s see who does it better.)
Beatport CLOUD – the locker/sync one
Okay, so streaming may be destroying music but … you’ve probably still sometimes wanted to have access to digital downloads you’ve bought without having to worry about hard drive management or drive and laptop failures. And there’s the “locker” concept.
Some folks will remember that Beatport bought the major “locker” service for digital music – when it acquired Pulselocker. [link to our friends at DJ TechTools]
Beatport CLOUD is the sync/locker making a comeback, with €/$ 4.99 a month fee and no obligation or contract. It’s also included free in LINK – so for me, for instance, since I hate promos and like to dig for my own music even as press and DJ, I’m seriously thinking of the fifteen bucks to get full streaming previews, mixing in WeDJ, and CLOUD.
There are some other features here, too:
Re-download anything, unlimited. I heard from a friend – let’s call him Pietro Kerning – that maybe a stupid amount of music he’d (uh, or “she’d”) bought on Beatport was now scattered across a random assortment of hard drives. I would never do such a thing, because I organize everything immaculately in all aspects of my life in a manner becoming a true professional, but now this “friend” will easily be able to grab music anywhere in the event of that last-minute DJ gig.
By the same token you can:
Filter all your existing music in a cloud library. Not that I need to, perfectly organized individual, but you slobs need this, of course.
Needle-drop full previews. Hear 120 seconds from anywhere in a track – for better informed purchases. (Frankly, this makes me calmer as a label owner, even – I would totally rather you hear more of our music.)
There should be some obvious bad news here – this only works with Beatport purchased music. You can’t upload music the way some sync/locker services have worked in the past. But I think given the current legal landscape, if you want that, set up your own backup server.
What I like about this, at least, is that this store isn’t losing stuff you’ve bought from them. I think other download sites should consider something similar. (Bandcamp does a nice job in this respect – and of course it’s the store I use the most when not using Beatport.)
The new Beatport cloud.
Beatport LINK Pro – what’s coming
There are very few cases where someone says, “hey, good news – this will be expensive.” But music right now is a special case. And it’s good news that Beatport is launching a more expensive service.
For labels and artists, it means a serious chance to stay alive. (I mean, even for a label doing a tiny amount of download sales, this can mean that little bit of cash to pay the mastering engineer and the person who did the design for the cover, or to host a showcase in your local club.)
For serious users using that service, it means a higher quality way of getting music than other subscription services – and that you support the people who make the music you love, so they keep using it.
Or, at least, that’s the hope.
What Beatport is offering at the “pro” tiers does more and costs more. Just like Pioneer doesn’t want you to stop buying CDJs just because they have a cheap controller and app, Beatport doesn’t want you to stop spending money for music just because they have a subscription for that controller and app. Heiko explains:
With the upcoming Pioneer rekordbox integration, Beatport will roll out two new plans – Beatport LINK Pro and Beatport LINK Pro+ – with an offline locker and 256kbps AAC audio quality (which is equivalent to 320kbps MP3, but you’re the expert here). This will be club ready, but will be aimed at DJs who take their laptops to clubs, for now. They will cost €39,99/month and €59,99/month depending on how many tracks you can put in the offline locker (50 and 100 respectively).
You’ll get streaming inside Rekordbox with the basic LINK, too – but only at 128k. So it’ll work for previewing and trying out mixes, but the idea is you’ll still pay more for higher quality. (And of course that also still means paying more to work with CDJs, which is also a big deal.)
And yeah, Beatport agree with me. “We think streaming for professional DJ use should be priced higher,” says Heiko. “And we also need to be sure that this is not biting into the indie labels and artists (and therefore also Beatport’s own) revenues,” he says.
What Heiko doesn’t say is that this could increase spending, but I think it actually could. Looking at my own purchase habits and talking to others, a lot of times you look back and spend $100 for a big gig, but then lapse a few months. A subscription fee might actually encourage you to spend more and keep your catalog up to date gig to gig.
It’s also fair to hope this could be good for under-the-radar labels and artists even relative to the status quo. If serious DJs are locked into subscription plans, they might well take a chance on lesser known labels and artists since they’re already paying. I don’t want to be overly optimistic, though – a lot of this will be down to how Beatport handles its editorial offerings and UX on the site as this subscription grows. That means it’s good someone like Heiko is handling relations, though, as I expect he’ll be hearing from us.
Really, one very plausible scenario is that streaming DJing doesn’t catch on initially because it’s more expensive – and people in the DJ world may stick to downloads. A lot of that in turn depends on things like how 5G rolls out worldwide (which right now involves a major battle between the US government and Chinese hardware vendor Huawei, among other things), plus how Pioneer deals with a “Streaming CDJ.”
The point is, you shouldn’t have to worry about any of that. And there’s no rush – smart companies like Beatport will charge sustainable amounts of money for subscriptions and move slowly. The thing to be afraid of is if Apple or Spotify rush out a DJ product and, like, destroy independent music. If they try it, we should fight back.
Will labels and artists benefit?
If it sounds like I’m trying to be a cheerleader for Beatport, I’m really not. If you look at the top charts in genres, a lot of Beatport is, frankly, dreck – even with great editorial teams trying to guide consumers to good stuff. And centralization in general has a poor track record when it comes to underground music.
No, what I am biased toward is products that are real, shipping, and based on serious economics. So much as I’m interested in radical ideas for decentralizing music distribution, I think those services have yet to prove their feasibility.
And I think it’s fair to give Beatport some credit for being a business that’s real, based on actual revenue that’s shared between labels and artists. It may mean little to your speedcore goth neo-Baroque label (BLACK HYPERACID LEIPZIG INDUSTRIES, obviously – please let’s make that). But Beatport really is a cornerstone for a lot of the people making dance music now, on a unique scale.
The vision for LINK seems to be solid when it comes to revenue. Heiko again:
LINK will provide an additional revenue source to the labels and artists. The people who are buying downloads on Beatport are doing so because they want to DJ/perform with them. LINK is not there to replace that.
But I think for the reason I’ve already repeated – that the “serious” and “amateur”/wedding/beginner DJ gulf is real and not just a thing snobs talk about – LINK and WeDJ probably won’t disrupt label business, even that much to the positive. Look ahead to Rekordbox integration and the higher tiers. And yeah, I’m happy to spend the money, because I never get tired of listening to music – really.
And what if you don’t like this? Talk to your label and distributor. And really, you should be doing that anyway. Heiko explains:
Unlike other DSP’s, Beatport LINK has been conceived and developed in close cooperation with the labels and distributors on Beatport. Over the past year, new contracts were signed and all music used for LINK has been licensed by the right holders. However, if labels whose distributors have signed the new contract don’t want their catalog to be available for LINK they can opt out. But again: LINK is meant to provide an additional revenue source to the labels and artists.
Have a good weekend, and let us know if you have questions or comments. I’ll be looking at this for sure, as I think there isn’t enough perspective coming from serious producers who care about the details of technology.
SoundCloud has a new pitch to creators: upload your music not just to SoundCloud, but to all major music services, too. Distribution is launching in a new beta as part of Premier service, and the terms look appealing.
Okay, first, to understand what digital distribution is, let’s go back in time. Digital music for many years meant primarily CDs and … well, piracy, despite some early (fairly horrible) stores. Then along came Apple’s iTunes Music Store. When it launched, you needed to have a label deal of some kind to make your music available; Apple dealt with those labels much as brick and mortar stores deal with labels and distributors. The first loophole was CDBaby – the name is a reminder that at the time, independent music producers were still largely duplicating releases on CDs. Pay for CDBaby, and you get your music on iTunes for sale.
Now, the landscape is different. Apart from DJs and specialists, most people get their music through streaming services. But the only major destination where you can upload music directly these days has been SoundCloud (though Apple and Spotify may soon change that).
So if you want your music on other services, you typically sign a distribution deal. Some of these are pay-once or subscription services open to anyone. More traditional distributors require multi-year contracts you can’t get out of – though they may offer personal relationships with curators at online stores, and the promise, at least, of getting you placed as “featured music” or on playlists.
If you just want to get your music out there, the issue is that the distribution costs can actually cost more than you bring in.
SoundCloud’s offering, then, could be at least cheap and convenient. Here’s how it works:
Qualified users with a SoundCloud Pro or Pro Unlimited account can sign up for an open beta right now.
You can select original music to distribute to a range of services, including Amazon Music, Apple Music, Instagram, Spotify, Tencent (the leading Chinese network), and YouTube Music, inside your SoundCloud account.
Then you keep 100% “of your rights” (need to read the fine print on that), plus 100% of distribution royalties from third-party services. There’s no additional cost for distribution.
Most other services either take a cut of royalties, or charge fees for distribution; here, what you’re paying already for your account already covers those costs.
So wait, what’s in it for SoundCloud if you get all the money? It seems the main goal is to attract users to their subscription services and provide monetization options to keep them there. In fact, you don’t have to include your music on SoundCloud or monetize it there if for some reason you don’t want to – like if for some reason you want it just on Apple or just on Spotify or some other combination. SoundCloud hopes you will, though; a spokeperson for the company tells us, “Monetizing tracks through SoundCloud Premier monetization gets creators the best revenue share rate on SoundCloud and fast payouts.”
I suspect SoundCloud does hope to use this offering to help build up their catalog, of course – which makes sense for them. The big challenge SoundCloud’s business faces is, while the service has a lot of original music the likes of Spotify and Apple lack, their catalog still lags the major music a lot of people want to listen to. And they’re in the unique position of wanting to attract both creators and listeners. That could be good in the long run for us as creators, but so far it’s meant that we tend to use SoundCloud as a way of building audience for other services (and for a lot of us, trying to convince people to buy downloads or physical music).
SoundCloud’s creator-facing tools are essentially unparalleled; the limited tools on Spotify and Apple are fairly weak and confusing. The real pitfalls here aren’t so much about SoundCloud as they are about streaming – streaming revenue for a lot of smaller artists is disappointing or even nonexistent. And this won’t help your music get playlisted or found on those services; it’ll just get you over the initial barrier of distribution.
In other words, I think generally the pricier services for distribution that just dump music on streaming are going to get run out of business, in favor of offerings like SoundCloud’s. But that leaves opportunities for distributors who do work on promotion, as well as the “we’re not dead yet” strangeness of cassette tapes and vinyl still being viable distribution formats in 2019.
Do you qualify?
The open beta requires a SoundCloud Pro / Pro Unlimited subscription, and you have to be an adult (18+ or age of majority).
You have to control all the rights to your music. So if you’ve signed music to a label, for instance, or you have an existing distribution deal, you can’t upload even your own music – technically, you’ve signed away the right to do so.
You also can’t have any copyright strikes against you on SoundCloud. That’s a dicey issue, I know, though SoundCloud points CDM readers to email@example.com if you’ve got a question about copyright policy or you have a strike against you.
And you need at least 1000 plays in countries that have advertising available – US, UK, Canada, Australia, France, Germany, Ireland, The Netherlands, New Zealand.
It seems you don’t necessarily have to be living in one of those countries, however.
When do you get data or get paid?
This is the part I really like.
You get monthly reporting of numbers from all the services where you’re distributing.
There are monthly royalty payments, with no minimums.
This is a big break from the truly terrible way the industry often operates, which is to lock you into long-term contracts, take a big slice of the money you’ve earned, and then make data hard to retrieve and slow, and hold up what money is left based on weird payment schedules or minimum thresholds.
So the appeal of just logging into a SoundCloud account and taking care of all of this – leaving time for you to go figure out who to talk to to make your music popular – that’s hugely appealing.
There’s a separate music ecosystem of DJ services like Beatport and Traxsource, plus of course the isolatedbut artist-friendly world of Bandcamp. I hope to check in with both those services soon.
And there will still be room for distributors who offer more advanced customer service and relationships with those outlets, or bundle distribution with other services (including label management).
For everything else, though, the new SoundCloud offering looks like a significant breakthrough. I’ll be testing the beta, for my own music – even though the label we operate, Establishment, has a few weeks left on one of those terrible contracts I mentioned. Let us know if you have questions about this and we can ask our Berlin neighbors at SoundCloud.
Streaming is coming to DJing. Last week saw new announcements from Tidal, SoundCloud, Serato, and several other software makers. But progress is uneven – expect these features at first to be primarily about discovery, not what you do at a gig.
Serato announced support for SoundCloud Go+ and TIDAL premium and HiFi subscriptions in forthcoming DJ Lite and DJ Pro releases. They didn’t post even a news item, beyond sending a press release, but TIDAL added this minisite:
First, before talking about the technology and the deals here, we need to first talk about what “DJ” means. Across that spectrum, we can talk about three really different poles, as far as use cases:
Wedding DJs (read: people taking requests). This is the big one. You can tell, because when streaming site Pulselocker shut down, there were screams from people who were playing wedding gigs and suddenly lost access to their music. This isn’t just about a technological shift, either. As American music markets have fragmented and mainstream pop music has lost its hegemony – and as DJing and music consumption have become more global – the amount of music people might request has grown, too.
Whatever you think of wedding DJs, you can imagine weddings as a place where global cultural and technological changes are radical and inseparable. And that’s good, because I don’t know about you, but if I have to hear “At Last” one more time, I may try to drown myself in a punch bowl.
If you have to take requests, access to all music becomes a need, not a luxury.
DJs playing hits. There’s also a club DJ crowd looking for big hits, too, which tends to overlap in some ways with the wedding DJs – they’re going for popularity over digging deep in a particular genre. That means that certain big hits that a particular streaming site has (cough, Tidal) become relevant to both these groups. (I was recently schooled on the importance
Underground DJs. More at the CDM end of the pond, you’ve got DJs who are trying to discover new music. Tidal might not be so relevant here, but SoundCloud sure is.
If you routinely tab back and forth between SoundCloud and your DJ app, integrating the two might have appeal – even for underground digital diggers.
The question of what DJs in each of these groups would want to do with streaming also varies. There’s discovery – some people are looking to play tracks on their digital DJ decks without first downloading, or for integration of streaming sites. There’s playing in actual gigs, with a live Internet connection. Then there’s playing gigs where you don’t have an Internet connection – more often the norm – where you might want tracks from a streaming collection to be synced or cached to storage.
How the DJ streaming landscape just shifted
Amsterdam Dance Event last week tends to center on the business of electronic dance music, so it was a stage for some of the players to crow about new achievements – even making some of those announcements before the solution is fully available.
In particular, DJ software maker Serato and streaming site SoundCloud were vocal about their coming solutions.
These solutions are online only. Let’s start with the big disclaimer. Downloads are here to stay for now, because these services work only when online, and standalone decks are left out.
Streaming tracks are fully integrated – I’ve confirmed that at least with Serato, who say when you’re connected, the tracks cache and perform just like locally stored tracks. But that’s when you have an Internet connection.
Pulselocker, the service specifically focused around this idea, had offered the ability to store tracks locally. None of these integrations offers offline access, at least initially. I’ve been told by Serato that if you lose an Internet connection mid-track, you can at least continue playing that track; you just lose access to other streaming content.
Wedding DJs or some clubs where you can rely on an Internet connection I expect will take advantage of streaming functionality right away, for DJs who take requests. For DJs who prepare music in advance, though, it’s probably a deal killer.
(Pulselocker was acquired by Beatport earlier this year, a sign that the big players were making their moves.)
Once upon a time, there was Pulselocker. But the service was acquired by Beatport, and nothing yet offers offline functionality as it did. (Blame licensing?)
SoundCloud and Serato are looking to get ahead of the curve – while we wait on Beatport and Pioneer. SoundCloud is partnering with all the major software vendors. (Only Algoriddim, whose djay product line for desktop and mobile is already integrated with Spotify, was missing.)
And Serato are leading the way with Tidal and SoundCloud integration, replacing their existing Pulselocker functionality.
Timeframe for both: “coming months.”
There’s reason to pre-announce something here, though, which is to try to steal some thunder from some market leaders. Beatport and Pioneer are of course dominant players here. We know both are readying solutions – Beatport making use of that aforementioned Pulselocker acquisition, presumably. We just don’t know when those solutions will become available; Pioneer CDJ hardware in particular is likely fairly far into the future.
Just don’t underestimate the Serato/Tidal combo, or even Serato/SoundCloud. Those are big partnerships for the US market and genres like hip hop, both of which are big and growing.
DJ compatibility is a way to sell you subscriptions. Yes, artists and labels get paid, but there’s another factor here – DJing is becoming so widespread that it’s a way to upsell music subscriptions. DJing really is music consumption now.
Use Traktor, Serato, Virtual DJ, Mixvibes, and others? SoundCloud hopes you’ll buy a top-tier SoundCloud Go+ subscription.
Using Serato, and want to play some top hits in high quality? Tidal can offer Premium (AAC) or HiFi (including lossless FLAC and ALAC streaming) tiers.
In case you doubt that, both services will work with full integration using just a 30-day trial.
Yes, streaming DJs could represent a new revenue source. This is one potential bright spot here on the creator side. Assuming you can reach DJs who might not have purchased downloads on Bandcamp, Beatport, and the like, the streaming sites will divvy up those subscription fees and calculate revenue sharing for track plays by DJs.
What does all this mean?
It’s easy to assume this is all meaningless. Serious DJs playing big club and festival gigs – or even underground DJs playing with dodgy Internet connections and meticulously organized USB thumb drives of USB – you’re obviously not going anywhere near this when you play.
And those DJs taking requests at weddings and playing the latest dancefloor megahits, well, that’s relevant to you only if you’re producing those kinds of hits.
But there remains some potential here, even with these launch offerings, whenever they do materialize.
For all but the most specific boutique labels and artists, I think most music creators are trying to maximize exposure and squeeze revenue wherever they can. A whole lot of those labels do put up their music through distribution, meaning you can download directly on Bandcamp, for instance, but you can also stream catalogs on Spotify and iTunes. (Anyone who’s doing digital distribution has likely seen long lists of weird streaming and download sites you’ve never even heard of, but where your music gets dumped and … eventually ripped and put up on pirate music sites, too.)
If this gets more people on premium subscriptions, there’s hope. It’s better than people listening to your music on YouTube while you get paid next to nothing.
The real question here is how streaming integration looks. If discovering new music is really what this is about – at least until fast Internet becomes more ubiquitous – then the integrations need to actually make it easy to find music. That shouldn’t just be about some automated recommendation algorithm; it will require a whole new approach to DJ software and music tools. Or at the very least, these tools should make you want to sit at your DJ rig with some friends, punch up some new artist names and find tracks. They should be as appealing as going to a record store, thumbing through records, and putting them on turntables – in a virtual sense, anyway.
And what about ownership? I think it’s important for DJs to be able to differentiate between always-on access to all music everywhere, and their own music collection, even if the collection itself is virtual.
Why not put SoundCloud streaming in your DJ app, but offer one-click buying to add downloads?
Or why not use the cloud as a way to sync music you’ve already bought, rather than make it exclusively an overwhelming supply of music you don’t want, which you lose when you lose Internet access?
At the very least, labels who are already squeezed as it is are unlikely to savor the thought of losing download revenue in exchange for hard-to-track, hard-to-predict subscriptions. $10 a month or so seems utterly unsustainable. A lot of labels already barely break even when they pay for even basic PR and mastering services. Imagine the nightmare of having to invest more just to be found on streaming services, while earning less as flat fee subscriptions are divvied up.
There’s an idea here, but it’s far from being ready. For now, it seems like the best strategy is to keep your catalogs up to date across services, keep building close relationships with fans, and … wait and see. In a few months we should see more of what these offerings look like in practice, and it seems likely, too, we’ll know more about where Pioneer, Beatport, and others plan to go next, too.