Thursday, September 12, 2019

Spotify is now a music-making marketplace, as it buys New York-based Soundbetter | Music Business Worldwide

For a long time, we’ve heard Spotify boss Daniel Ek discuss his ambitions for the service to become a true “two-sided marketplace” for artists.

In layman’s terms, this means Spotify wants to provide tools for creators that improve the music they make (and the way they market it), as opposed to just giving fans the means to play their tracks. If Spotify can justifiably charge artists money to use these tools, Ek’s comments lead us to assume, then all the better.

Last year, Ek’s aspiration for Spotify to become “two-sided” in this manner made a big step forward when the firm acquired part of Distrokid, and announced it was becoming a digital distributor in its own right. Those plans have since been scrapped.

Today (September 12), however, Spotify has confirmed that it’s becoming a very different type of “two-sided” proposition – after buying New York-based Soundbetter, a freelance marketplace which allows creators to book exclusive contributions from producers, songwriters, mastering and mix engineers and beyond.

Soundbetter’s database of musicians spans 176 countries worldwide, and amongst its tens of thousands of audio professional members, it boasts “dozens of Grammy Award winners”. The platform has over 180,000 registered users.

(Soundbetter is also, by our calculations, the fifth active MBW online advertiser to be acquired while promoting themselves through our platform in the past three years – not including those who’ve raised investment. Just sayin’.)

Founded in 2012, Soundbetter (and now, by association, Spotify) currently makes money two ways: (i) By charging producers/session musicians etc. $59 per month to be part of its ‘Premium’ tier of freelancers, who are vetted for quality before being able to advertise their wares; and (ii) Charging a “small commission” on every job agreed (and paid for) via its service.

In October last year, Soundbetter announced that its platform had delivered $12m to audio creators in the previous 18 months. That number rises to $19m in the period from SoundBetter’s launch to date.

In a blog post today announcing the deal (the price of which is undisclosed), Spotify said that Soundbetter “enables creative professionals to market their services outside their local network, reach new clients and get work”.

It added: “SoundBetter offers tools for talent discovery, project management, payment facilitation, and a review system that has elevated transparency and trust in a reputation-based music production industry.”

SoundBetter Co-Founder and CEO Shachar Gilad said: “SoundBetter offers the most comprehensive global marketplace for music and audio production professionals for hire in the world along with a member community spanning 176 countries and 14,000 cities worldwide.

“We are excited to benefit from Spotify’s global scale, resources, and vision to expand our network and drive more economic opportunities for artists of all levels.”

Spotify hasn’t yet given specifics on how SoundBetter will be integrated into its platform, but has told media that “SoundBetter will join the Spotify for Artists family”.

It adds: “This acquisition will give the artists and their teams on Spotify for Artists the chance to discover SoundBetter — as a way to find collaborators, produce great music or generate additional income.”

It will be interesting to see how Spotify might further integrate SoundBetter with SoundTrap – the online recording studio / Garageband rival it acquired in 2017.

Spotify for Artists provides services like insights, profile management and promotion tools to the more than 400,000 artists and their teams using the platform today.

Music Business Worldwide


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