Trent Reznor has been keeping very busy indeed; promoting How To Destroy Angels’ debut album (and showing how to destroy a smart-ass fanboy in the process); announcing the return of Nine Inch Nails in an upcoming world tour 2014, including Japan’s 2013 Fuji Rock Festival, which puts NIN in contention for this year’s Splendour In The Grass, and somehow finding time to jam with Queens Of The Stone Age frontman Joshua Homme and Foo Fighter Dave Grohl, for the latter’s rockumentary Sound City: Real To Reel.
While he’s been keeping his music fans sated, Reznor has also kept the wider technology industry guessing in his role as the creative director of the new music streaming service from high-end headphone makers Beats By Dre.
As previously detailed, Reznor is the Chief Creative Officer of the music streaming project whose codename was simply ‘Daisy’, then became ‘Beats Music’, but now it’s gone back to its flower-named working title with the news that the on-demand music service has received a $60 million injection from investors to spin-off from Beats Electronics and become its own entity.
As TechCrunch reports, a written release from Beats issued earlier this month confirms that ‘Daisy’ is set for a launch in “late 2013” and has become its own standalone company after it received the support of James Packer, media mogul heir to Kerry Packer, and Warner Music owner and billionaire Len Blavatnik, who are among a group who have invested $60 million in ‘Daisy’.
Blavatnik’s Access Industries, along with Packer, Marc Rowan, and entities affiliated with Lee M. Bass will bring, according to Beats’ statement, “significant expertise in music and subscription business,” to the music streaming project as it spins off from Beats Electronics, taking the assets from Beats’ $14 million acquisition of digital music service MOG last year along with it.
“Beats has the vision, the brand, the management team and now the investor group to effectively change the expectations and experiences of a music subscription service,” said Len Blavatnik in a press release. “I’m looking forward to taking on this exciting challenge together.”
While the investors’ big hopes have been fronted with big money, the impressive team charged with ‘Daisy’ includes Trent Reznor, as Chief Creative Officer, who has been partnered with ‘Daisy’s CEO, former founder of Topspin Media and music industry veteran, Ian Rogers, and the pair have been talking how the music service will revolutionise the industry.“Beats has the vision, the brand, the management team and now the investor group to effectively change the expectations and experiences of a music subscription service” – Len Blavatnik, Access Industries
Reznor first let slip of the secret music streaming project in an interview with The New Yorker late last year, saying that ‘Daisy’ would trump market leaders like Spotify and Pandora. ‘Daisy’ would still use algorithms and “mathematics to offer suggestions to the listener,” said Reznor, but would also “present choices based partly on suggestions made by connoisseurs, making it a platform in which the machine and the human would collide more intimately.”
Catering to listener’s tastes by taking them on customised music ‘journeys’ – as Reznor puts it. “[It’s] like having your own guy when you go into the record store, who knows what you like but can also point you down some paths you wouldn’t necessarily have encountered,” meaning that not only would ‘Daisy’ offer a large music library but – with Reznor’s help – a creative means to navigate and experience it.
“‘Here’s sixteen million licensed pieces of music,’ they’ve said, but you’re not stumbling into anything. What’s missing is a service that adds a layer of intelligent curation,” explains Reznor.
The $60 million investment that sees Daisy become an independent company from Beats will help realise the infrastructure to achieve their ambitious goals in creating a new business model that proverbially wraps Amazon, Ticketek, and iTunes all into a one-stop digital location for musical exploration.
‘Daisy’ allows listeners to search for information related to the music they’re listening to – artists performing nearby, Twitter feeds, album information, ticketing, merchandise sales – all available within thee music service; a ‘marketing funnel’ that would act like an online store that runs in tandem with music streaming.
This creates a business model that depends less on advertising and subscriptions for revenue – something that the likes of Spotify and Deezer rely on in paying hefty licensing fees to major labels despite their looming international expansion and global reach – and instead would look at getting a cut of the profits made from fans purchasing music, concert tickets, merch, or anything else from within ‘Daisy’.with Trent Reznor at the creative helm and now with the bankrolling of $60 million, it now looks that ‘Daisy’ has the serious infrastructure as well as ambitious ideas to become a major competitor.
It’s going to take something special to break the busy digital music streaming service market, market leader Spotify currently possesses 5 million paying subscribers out of an installed user base of 20 million across its 17 territories, while rival Deezer has swiftly been playing catch-up, recently upgrading its API services to include a rewards scheme to its service to its 3 million paid subscribers across 182 countries worldwide.
With numbers like that, ‘Daisy’ is going to need to make a big splash, but with Trent Reznor at the creative helm and now with the bankrolling of $60 million, it now looks that ‘Daisy’ has the serious infrastructure as well as ambitious ideas to become a major competitor, looking to do for streaming services what the iPod did for the mp3 in the last generation
It’s not the only new player in the streaming service game either. There’s the recently launched Songl, a partnership between Aussie network giant Southern Cross Austereo and label majors Sony and Universal, while social media giant Twitter has reportedly bought up Aussie music aggregate We Are Hunted and looking to launch its own music service before the month is out.
Google have also teased plans to announce their own music streaming service, but have drawn criticism from record labels and musicians alike after the revamp of their search engine formula and algorithms last year failed to live up to its promise of discouraging users from visiting illegal music websites.
Meanwhile IT giant Apple are also looking to launch their entry into the market, a Pandora-styled, ad-supported service with the working title of iRadio; but continually runs into stumbling blocks – most recently being criticised by record labels over their proposed royalty rates for the new service.
Just US 6 cents per 100 songs streamed, that’s half of Pandora’s which offers 12 cents per 100 songs streamed, both of which still fall way short of the rate set by the Copyright Royalty Board’s rate of 21 cents per 100 songs streamed.
Which means that the concerns over how much the musicians and artists – the very people who supply streaming services with their content – are getting paid, baffled at the lack of correlation between the music streaming boom, which combined account for 10% of digital music revenues, which as the recent IFPI Digital Music Report showed, have contributed to the first growth in global music sales for the first time since the launch of Napster (that’s 1999 folks).