- L.A.-based Output, a bootstrapped business founded in 2013 to help musicians overcome writer's block, announced its first ever fundraise, of $45 million from Summit Partners.
- The company serves a range of musicians from hobbyists to professionals, providing them a library of loops and samples that they can then manipulate into unique songs of their own.
- Immediate plans are to nearly double its staff and expand its product platform, with future goals of leading the evolution of digital music production.
Gregg Lehrman was no stranger to music composition. He had worked under world-famous composers such as Hans Zimmer writing music for film and TV and had produced big projects with BMG music publishing. But after setting out on his own, he found himself suffering from writer's block.
So, he said, "I made a piece of software for myself, as a music-maker — with no intention of starting a company."
<p>Lehrman's tool, however, ultimately became a music-tech company called <a href="https://output.com" rel="noopener noreferrer" target="_blank">Output</a>. Based in L.A.'s Chinatown district, its mission is to help people start making music. </p><p>Seven years after it was created, Output has agreed to its first ever fundraise: a $45 million minority-stake investment from Summit Partners. </p><p>"I think there will be drastic changes to come in music creation," Lehrman said, "and we want to be at the forefront of it." </p><p>His investors agree. </p><p>"We believe Output has the potential to reinvent the digital music production market," said Andrew Collins, managing director at Summit and lead investor on the deal. Collins will now join Output's board. </p><p>"The holy grail in digital music-making is to make it super easy for musicians to find content that they like and then make it sound unique to them, and that's exactly what Output does," Collins told dot.LA. </p><p>The list of artists and projects that have used Output is impressive: Kanye West, Coldplay, Justin Bieber and Rihanna among them, as well as the soundtracks to "Game of Thrones," "Stranger Things" and "Black Panther."</p><p>The company broke $1 million in its first year with no advertising, Lehrman said: "just a viral video and a good product." That first product line – which included digital instruments and effects – was software geared toward professional musicians, who purchase it for an upfront fee.</p><p class="shortcode-media shortcode-media-rebelmouse-image">
<img type="lazy-image" data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDU2MjYxMS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY0ODA2MTk1Nn0.ez695VAfdiWMBPUFHory8cfkG7UKwuP6H6xwxjJh9eI/image.jpg?width=980" id="ca6d9" class="rm-shortcode" data-rm-shortcode-id="40f7ba1d62064604d613adb535781d6a" data-rm-shortcode-name="rebelmouse-image">
<small class="image-media media-photo-credit" placeholder="Add Photo Credit...">Courtesy of Output</small></p><p>In 2018, the company added a software-as-a-service (SaaS) product, called Arcade, which became particularly popular among musical hobbyists and digital-music newcomers. For a $10 monthly subscription, users receive access to thousands of loops and samples created by Output, which they can then manipulate and turn into their own unique tracks.<br></p><p>Most customers today use Arcade in conjunction with a digital audio workspace like Logic, Ableton or ProTools. Songwriters, whether professional or amateur, can set their rhythm and key, pull from Output's library of sonic building blocks and mold them like musical clay. Users can also upload and work with their own digital audio files. </p><p>Over time, Output has seen both its user base and its revenue streams shift away from the pros – which Lehrman said is a customer base with a natural limit – and toward hobbyists and digital-production newcomers.</p><p>Arcade, its SaaS product, has seen a 300% increase in monthly recurring revenue over the past 12 months. In just two years, it's grown to generate about 60% of Output's income. </p><p>"In the world of SaaS, it is incredibly rare to see both exceptional growth and capital efficiency." Collins said. "You don't see SaaS software growing this fast, profitably, fully bootstrapped. There's not a lot of those out there."</p><p class="shortcode-media shortcode-media-youtube">
<span style="display:block;position:relative;padding-top:56.25%;" class="rm-shortcode" data-rm-shortcode-id="0058d901c4b625d279b384a338e60ce0"><iframe type="lazy-iframe" data-runner-src="https://www.youtube.com/embed/gSpDqkikaKg?rel=0" width="100%" height="auto" frameborder="0" scrolling="no" style="position:absolute;top:0;left:0;width:100%;height:100%;"></iframe></span>
<small class="image-media media-caption" placeholder="Add Photo Caption...">ARCADE by Output - Walkthrough</small>
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<a href="https://www.youtube.com/watch?v=gSpDqkikaKg" target="_blank">www.youtube.com</a>
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</p><p>As the popularity of Arcade has grown, Output's user base has shifted to about one-third professional musicians, one-fourth digital-music newcomers, and the rest hobbyists who are "really into making [digital] music."<br></p><p>Collins also likes the market tailwinds that Output is riding — namely, the democratization of music ideation and distribution. Output enables musicians to create new sounds, while platforms like Spotify and Soundcloud allow anyone to publish their tunes with just a few clicks. </p><p>The company's technology stack is a combination of digital signal processing (DSP) algorithms written in C++ and some machine learning. "We're going to see that continue to expand," Lehrman said. </p><p>Output also has a line of furniture and hardware products designed to help music-makers build out their home studios. It is currently working with <a href="https://barefootsound.com" rel="noopener noreferrer" target="_blank">Barefoot Sound</a> – which Lehrman called "the Rolls Royce of speakers" – to manufacture a new speaker line. </p><p>With its new cash, Output plans to grow its staff, which currently numbers about 60. "We'll grow to north of 100," Lehrman said. </p><p>It will also build out its product offering, adding new tools to Arcade like digital instruments and expanding its mobile capabilities.</p><p class="shortcode-media shortcode-media-rebelmouse-image image-crop-16x9">
<img type="lazy-image" data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDU2MjYxNS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTY2MTE4MTU2M30.YEw7CRFzIHjvdiSpcHkt28nGzaS6n7SmmYL9Pig51lQ/image.jpg?width=1245&coordinates=292%2C724%2C1%2C40&height=700" id="8f293" class="rm-shortcode" data-rm-shortcode-id="2fd561899f2712747047ae0395de0b36" data-rm-shortcode-name="rebelmouse-image">
<small class="image-media media-caption" placeholder="Add Photo Caption...">Output founder Gregg Lehrman has worked under world-famous composers such as Hans Zimmer writing music for film and TV.</small><small class="image-media media-photo-credit" placeholder="Add Photo Credit...">Courtesy of Output</small></p><p>"We feel strongly we can build a unified ecosystem that once you're in, you're familiar with everything," Lehrman said. "You don't have to learn 100 different applications; it can do 100 different things but you won't feel lost."<br></p><p>Collins pointed to several competitors, including <a href="https://splice.com" rel="noopener noreferrer" target="_blank">Splice</a>, <a href="https://www.landr.com" rel="noopener noreferrer" target="_blank">LANDR</a>, <a href="https://www.izotope.com" rel="noopener noreferrer" target="_blank">iZotope</a> and <a href="https://www.native-instruments.com/en/" rel="noopener noreferrer" target="_blank">Native Instruments</a>, but noted that "nobody else has integrated a very robust curated library of content – sounds, loops, well-organized beats – that musicians can pull from and pull into a workflow engine (the software) and manipulate those sounds to create something that is completely unique." </p><p>Lehrman and Collins separately emphasized the Output team's passion for music. 50 of the 60 employees today make music on a daily basis, Lehrman said. </p><p><a href="https://www.summitpartners.com" rel="noopener noreferrer" target="_blank">Summit</a> primarily focuses on founder-led bootstrapped companies, which it provides with on-demand services like marketing and engineering. </p><p>"Management sets the agenda," Collins said. </p><p>For Lehrman, that'll be to further leverage technology: not to create music itself, but to help people create, just like it helped him overcome his own writer's block those years ago.</p><ul class="ee-ul"></ul><p>"From the first product to the last product," he said, "it's been about helping people be creative."</p>
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Musicians are facing a tough road and the pandemic hasn't made life any easier. But changes are afoot that could help.
A flurry of deals between music copyright owners and a grab bag of online video purveyors may be just the first step in a process that could see "the most important copyright reform since the U.S. passed the Digital Millennium Copyright Act (DMCA) 22 years ago," according to one industry observer.
With it, artists and rights holders should be better positioned to benefit from the growing relevance of music across social media platforms, gaming consoles, virtual gyms and much more.
<p>"There clearly has been a frenzy of activity," David Israelite, president and chief executive of the National Music Publishers' Association (NMPA), a trade association representing American music publishers and songwriters, told dot.LA. </p><p>The changes stem from a battle that has been playing out in Europe that has pitted the creative community against some of tech's giants such as YouTube and Facebook. Those companies depend on content created by artists. </p><p>Last year, the EU adopted tough new copyright laws set to take effect by next June. Though the regulations are facing a slew of challenges, global digital companies are looking to come into compliance to get ahead of the curve, and possibly gain an edge over competitors. </p><p>In August, Santa Monica-based Snap <a href="https://www.bloomberg.com/news/articles/2020-08-03/snap-lands-deals-with-top-music-companies-to-add-songs-to-videos?sref=QjdS4d5U" rel="noopener noreferrer" target="_blank">struck a deal</a> with several big music companies for rights to their music. L.A.-based Triller <a href="https://musically.com/2020/08/13/triller-signs-new-18-month-contract-with-b2b-firm-7digital/" rel="noopener noreferrer" target="_blank">signed a deal</a> with digital music firm 7digital for back-end support on its licensing management. </p><p>In July, <a href="https://musically.com/2020/07/23/tiktok-licensing-us-publishing-nmpa/" rel="noopener noreferrer" target="_blank">TikTok agreed to terms with NMPA</a>, which included a settlement for past violations and an agreement for the future. The Culver City-based company also recently signed deals with indie digital rights managers <a href="https://www.musicbusinessworldwide.com/tiktok-signs-global-licensing-deal-with-indie-label-agency-merlin/" rel="noopener noreferrer" target="_blank">Merlin</a> and <a href="https://www.musicbusinessworldwide.com/tiktok-inks-new-global-deal-with-believe-one-of-the-worlds-biggest-independent-music-companies/" rel="noopener noreferrer" target="_blank">Believe</a>. </p><p>The Believe agreement could be particularly beneficial. It allows the independent artists affiliated with Believe-owned TuneCore to upload tracks onto TikTok, <a href="https://www.musicbusinessworldwide.com/tunecore-offers-free-distribution-to-tiktok/" rel="noopener noreferrer" target="_blank">the company announced last week</a>, potentially bringing them a massive new global audience. </p><p>And in-home fitness, much of which relies on music, is becoming more popular. Apple, for instance, <a href="https://www.apple.com/newsroom/2020/09/apple-fitness-plus-a-personalized-fitness-experience-comes-to-life-with-apple-watch/" rel="noopener noreferrer" target="_blank">recently announced a new subscription fitness program</a> that will involve music. </p><p>The company is "doing it the right way – licensing from the very start," Israelite said. NMPA will undoubtedly be watching other competitors in the fitness space closely.</p><p class="shortcode-media shortcode-media-rebelmouse-image">
<a href="https://images.unsplash.com/photo-1594810205183-18a8b0ce6c13?ixlib=rb-1.2.1&q=80&fm=jpg&crop=entropy&cs=tinysrgb&w=400&fit=max&ixid=eyJhcHBfaWQiOjEzMzIxMn0" target="_blank"><img type="lazy-image" data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDQ0MjY2NC9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYxMjA0MTMyNH0.u9Jw-CUCzI1EEbsUATH9Zlc7u-6jeSKd47QHOKyofjg/image.jpg?width=980" id="57a2e" class="rm-shortcode" data-rm-shortcode-id="4c78ff84a9cd9b9c9061bfb94b7aefd0" data-rm-shortcode-name="rebelmouse-image" /></a>
<small class="image-media media-caption" placeholder="Add Photo Caption..."> European Union member countries will begin enforcing Article 17 by June 2021 that require platforms to make an upfront effort to avoid copyright violation. </small>
<small class="image-media media-photo-credit" placeholder="Add Photo Credit...">
Photo by <a href="https://unsplash.com/@guillaumeperigois?utm_source=RebelMouse&utm_medium=referral">Guillaume Périgois</a> on <a href="https://unsplash.com/?utm_source=RebelMouse&utm_medium=referral">Unsplash</a>
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</p><h2>Why Are All These Deals Happening Now?</h2><p>In the U.S., the current legal framework – which emerged with the DMCA, before social media existed – requires platforms to respond to takedown notices, but not to proactively ensure that songs that show up in user feeds are properly licensed. </p><p>When a song's rights holder issues a takedown notice, it leaves the platform with the choice of obtaining a license, removing the song from the platform (and potentially upsetting users) or possibly getting sued. </p><p>Songs have two kinds of copyright: one for the sound recording, and one for the underlying composition. If a platform is making money in part thanks to a song, both copyrights are relevant. </p><p>Since the performer is the face of the music, the songwriter can sometimes be forgotten. </p><p>"You often see (platforms) start with labels then move on to publishers. Sometimes they won't, though, or sometimes they won't get to the smaller, independent publishers," Israelite added. </p><p>Platforms can also take "Safe Harbor," meaning "what they don't know is on their platform, they're not liable for," said Wilson Hays of L.A.-based <a href="https://pex.com/" target="_blank">Pex</a>, a tech company that monitors audio and visual assets across the web. But by June of next year, <a href="https://www.termsfeed.com/blog/eu-copyright-directive-article-17/" rel="noopener noreferrer" target="_blank">the EU will begin enforcing</a> reforms that require platforms to make an upfront effort to avoid copyright violation. The new E.U. laws won't apply directly to content posted in the U.S., but companies with international operations may find it easier to roll out compliance changes across their global operations rather than taking a piecemeal approach. </p><p>Hays believes that many are already trying to get ahead of Article 17's requirements before the new legislation takes effect. It may behoove them to do so, since <a href="https://www.ipwatchdog.com/2020/06/02/senate-ip-subcommittee-hearing-dmca-reform-grand-bargain-no-longer-working/id=122124/" rel="noopener noreferrer" target="_blank">the U.S. is looking at its own copyright reforms</a>. </p><p>This is a big deal, Hays said. </p><p>"Life will get better come 2021 for independent rights holders because they will have tools at their disposal that will allow them to have more control over their content — on top of generating more revenue," he added. "This attribution will happen prior to upload, allowing any creator to participate in whatever revenue is generated from the get-go."</p><p>Indian social media companies, too, are facing a tougher regime of music copyright enforcement. Several short-form video companies that have gained popularity in the wake of TikTok's ban in the country, including Triller, are <a href="https://musically.com/2020/09/08/t-series-takes-on-indian-short-video-apps-over-music-usage/" rel="noopener noreferrer" target="_blank">facing lawsuits</a>.</p><p class="shortcode-media shortcode-media-rebelmouse-image image-crop-16x9">
<a href="https://images.unsplash.com/photo-1527334919515-b8dee906a34b?ixlib=rb-1.2.1&q=80&fm=jpg&crop=entropy&cs=tinysrgb&w=400&fit=max&ixid=eyJhcHBfaWQiOjEzMzIxMn0" target="_blank"><img type="lazy-image" data-runner-src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDQ0MjY2NS9vcmlnaW4uanBnIiwiZXhwaXJlc19hdCI6MTYzNjQzMDU5NX0.vDamg-65AmkrOVrmYwlAZ8S7Bs8xOEo-6WK7OEk3O2k/image.jpg?width=1245&coordinates=200%2C726%2C274%2C80&height=700" id="fc235" class="rm-shortcode" data-rm-shortcode-id="9c457d1c550e785bd9f69581160fa173" data-rm-shortcode-name="rebelmouse-image" /></a>
<small class="image-media media-caption" placeholder="Add Photo Caption...">Amazon-owned streaming video company Twitch also relies heavily on music.</small>
<small class="image-media media-photo-credit" placeholder="Add Photo Credit...">
Photo by <a href="https://unsplash.com/@casparrubin?utm_source=RebelMouse&utm_medium=referral">Caspar Camille Rubin</a> on <a href="https://unsplash.com/?utm_source=RebelMouse&utm_medium=referral">Unsplash</a>
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</p><h2>Music Has Become a Core Component of Social Media
</h2><p>On YouTube, for example, there are at least 10 seconds of music on 84% of the platform's videos, and over half of all videos on Instagram contain music, according to Hays. Getting their licenses in order allows platforms to let their users include music in their videos without needing to worry they will be taken down.</p><p>Amazon-owned streaming video company Twitch also relies heavily on music. <a href="https://www.billboard.com/articles/business/9431760/jeff-bezos-twitch-music-royalties-artist-rights-alliance-letter" rel="noopener noreferrer" target="_blank">The company has taken heat</a> for Jeff Bezos' <a href="https://www.billboard.com/articles/business/9429423/jeff-bezos-stumped-twitch-royalties-congressional-hearing" rel="noopener noreferrer" target="_blank">poor performance before Congress in July, when representatives asked him</a> if the company pays out royalties. He couldn't say, but the answer is… rarely. </p><p>Platforms that delay getting their licensing deals in order can save themselves cash. They can also avoid navigating the complex copyright landscape. But as they grow, that strategy can come back to bite them. </p><p>"Once they begin generating substantial revenue, then they'll draw the attention of rights holders," said Hays.</p><p>At least part of the change has to do with a growing intolerance by the creative community of extremely wealthy companies using their music without proper licensing. Another driver is the successful, high-profile legal disputes that Israelite said have "sent a message to other companies." </p><p>Peloton, for example, faced a protracted legal battle before <a href="https://www.prnewswire.com/news-releases/nmpa-and-peloton-announce-settlement-of-litigation-joint-collaboration-agreement-301012233.html" rel="noopener noreferrer" target="_blank">agreeing to terms</a> that, as with TikTok, accounted for past violations and set new terms for artists featured on its platform. Such cases, Israelite noted, have "accelerated the choice these companies have to make": Either license properly, or be a copyright infringer, and bear the consequences of receiving takedown notices or getting sued. </p><p>In the wake of Jeff Bezos's embarrassing admission to Congress, Twitch is "starting to become more of a focus for the need for proper licenses," said Israelite. </p><p>As has already been seen in India, TikTok competitors in the short-form video space can't just focus on having the right algorithm and attracting a big user base. Israelite pointed to Triller as an example of a startup that has deals with record labels (for the recordings) and some publishing deals but may soon have to play catch up. </p><p>"I think they'll have to deal with a pretty large problem for a significant number of songs being used without proper permission from publishers." </p><p>Israelite also noted that Twitter has no publishing licenses yet. </p><p>More ripples are likely to emerge wherever music can be found in the digital landscape, from social media to gaming, fitness and beyond. Whether that change comes in the form of lawsuits or more licensing agreements remains to be seen. </p>
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- Super Hi-Fi's AI transports the skills of a trained radio DJ to digital music playlists. Spotify's former head of research Tristan Jehan recently joined as an advisor
- Founded in 2018 by veterans of the digital music business, the company's customers include iHeartMedia, Sonos, Peloton and Octave Music Group
- Its leaders envision a new audio listening experience — where everyone has a personalized, curated playlist, with artful, AI-generated sequences and layers of music, voice clips (e.g. news and podcasts), and branded messaging that drives new revenues to the music industry
Before the beat from "Baby Got Back" that underpins Nicki Minaj's "Anaconda" fades to silence at the song's end, a sound clip pops up, right on rhythm and with a similar energy, telling the listener what streaming service they're listening to. A new track seamlessly takes the baton from the Minaj song before the brief branded message concludes, and continues the upbeat mood as a music bed for a rapid sequence of audio clips – first a voice imploring listeners to get hyped, then a word from Kanye about his interview with Beyoncé, a snippet from that interview, and another in-the-spirit advert – before blending into the intro of the next song, Kanye's "Stronger": all of it interwoven as if it were a single track produced in a recording studio.
<p>
It is the automation of this art, once the preserve of skilled radio DJs, that Super Hi-Fi is bringing to the digital music industry. In doing so, the L.A.-based company thinks it can help music services and artists make more money, and give listeners a new and improved way of experiencing audio.
</p>
<img lazy-loadable="true" src="https://dot.la/media-library/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yNDQyNzEwMi9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY1MTQ5MDE4M30.vHz6v4XR0Q3fab2Ib5MuA3LGG5ijBqHFr8Aotphm46g/image.png?width=980" id="d9148" class="rm-shortcode" data-rm-shortcode-id="7dd17e26f68405e9c7c838980d51ef96" data-rm-shortcode-name="rebelmouse-image" />
Super Hi-Fi's customers include iHeartMedia,
<p>Founded in 2018 by a group of digital music business veterans, with customers that include iHeartMedia and Sonos, SHF recently announced that Tristan Jehan – a pioneer of applying AI and machine learning to music, most recently as head of Spotify's research team – has joined the company as an advisor.</p><p>Streaming, which has been powered in part by Jehan's work on recommendation algorithms, may have saved the music industry from piracy-fueled devastation, but Super Hi-Fi's founders believe companies like Spotify, Apple and Amazon have missed the mark in some important ways.</p><p>"We think digital services forgot that the primary user interface is your eardrums, not your eyeballs," Zack Zalon, Super Hi-Fi's chief executive, told dot.LA.</p><p>As a result, a listener cannot readily distinguish one service from another, he said. Visual branding can help, but especially as smart speakers grow more popular, listeners will have an increasingly difficult time knowing whether they are tuned in to Spotify, Apple Music, Pandora or any other service.</p><p>Zalon and Brendon Cassidy, another co-founder and Super Hi-Fi's chief technology officer, both built digital radio services for CBS, AOL, Yahoo and Cricket Wireless. They contrast the uniformity of streaming services to broadcast radio stations. Two stations in the same city, focusing on the same type of music, still tend to have their own personality, they say.<br></p><p>"It's not just the music," Zalon said. "It's the space between the songs that the radio stations are filling and (thereby) connecting with listeners in an emotional way."<br></p>
<p>
<span style="background-color: initial;">Beyond differentiating the source of the sound, SHF believes that using the space between songs — as radio stations do — can transform the listening experience. Leaving aside stitching in voice clips and layering in all other kinds of audio, they say that even sequencing songs together is fraught with issues.</span>
</p><p>
The two most common types of transitions that digital services use between songs are crossfading and brief pauses.
</p><p>
Pauses create dead air, which iHeartMedia's chief product officer Chris Williams told dot.LA is the "enemy of radio," because it takes listeners out of their flow and puts them in a position to make a decision: namely, whether to keep listening or not. "I want to minimize that," Williams said.
</p><p>
As for crossfading – which Zalon said tends to be applied uniformly across tracks, such as a six-second blend of the end of one song with the start of the next, irrespective of the songs' particulars – it doesn't always work. Williams said crossfading can be done without jarring the user or disrespecting the songs about 50% of the time, and ever less so as
<a href="https://www.economist.com/finance-and-economics/2019/10/05/the-economics-of-streaming-is-changing-pop-songs" rel="noopener noreferrer" target="_blank">longer song lead-ins give way to snappy intros</a> aimed at grabbing listeners' attention from the first note.
</p><p>
"Crossfades create crashes," he said.
</p><p>
A radio DJ, by contrast, is trained to avoid these issues.
</p><p>
"The techniques of trained radio DJs are pretty complicated," Zalon said. "Super Hi-Fi is AI that has all the skills of a trained radio DJ."
</p><p>
This AI is designed to help customers like iHeart provide listeners with custom playlists that artfully blend one song with the next – no matter which song it is – and incorporate additional sonic elements like branded logos, interview clips, voice segments and more to eliminate dead air while respecting the artistry of the underlying songs, and to potentially drive streaming revenues
<a href="https://www.musicbusinessworldwide.com/the-global-recorded-music-industry-generated-over-20bn-last-year-but-streaming-growth-slowed/" rel="noopener noreferrer" target="_blank">back up to or beyond the levels that CDs generated in their peak</a>.
</p><h2>How Does It Work?
</h2><p>
As Super Hi-Fi's first customer, iHeartMedia helped the company fine tune its AI model and algorithms.
</p><p>
"Their pool of some of the world's best music programmers and on-air DJs became in a way like our QA partners," Zalon said.
</p><p>
By now Super Hi-Fi has "fingerprinted" iHeart's entire music catalog – tens of millions of tracks, Williams said – to identify the songs' underlying characteristics: features like volume, rhythm, mood, vocal texture, tempo and more. Lots more.
</p><p>
"The data we have on the music takes up more file space than the music itself," Zalon said.
</p><p>
Super Hi-Fi's AI has also fingerprinted each of iHeart's 700 styles of sonic logo; there's a country version of the "You are listening to iHeart…", a hip-hop version, a reggae version, and so on.
</p><p>
So, too, with any audio file that any customer may want to include in a playlist.
</p><p>
"The real power of the AI is to understand all the content with enough depth to make pretty much any output decision that any service might want," Zalon said.
</p><p>
Results have been good for iHeart. Williams reported that since they've rolled out Super Hi-Fi across their streaming services, the company has seen listening durations double.
</p><p>
"That increases ad impressions," he said. "There are clear business upside reasons beyond aesthetically creating a better experience...and [achieving] clear differentiation [from competitors]."
</p><p class="shortcode-media shortcode-media-vimeo">
<iframe src="https://player.vimeo.com/video/426344593" width="100%" height="480" frameborder="0" scrolling="no" class="rm-shortcode" data-rm-shortcode-id="dda51804020460e2470cdbeb11109bb4"></iframe>
</p><h2>The Next Song
</h2><p>
After having recently reeled in Sonos and its new streaming service as a customer, Super Hi-Fi has its sights set on bigger streaming fish. Jehan may help them get to Spotify, and they'll also look to Apple Music.
</p><p>
Chief business officer John Bolton told dot.LA that Spotify's expansion into podcasts makes them a prime candidate to benefit from Super Hi-Fi's service. He pointed to their "Your Daily Drive" product – a mix of music they know listeners like and relevant news – and said he could see that sort of playlist growing to include podcast snippets, the weather, and various other forms of audio, all tailored to the listener's preferences and location.
</p><p>
"If we see this happen at scale you'll start to see listening experiences become something very different," said Bolton, who helped found Super Hi-Fi after leaving ByteDance, which acquired his social media-meets-music startup Flipagram.
</p><p>
Streaming platforms may well be working on their own blended-audio AI solutions, but Williams says iHeart has benefited by getting in with Super Hi-Fi early.
</p><p>
"Two years from now everyone should have this solution or some version but we'll have already taken this to the next step, so it gives me the opportunity to get ahead," he said.
</p><p>
Music lawyer Ed Buggé, partner at L.A.-based entertainment law firm Hertz Lichtenstein & Young, thinks Super Hi-Fi "could be an attractive target for digital streaming platforms (DSPs) as they look to differentiate their platform offerings."
</p><p>
Spotify's former chief economist agreed. Will Page said a major audio streamer could look to Super Hi-Fi as a way to stand out in a market of look-alike services competing for the same customers.
</p><p>
"All these services offer the same 60 million tracks for the same $9.99 price point. With so much similarity, the value of distinctiveness goes up," he said. "The end game could see it being acquired by a DSP."
</p><h2>
More than Music
</h2><p>Even if Super Hi-Fi doesn't lure the big catches in streaming, it can serve other verticals, including digital fitness. Peloton is already a customer.</p><p>
"They wanted something different," Zalon said. "They want to make sure there's no loss of energy between songs; there's nothing worse than having music drop off in the middle of a workout. So we've been working with them on the roadmap to use the AI to help create an exercise experience that never loses its energy." In addition to blending songs, this will include voice-over instructions from Peloton's instructors.
</p><p>
Retail music is another area the company's targeting. Octave Music Groups, which operates Apple Music for Business and manages the music that customers hear at Starbucks, along with many other bars, restaurants and stores throughout North America and Europe, is another Super Hi-Fi customer.
</p><p>
Just as a radio station manager works with a DJ to set ground rules for branding the station
<a href="https://en.wikipedia.org/wiki/Voice-tracking#cite_ref-Geller2009_4-0" rel="noopener noreferrer" target="_blank">through its sonic choices</a> – running a branded message every 15 minutes, a news break every 30, and keeping segues tight but breezy, for example – each customer works with Super Hi-Fi to customize the AI to fit its desired style.
</p><p>
In exchange for this
<a href="https://en.wikipedia.org/wiki/Voice-tracking#cite_ref-Geller2009_4-0" rel="noopener noreferrer" target="_blank">AI-plus-support service</a>, Super Hi-Fi receives a licensing fee. The company would not disclose its prices or finances, though Bolton said Super Hi-Fi has not raised any outside funding.
</p><p>
He thinks using AI to bring a new level of real-time curation, presentation and personalization can attract more advertising and subscription revenues to the music industry. That's all the more important in
<a href="https://dot.la/music-startups-2647008629.html" target="_self">an era when live performance has evaporated</a>.
</p><ul class="ee-ul"></ul><p>
"We have a big, bold vision and tech that can transform playlists into listening experiences that we think will eventually make the industry much more money and provide a much better product for consumers," he said.
</p><p>---</p><p><em>Sam Blake primarily writes about media and entertainment for dot.LA. Find him on Twitter at @hisamblake and email him at samblake@dot.LA</em><br></p>From Your Site Articles
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