Music Tech CEO Troy Carter on Predicting Hits and Music's Future
Troy Carter, 48, knows the modern music business well. The Philadelphian-turned-Angeleno has managed Lady Gaga, John Legend and Eve, and formerly led creator services at Spotify. Carter, who also oversees the entertainment assets of the late artist Prince, has been an advocate for artists and called for greater artist-ownership of their copyrights.
In early 2019, Carter launched Q&A with longtime collaborators Suzy Ryoo and J. Erving. The music-tech company aims to help artists and labels navigate everything from royalty payments to creating hit music through a combination of services and software. One of its first moves was to merge with Erving's Human Re Sources, a distribution and label services company that Sony acquired this December. But its most-watched move is a tech spin on talent management, including a new product that uses music enthusiasts and AI to test whether songs can become hits.
Earlier this month, the company launched Venice Innovation Labs, a division that's developing the predictive software, along with another product to help record labels distribute music, manage their artist roster and keep track of financial splits and payments. It counts Grammy-nominated Ant Clemons and Baby Rose among its early clients.
Carter has been an active early-stage tech investor through his angel fund, AF Square, which has invested in Spotify, Dropbox and Uber, along with L.A.-based PlayVS, FazeClan, Blavity and Thrive Market.
dot.LA caught up with Carter to talk about the future of the music industry and how technology is continuing to shift its balance of power.
What do you see as the main problems facing the music industry?
Artists have more options now than they've had in the past because of technology and capital sources. Before, the types of deals were limited, because it was essentially one capital source: record labels. That's no longer the case. Technology has created lower barriers to entry. Artists can release music on their own and they can start building buzz. If I was starting a label today, I would be looking at: how do I future-proof my label before I get disrupted by other models? Even if labels got a perpetual piece of the revenue stream, if the ownership and control of those rights went back to the artist as the label recouped or reached a profit, that's a model that could work.
Why do you consider that as a model for labels to future-proof themselves?
Otherwise, if the choice becomes I (as an artist) have to give up 80% of my upside in exchange for a $250,000 advance, and that ties me into three to five albums, which is probably eight or nine years of my life – maybe that $250,000 isn't worth it if this (alternative) capital source over here is much less restrictive and gives me the freedom to make different types of decisions. That becomes the differentiating factor.
How are you beta-testing songs?
A label traditionally looks at post-release analytics, which isn't that helpful after you've already invested hundreds of thousands of dollars into a song or project. This is about pre-release analytics, to inform you whether or not you should invest into that particular song or project. In a software business, there's a lot of A/B testing; you're figuring out what works and what doesn't work. And you're investing in things that work, and killing products or features or things that don't work.
The music industry has been such a gut-driven business. If you're in a studio, you like a song, it goes to the record label, everybody gets excited, and you put it out onto digital service providers (e.g. Spotify, Apple Music). But if you find out that fans aren't reacting as much as you thought they would , yet you've already invested in the music video, you already invested in the lyric video, you spent money on photo shoots for the artwork – that's a significant investment.
So when you're A/B testing a song pre-release, how do you assess its viability?
You have real listeners on one side that are giving you real feedback. We know a lot about those listeners and their listening habits. They're giving feedback on the specific songs, whether it's through sentiment analysis, through actual rankings of the songs themselves. It's not coming from just software; it's coming from a combination of software and listeners as well.
How do you identify that initial pool of listeners?
We really did a good job of curating. I think it's over 1,000 sign-ups at this point, and a waitlist as well. We won't give away our secret sauce, but we got a great group of music listeners on the other side. For the cohorts that are in right now, the focus is primarily around pop and hip-hop. And the idea is then to spread it out from there.
So you'll sort of re-curate the cohort as the supply-side evolves?
Exactly. It's not even re-curate as much as it is bringing on. If we decide, you know, country music is the next vertical, it's making sure that we go out and recruit there. If it's classical music – the listeners are specific to the genre.
How do you balance software with human intuition in order to gauge the strength of an artist or a song?
I don't believe software will replace humans in terms of finding great artists. I think (with software) you can identify what people are reacting to and it can give you information on the types of things that people are reacting to. But, in terms of being able to identify who a star is, before there's any data available, that's what great entrepreneurs like Berry Gordy (founder of Motown) or Jimmy Iovine, or people who've started these fantastic labels over the years do.
Our job is to be able to give them tools to help them run those companies and make smarter decisions. Is it this song, or is it that song? Is it this piece of artwork, or is it that piece of artwork? So I don't think it replaces the intuition, and I don't think it replaces the creativity. I think it just helps inform decision-making after they've made those intuitive decisions.
How do you think a young Berry Gordy would be different if he operated today?
The only difference would be the musical tastes would have changed. But in terms of the core principles of what he would be looking for in an artist, they wouldn't change. That's the difference with Berry Gordy and with real artist-development executives.
You have some executives (now) that basically will look at "what's the velocity of this artist on TikTok or SoundCloud, or YouTube," and that's how they spot talent. Not to say anything's wrong with that, but it's a different approach when there's no data, and you just see, "okay, this person has an incredible voice, and a quality that lights up the room when they walk in; I can help shape this person to be a superstar." It's a different quality that a person like Berry Gordy has, making decisions in the absence of data.
Isn't adding data taking out the very qualities in artist-development executives that you celebrate?
My job, with software, is: Can I help them choose which song they should release first? And what that reaction would be around that song. Can I help them deliver that content from A to Z seamlessly? Can I help them with their project management software as they're going through each step in that creative process? So it's not to replace the creative process, it's to organize the creative process.
A recent article by a past colleague of yours at Spotify, Will Page (former Spotify chief economist), suggested that we've hit 'peak streaming' in some markets. Is that right?
Music is the soundtrack to people's lives. I don't know if we're ever going to hit a peak, in terms of the way people engage with music. If anything, people are going to engage with music even more because you have more television shows which sync music now. When you look at the amount of content on TV, you look at the amount of games, the amount of short-form video that's being made, you look at TikTok videos – I think engagement is going to continue to grow. It's too early to be able to say whether we've hit peak or not. We went through a really interesting year, where a lot of behaviors changed, and we need to see what normalization is going to look like. We can probably answer that question better a year from now.
Looking forward, what do you think the role of livestreaming and livestreamed concerts becomes?
We're at the very, very, very beginning of what we're going to see in the livestreaming space – specifically around AR and VR. The live concert experience is limited to who can be in a room. And there's only a small percentage of really great seats in the house. Right now you're capped at a capacity, plus the amount of wear and tear on artists to do 150, 200 tour dates throughout the year, and the level of expense that comes with that as well; we can figure out much better experiences. Not to say it's going to replace it, but I think it's going to be very complementary and I think we're at the very, very, very beginning stages right now.
When do you think live events return?
I think in the U.S., we'll see that this summer we'll be back up and running with live. Probably not at full capacity, but I think by the end of 2021, we'll be back full-capacity.
What's ahead for Q&A and Venice?
We have things coming down the pipeline that we're excited about. But our thing is: Can we become the operating system for the music industry? If you look at what our workflow looks like right now, people are still sending music in Dropbox and Box, or WeTransfer; lyrics are written in people's notes on their phone or on Google Docs or on texts; you may have something on your email at the label but somebody else may have something else on their email. There's no central source of truth when you're managing a project. So the way we're looking at it is, for creative projects and labels, can we become the central source of truth?
This interview has been edited for brevity and clarity.
Sam Blake primarily covers media and entertainment for dot.LA. Find him on Twitter @hisamblake and email him at samblake@dot.LA
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Los Angeles is home to thousands of founders working day and often night to create a startup that's the next breakout hit.
Who are the most impressive L.A. founders? To find out, we asked our cohort of dozens of L.A.'s to VCs top weigh in.
In somewhat of a surprise, given he's less profile than many founders, Andrew Peterson, co-founder of the cybersecurity platform Signal Sciences, topped the list. Last year, he sold his company for $825 million to Fastly, which he joined during the transaction. He now leads the cloud computing giant's security practice.
Unfortunately, the list is lacking in diversity and does not include any females, which is emblematic of problems that continue to plague the industry.
A mere 1% of venture-backed companies are led by Black entrepreneurs. Last year, only a quarter of venture dollars nationwide went to companies with a female founder and L.A. fares especially poorly, ranking fourth for capital invested with female teams.
The complete list is below, in alphabetical order, except for Peterson, who received the most votes. The others were all tied.
Andrew Peterson is the co-founder and former chief executive of Signal Sciences, a web application security platform that he founded in 2014 and was acquired in 2020 by Fastly in a $775 million deal. Signal Sciences protects web applications from attacks and data breaches for clients like Duo Security, Under Armor and DoorDash.
Prior to starting Signal Sciences, Peterson worked at Etsy, helping the online marketplace with international growth as a group project manager. Etsy reportedly became one of Signal Sciences's first customers. Peterson has also served stints as health information management officer at the Clinton Foundation and as a senior product specialist at Google.
Ara Mahdessian is the co-founder of ServiceTitan, a SaaS product for managing a home services business.
The inspiration for ServiceTitan, Mahdessian's first company, came from watching his parents start their own businesses in building and plumbing, only to struggle with the logistics behind keeping them running, he told Inc in 2019. Mahdessian and his co-founder Vahe Kuzoyan met while in college, and worked on several consulting projects before starting ServiceTitan, in hopes of aiding small business owners like their parents.
Evan Spiegel is the co-founder and chief executive officer of Snap Inc., the Venice-based company known for its app Snapchat. He's also one of the youngest billionaires in the world, launching Snapchat while still an undergraduate at Stanford.
SnapChat, the company's app, has recently been taking on rival TikTok with a new feature and a program meant to attract creators to its platform. And it is been at the center of a larger national debate on the power of big tech.
Spencer Rascoff is the founder of several companies, including dot.LA. He started his career as an investment banker at Goldman Sachs, later leaving to co-found travel website Hotwire. After serving as vice president of lodging at Expedia, he went on to found Zillow, an online real estate marketplace that went public in 2011.
Rascoff's most recent project is Pacaso, a marketplace for buying, selling and co-owning a second home.
Tim Ellis is the co-founder and chief executive of Relativity Space, an autonomous rocket factory and launch services leader for satellite constellations. He is the youngest member on the National Space Council Users Advisory Group and serves on the World Economic Forum as a "technology pioneer."
Before founding Relativity Space, Ellis studied aerospace engineering at the University of Southern California and interned at Masten Space Systems and Blue Origin, where he worked after graduation. He was a propulsion engineer and brought metal 3D printing in-house to the company.
Travis Schneider is the co-founder and co-chief executive of PatientPop, a practice growth platform for healthcare providers. He founded the company with Luke Kervin in 2014.
The two have founded three companies together, including ShopNation, a fashion shopping engine that was later acquired by the Meredith Commerce Network.
Luke Kervin is the other co-founder and co-chief of PatientPop. He is a serial entrepreneur — his first venture was Starbrand Media, which was acquired by Popsugar in May 2008.
Kervin and Schneider then founded ShopNation, and when it was acquired in 2012, Kervin served as the general manager and vice president at the Meredith Commerce Network for a few years before leaving to found PatientPop.
Kervin had the idea for PatientPop when he and his wife were expecting their first child, he told VoyageLA. They were frustrated with how the healthcare system wasn't focused on the consumers it was meant to serve. So in 2014, he and Schneider created PatientPop.
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An L.A. security startup that has already signed on clients in tech, gaming, cannabis and entertainment is coming out of stealth mode just as the deadly assault on the U.S. Capitol and this week's presidential inauguration has brought safety to the forefront.
HiveWatch provides companies with a central platform that uses multiple sensors across buildings to help better respond to physical security threats.
Ryan Schonfeld has spent his career building security programs for startups.
It's almost 90 degrees outside in Los Angeles as lines of cars pull up to Dodger Stadium, home to a mass vaccination site that opened Friday.
"Please make sure that they're not under the sun in the cart," Edith Mirzaian is telling a volunteer as she directs the person to put ice packs on coolers that hold up to 20 COVID vaccines. Mirzaian is a USC associate professor of clinical pharmacy and an operational lead at one of California's largest vaccination sites.
Dodger Stadium alone — once the nation's largest COVID-19 testing site — is slated to vaccine up to 12,000 people each day, county and city health officials said this week. Officials plan to finish vaccinating some 500,000 health care and assisted care employees by the end of this month before opening appointments up to people 65 and older.
Mirzaian is desperately trying to make sure that the vaccines don't spoil.
"We have to be the guardians of the vaccine," she said.
Earlier this month, hundreds of vaccinations were lost after a refrigerator went out in Northern California, forcing the hospital to rush to give out hundreds of doses. Mirzaian's task tells a larger story of the difficult and often daunting logistical process required to roll out a vaccine that requires cold temperatures.
"You know they can't be warm so just keep an eye out," she gently reminds the volunteer.
The volunteers and staff from USC, the Los Angeles Fire Department and CORE Response prepared enough doses to vaccinate around 2,000 residents on Friday and they plan to increase capacity each day after.
Local health officials are holding the vaccination syringes in coolers after they leave the air-conditioned trailers. The coolers are then covered in ice packs and wheeled on carts to clinicians administering shots to health care workers and nursing home staff eligible under the state's vaccination plan.
"Vaccines are the surest route to defeating this virus and charting a course to recovery, so the City, County, and our entire team are putting our best resources on the field to get Angelenos vaccinated as quickly, safely, and efficiently as possible," said mayor Eric Garcetti in a statement announcing the plan.
Health officials around the world are racing against time as the virus mutates and poses greater dangers.
"We have a little bit of borrowed time here right now because these variants are not here in great numbers from what we can tell," said Susan Butler-Wu, an associate professor in clinical pathology at USC's Keck School of Medicine of USC.
Curbing the spread of the virus is a vital way to prevent mutant strains from developing, she said.
Mirzaian, who arrived at the site before it opened at 8 a.m., said that there were logistical challenges as volunteers scrambled to assemble what will likely be the hub of the region's vaccination efforts.
"It's challenging to make sure that everyone knows what the process is and what we're doing and what to tell the patients who receive the vaccines."
After a few hours, the procedure moved quicker.
Residents have to show identification and proof of employment before they're taken through a list of pre-screening questions and given the vaccine through their car window. They're required to then wait for 15 minutes while clinicians monitor them for side effects.
Mirzaian said the process took each car about an hour. While eligible residents can walk-in for vaccinations, she recommends they make appointments so that enough doses are made available each day.
"As long as people have their appointments, they will get in," she said. "We are ready. We are like an army ready to give vaccines."
An earlier version of this story misidentified CORE Response.
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