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Music Start-Ups See 34% More Investment In 2012

Music Start-Ups See 34% More Investment In 2012

The Pro Audio Web Blog

Digital Music News has today reported that 2012 has been a great year for music-related start-ups. With a total investment of over $600 million in new industry companies we have seen a massive 34% increase in funding given since 2011. Whilst last years investment topped just over $400 million, Digital Music News reports that last years total expenditure was surpassed in September of this year.


With large portions of this cash being spent on on-line resources such as music-platforms and storage, the company that achieved the most investment by a mile was Sonos, a wireless music systems manufacturer, with a $135m investment, shortly followed by Deezer, an online portable music streaming platform, with $130m of investment.

Whilst Spotify attracted $100m of investment it places the company in third place. However, what is most clear, from the sheer level of investment in music streaming platforms, is that investors have identified  that there is a huge consumer demand for these kind of services. With most of these companies making the bulk of their revenue through advertising or minor usage fees (in comparison to how much it would cost the consumer to individually buy all the tracks which they have listened to), this is quite possibly going to be the way in which we all might be expected to consume music in the future.


Don't get me wrong, a 34% increase of investment in music related start-ups this year is great, but with the bulk of this money being invested in streaming this may be upsetting for two parties. First, due to the nature of how music is consumed on platforms, less money could potentially go to smaller named artists. The reason for this is that some of these companies do not cater for those artists on small independent labels or individual musicians who have pursued the modern means of marketing themselves; through pressing and distribution (P&D) deals. The second party that this might upset, is the audiophile, and their community. These people are usually the owners of large 'high-end set-ups' that eternally preach about how important it is to campaign for a higher level of clarity for all music. However, with this being said, it won't really damage them, just add to their disappointment, where the reality is that music quality has been degrading since the demand for analogue technology dwindled and switched to digital. Now, with a limited physical resolution of 44.1 killosamples per second (kHz) and a 16bit encoding and decoding this certainly doesn't satisfy the needs of the audiophile, let alone the amount of time it takes to buffer an entire song that holds less quality.

To tie up, 34% increase... Great! Now lets hope that all of this cash goes to good use and helps the music industry regain some kind of youthful appearance.


Edd Harris

Digital Music News has today reported that 2012 has been a great year for music-related start-ups. With a total investment of over $600 million in new industry companies we have seen a massive 34% increase in funding given...

Edd Harris 18th December 2013

Article Ref: #2012MoreInvestmentStartUp