SoundCloud has just closed the necessary funding round to keep the struggling music service afloat. CEO Alex Ljung will step aside though remain chairman as former Vimeo CEO Kerry Trainor replaces him. Mike Weissman will become COO as SoundCloud co-founder and CTO Eric Wahlforss stays as chief product officer. New York investment bank Raine Group and Singapore’s sovereign wealth fund Temasek have stepped in to lead the new Series F funding round of $169.5 million.
SoundCloud laid off 40 percent of its staff last month, with 173 employees departing in an effort to cut costs. The company only had enough runway left to last into Q4, and today’s investor decision was viewed as a do-or-die moment for the company. Now it will have the opportunity to try to right the ship, or sail into an established port via acquisition.
SoundCloud declined to share the valuation or quantity of the new funding round. Yesterday, Axios reported the company was raising $169.5 million at a $150 million pre-money valuation. That’s a steep decline in value from the $700 million it was valued at in previous funding rounds. The new Series F round supposedly gives Raine and Temasek liquidation preferences that override all previous investors, and the Series E investors are getting their preferences reduced by 40 percent. They’re surely not happy about that, but it’s better than their investment vaporizing.
Raine will get two board seats for bailing out SoundCloud, with partner and former music industry attorney Fred Davis, and the vice president who leads music investments, Joe Puthenveetil, taking those seats.
While abdicating the CEO role probably wasn’t exactly what Ljung had hoped for, at least he gets to stay on with the company as chairman of the board. “This financing means SoundCloud remains strong, independent and here to stay,” he wrote.
SoundCloud says its total revenue is now at a $100 million annual run-rate. If it can keep costs low and grow that number, it may eventually get to break even and no longer need infusions of investor capital.
TechCrunch broke news about the magnitude of the SoundCloud crisis last month. Sources from the company told us the layoffs had been planned for months, but SoundCloud still recklessly hired employees up until the last minute, with some being let go within weeks of starting. Employees told TechCrunch that the company was “a shitshow” with inconsistent product direction and dwindling cash. Ljung was seen as reluctant to be honest with the team, and unfocused as he partied around the world like a rock star.
Our report led to a flurry of follow-on coverage, prompting fans and artists to speak up in favor of the service. The rally was reminiscent of the love shown to Vine after Twitter announced it would shut down. Popular musician Chance The Rapper tried to get involved to save the company. He, like many other indie hip-hop artists, made their name on the platform as part of a genre that came to be called “SoundCloud Rap.” In the end, SoundCloud was saved when Vine wasn’t.
For now, music and other audio saved on SoundCloud is safe. But the company will need to find a way to make its subscription tiers more appealing and scale up its advertising despite having much less staff to drive the changes. If it can’t, SoundCloud could be back begging for cash in a year.
The new management should provide some additional confidence. I’ve interviewed both Ljung and Wahlforss in the past, and neither had answers to the big questions facing SoundCloud about its product direction, business model and the spurious copyright takedowns that have eroded its trust with musicians.
Trainor may be able to institute some more discipline at the startup. He was the CEO of Vimeo from 2012 to 2016, and has poached his former COO there to help run SoundCloud. They helped Vimeo fend off bigger rivals like YouTube by doubling down on what was special about the service: a focus on high-quality artful film rather than amateur viral videos. That experience makes Trainor a great fit to lead SoundCloud, which is fending off bigger rivals like Spotify and Apple Music.
SoundCloud’s best bet isn’t to battle them directly, but double down on the user-uploaded indie music scene, including garage demos, DJ sets, unofficial remixes and miscellaneous audio you can’t find elsewhere. Whether it stays independent long term or tries to seduce an acquirer, SoundCloud will benefit from spotlighting its unique community of creators and hardcore listeners.
Featured Image: TechCrunch
IBM’s Watson Beat: who owns music made by a machine?
We’ve seen IBM’s Watson politely annihilate humans in Jeopardy, make a movie trailer for Morgan, create never-before-eaten recipes and even understand nuance and tone… to say the least. Now it’s moving on to music.
Watson Beat is IBM’s music arm of Watson; an AI-driven music composing app that’s sparked some debate about music copyright.
“Essentially you take monophonic melody input and pick a genre and Watson Beat will generate composition after composition after composition until it’s a non-deterministic model – so everything is always unique.”
This is made possible by the ‘cognitive technology’ developed by IBM researchers, Janani Mukandan and Richard Daskas. By teaching Watson Beat the nuances and characteristics of music keys and music theory, the AI technology creates completely original songs with varying moods or styles.
Developers foresee the technology being used to inspire musicians out of ‘writer’s block’, eliminate genre biases or simply to create music that’s never been heard before.
However, when it comes to who owns the music created by a machine, no one seems to have a solid answer.
“I have some pretty strong opinions about copyright, but, I’m not a lawyer,” explained Transier. “I actually don’t think a machine can own a copyright. I think it’s the person who sees that spark and takes it and creates something with it. I think that’s the owner. But that’s not an IBM statement,” she added.
Entertainment Lawyer, Bjorn Schipper, who was also on yesterday’s panel, explained that copyright for AI-composed music is an extremely new area so it’s hard to give a definitive answer.
“In the past, you could always direct [a creation] to a human being. In the future, there’s no human spark anymore – maybe the spark is being made by a machine. So then, from a legal perspective, if it’s not traceable to anything, what do you do with it?”
Schipper went on to explain the issue of music copyright from current legal standards. “According to European copyright law, [a creation] must be the own intellectual creation of ‘the author’ and in the law it says [the author] must be a human being these days,” Schipper continued. “So without human intervention, it’s hard to say if there will be copyright protection.”
Also part of yesterday’s panel was Meindert Kennis, the Lead Digital Strategist and CMO of Spinnin’ Records. Kennis gave some important takeaway advice for artists to potentially avoid the likely copyright concerns of the future.
“A lot of artists create music and come to us and say “Here’s my new track,” but, if they start to use more AI instruments, it might be wise to record the actual recording of the music and the creative process more to show that it’s actually them.”
Schipper agreed and went on to say, “I always advise creative clients, the key is design history, where you can prove, if necessary, inside or outside the courtroom, that on a certain date you created this kind of work.”
As Watson Beat is still in its early stages, it’s hard to say exactly how this AI-driven music composing technology will effect copyright legislation. However, as disruption is inevitable, it might be wise for AI-using musicians to take the advice from the experts and begin recording their entire creative process. It’s better to be safe than sorry.
If you must use Prisma-style art filters on your photos, try Portra
Prisma took the world by storm when it launched last year with its AI-powered art filters for your photos. It was a neat trick that eventually expanded to video and selfie stickers, and even prompted Facebook to copy it. But I’ve hardly ever found the results appealing.
If you’re still keen on art filters, though, Portra is worth a try on Android and iOS. The company hasn’t explained how its app works or whether it uses AI, but it sure is good at applying a range of fine art effects to your pictures. Interestingly, I enjoy these a lot more than the ones available in Prisma.
It’s easy as pie to use Portra: just snap a picture or import one from your gallery, choose from 19 filters, and that’s it. You can adjust how strong an effect you want, and how much of the frame you’d like to retain – moving the slider causes the edges of your picture to fade and let a canvas show behind it. Oh, and you can also tap the edge of the editing area to see your creation mounted in a frame.
When you’re happy with the results, you can save the image to your phone or share it directly to social networks. Annoyingly, Portra adds a wordmark at the bottom of the image, which you might want to crop out. That aside, it’s a nice tool for giving your pictures a whole new look; I like using it on photos of city scenes, landscapes and my dog.
While the OG Prisma offers a larger range of filters and even more features, like applying the art style to only the foreground or the background, the results seem artificial in comparison to what Portra manages. For reference, here are the same three images from the header of this article, processed in both Portra (left) and Prisma (right):
Sadly, Portra doesn’t generate high-resolution images that you can print; the output looks fine on small screens, but aren’t enough to print even on A5-size paper. That’s a feature I’d happily pay for.
Google Play will now let you try select Android apps before installing them
Google announced a bunch of updates big and small to its Play store today, but the most exciting of them all is the arrival of Instant Apps, which you can stream to your device and try out without having to install them first.
We first heard about Instant Apps at Google’s IO developer event back in May 2016; the company began rolling out support for these programs this January, but few such apps have been spotted in the wild.
Now, Google says you’ll be able to trial supported apps from the Play store by tapping the Try it Now button beneath their listings. There are a bunch of them on this page, but the option wasn’t available to me on multiple devices in India – so it’s likely that Instant Apps aren’t yet supported everywhere and on all eligible devices just yet.
This feature should make it easier to decide if you want to buy a game or a premium app before ponying up for it. There’s already a refund system that lets you get your money back if you return the app within two hours of your purchase, but this might help even more. If you’re interested in making your app streamable, you can follow Google’s lead on this page.
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