Music Industry in Crisis? Challenges and Opportunities

Jakob

Great guys, doing a smooth transition into the podcast, me and Dan we already started talking and I was like, okay, we need to get into recording. Dan, you're here because we are ready for some darkness. I read a brilliant LinkedIn post of yours and anyone who knows you, knows you're a brilliant thinker and maybe so complex that most people don't understand what you're talking about. But let's talk about those complex things. Dan, welcome.

Dan

Thank you, thank you. Well, I'm into it.

Jakob

No, Dan, you're very fascinating. You're one of the people where I pride myself in understanding concepts really fast. But some of your posts and medium articles, you have posted in the past, I'm just like stuffing every section like, oh shit, that was even a term I didn't know. So Dan, you seem like you're some sort of lexicon of music industry and reflection. So what are you gonna bring to us today?

Dan

I mean, I think, well, you reached out to me because I wrote some posts about... I was in a bit of a bad mood, I'll be honest. I put some posts which actually, for transparency, I've actually since deleted because I was like, actually, I don't need that kind negativity around me. But it generated quite a lot of interest. And I was basically sort of painting out the...

Jakob

Yeah.

Dan

sort of like the next 18 months is going to be pretty difficult for the music industry. And so yeah, so I think that's what we're going to talk about, It's kind of like what's coming next, I guess.

Jakob

Yeah, so I was actually looking at the LinkedIn earlier today to find the post again. Luckily, I had screenshotted it because I sent it to you and said, hey, Dan, do you want to talk about this? But yeah, so let's solidify it in the podcast instead. It's a good thing you deleted it on LinkedIn. But I think we have one thing in common, maybe for different reasons. But I'm also a bit. about the future outlook of the music industry. Could you dissect for me, and we'll get into, you make a personal introduction in a moment, can you dissect for me, why did you write that on LinkedIn? What was the reasoning behind it?

Dan

Yeah, so I think Where my head was at was thinking through, so I think the music industry is such a complex place, right? And there's so many different perspectives. There's so many different like actors acting in the very different things. Like me and some friends used to say there isn't one music industry. There's multiple music industries and it's more like a music ecosystem, which we call it rather than industry. But I guess like at that moment I had the perspective of, you if I was a indie creator or an indie like label, indie rights holder. It looks very difficult coming up. And I think the reason why I deleted it is because actually it doesn't dwell to, it doesn't do to dwell on being negative. But I think the important thing is that there are some considerations. And I think that what I was really trying to say is the business is going to change quite a lot. I guess reasons for that we can get into it, but I think there's quite a few... sort of like macro effects that are sort starting to converge quite a bit. And the impact of that is really less jobs, basically. Less jobs and harder to break through. It's kind of like the summary, I guess, but you know, like, yeah. How do you want to dive through this? Because there's quite a bit there.

Jakob

Yeah, there's so many angles diving into that and I often, because it's easy, come from like, you know, the creator angle with dilution of value or basically taking away that midsection of quality. But if you were to take an angle from somewhere else, where would you start?

Dan

Yeah, so I think, so I just like, before we jumped on this call, I was just trying to like dissect this into my own thoughts. And I think like, the starting point here is, know, so like the general state of the creative industries in 2025. Like, I think that when we look back on the last 10, 15 years, it's actually been a bit of a golden age, despite everybody's issues that they have with, for example, like Spotify payouts or, you know, all of the narratives that we've. heard and probably said ourselves multiple times. Actually, it's been pretty good. You know, the industry has kind of like come back to growth and, you know, we've all seen the charts of where it's kind of like now above where it used to be before, before sort of the internet changed the game. My counter to that is always well, that's not in real terms, but you know, putting that to one side. So yeah, so, but things are changing. And I think like the best example of this, I think is, do you know Matthew Ball? So Matthew Ball is an analyst who sort of came to sort of like, he came to fame recent in the last couple of years because he was the one who, or he claims to have coined the term the metaverse in terms of like how we know it now. So. He wrote this whole thesis around the metaverse and then it was at the same time that Facebook changed to meta and there was this whole thing going on. Anyway, his real sort of like speciality is video games. And so he's written out this piece and it's like 240 slides. You can find it. It's called The State of Video Gaming in 2025. And it's a really fascinating read because I think that when you speak to people about the music industry, One of first things they'll say is, well, there's not enough revenue. And actually, if the music industry did more like the games industry, then there'd be a lot more revenue and like, you know, it would be a much more healthy ecosystem. That is probably true. But what is also true is that the games industry is now, you know, the games industry is completely plateaued. In the past three years, like, you know, before the last three years, so the previous 10 years,

Dan

it's all growth that like far eclipsed a real GDP. In the last three years, it's completely plateaued and there's been math layoffs across the entire industry. And so like what he really picks into there is that games had certain growth drivers, had certain things they really focused on, did really well, things like free to play, all these different things. However, they've basically dried up and they're not delivering the same level of growth. So even though like the games industry and I promise I'll pull this back to music in a second, like, my point is the general creative industries, but like even the games industry, which is seen as like the golden child of like the creative industries over the past 10 years is struggling. And it's, know, arguably quite far advanced in terms of monetization strategies and all these kinds of things. If even the games industry is struggling, then you have to then take a look at other things.

Jakob

Mm.

Jakob

Mm.

Dan

And so then, coming to music, know, music has very much been sustained on streaming over the past, well, 10 years now, I guess. But, you know, especially in the past few years when people like Goldman Sachs, et cetera, have like had all these massive forecasts. However, anybody who's on the inside knows that growth has been really dependent on

Jakob

Hmm.

Dan

I mean, basically, the future growth within streaming is focused around the lower RP regions to try and cut to the chase here. And that creates a plateau in value. that is kind of like, it is creating a major, major issue is what I'm trying to say.

Jakob

Hmm.

Jakob

Hmm. Yeah. For example, you know, in Norway where I'm from, I think I can't remember how much you have adopted to streaming, but I close at 85 or 90%. Like, yeah. So, okay. So basically you see saying that, you know, the numbers of growth within streaming primarily are from regions that's not going to bring the monetary value comparison to what we sort of are just looking at when we look at growth numbers.

Dan

Yeah.

Dan

And well, frustrating thing, though, is that kind of everybody knows that and has known that for years. It's just it's not been a convenient thing to focus on. So that's one element. I think another element is around, again, a kind of more. A less obvious thing is the fact that basically every single major company in the music industry that could go public has gone public now. And there's been essentially a transfer of ownership.

Jakob

Mm.

Jakob

Hmm.

Jakob

Hmm.

Jakob

Yeah.

Dan

within that process. So, it's reported every couple of months, Daniel Ek is pulling out more stock from Spotify, the other co-founders are as well. It was reported last week, I think it was, that Bill Ackman is kind of forcing UMG to list in New York. There's like an overall change here in terms of like the ownership, which is...

Jakob

Mm.

Dan

inevitably forced the conversation much more around a cost-focused conversation. And the challenge then is like as the world is changing so as quickly as it is, how does the industry, how do the pipes within the industry, who's investing in the future for that versus that cost-focused mentality? And I think that anybody who's worked at a startup and tried to sell their product into the music industry that is based on efficiency rather than revenue generation will understand what I'm saying here is that it's really hard. It's really, really hard. And all the signs point to becoming even harder. So yeah, so I think that's another really important one is that there is an element of, and I'm trying not to use two negative words, but there is an element of

Jakob

Mm.

Jakob

Hmm.

Dan

the industry effectively being cash cowed, which makes for challenging environment.

Jakob

Yeah, I can see that. It's so funny, like just some of my own reflections. I work with startups on databases, know, hands-on a database is involved in 45 startups within our portfolio. And then I meet startups all the time as mentors or consultants or whatever. And one of things I've been talking with my business partner, Taj, about, he's also starting a podcast in this space is how little potential we actually see. the reason why I'm saying that is...

Jakob

I jumped on a call with a particular person in the music industry a week ago. And that person was so optimistic about, know, innovation in music and so many startups and incubators and all that kind of stuff. And so positive and was very established person also with a technology background. So nothing against, you know, his credentials, but I would just stop him and say like, I can't see you. what you're saying. I can't see that overwhelming flood of talented founders building with and for the industry and that whole synergy thing going like, I might just be isolated here but no way, but you know, the world is pretty digital. So I get to see a lot of things. I just don't see it.

Dan

No, I've had similar conversations, which have essentially been the only areas of the only areas of music tech that are getting any funding and any interest right now are in open AI front ends and some kind of quote unquote super fan, director fan, know, what we used to call director fan back in the day, engagement platforms. Yeah, it's definitely it's

Jakob

Mm.

Dan

It's definitely tricky and I think... Yeah, there is a challenge. think it's always been challenging to, so challenge a lot there, it's always been challenging to get funding in music tech in general. I think that we all know the story you need to spin generally to get any kind of like, well especially for like a VC track, it's like, yeah, we're doing this thing in music, music is always first to the... first of the plate, but actually this thing that we can do is more generalizable and it's gonna be all content and actually the TAM on this is actually 25 billion or 25 trillion dollars, know? So that is definitely a thing, but then, I mean, the third thing that's really in my head and has become increasingly so, I don't wanna turn this podcast into a whole AI chat, but. Like it is a really, really interesting time right now in that like, you know, traditionally the three, like, I mean, yeah, the three of the core markets of the music industry are essentially going down three different routes when it comes to how AI should be regulated right now. You know, in the EU has its position and position around like exceptions for text and data mining. the U S is behind that position in, that like, still hasn't come out with the corporate office. It still hasn't come out yet. but there's the court cases there, which are all about, you know, fair use. And then the UK right now is, has a, a call for evidence, like which right now it's going to close in the next month or so. where it's suggesting that it should go similar way to the EU.

Dan

but there's a lot of push back around the opt out versus opt in question. Whereas in the EU has settled on an opt out, whereas people in the UK are kind of pushing towards the opt in. Why this is a challenge is that with this very uncertain regulatory environment, like it becomes very difficult to raise any funding, right? Because if you're an investor, why would you invest in that versus an industry? another industry where there's a more certain environment. But it also means that like, regardless of which option gets chosen there, there's going to need to be a lot more infrastructure built to be able to support it. If it's opt-in, opt-out, whatever it is, you're gonna, I mean, I can't see a world where you don't have to have some form of global repertoire database, which basically tells people if it's opt-in or opt-out or something in between. Yeah, there's so many things going on. And then I guess the final piece would be, before we can move on from the darkness, the final piece would be the consolidation of the industry, which is really hard to walk past. know, PS finally being fully acquired by Universal. brain's just gone. Fugio's parent company, Downtown. The Downtown acquisition, you know. Like when I say my frame of mind at that point was around sort of the indie side of things and all these pressures and also quite a few of my friends who've been made unemployed over the past year or so, kind of built up to this quite interesting position. But what I will say is on that post, I did also point towards a future that was a different future where creators could do something different. Maybe I'll get on to that.

Jakob

Mm.

Jakob

Hmm. Yeah, because I think that's interesting. Thank you for the whole thing. And it is complicated to sort of see the whole movement together, like consolidation and metadata. I think it's really, we might touch upon it again in a podcast, but it's difficult concept. So I'll just skip to something a bit easier first. And that is exactly to the point where we ended here. And that is. how creators can maybe monetize in a different way or think a bit different way or maybe just stay away from how music is telling the story right now. Like I truly believe that the new generation of creators already starting now will be fundamentally different from what kind of creators there are now with their music. Different personalities, different capabilities, different types of skill sets. And I believe firmly in the... TikTok generation and the in the way not necessarily that was the wrong term, but like the streaming fans, you know, the whole thing that Mr. Bean started Mr. Bean started and then moved into like all these niche streamers and even though I don't follow that world, like I observe a lot and for me, like such a brilliant way of getting fans and having them sort of engage with creators. Is that the argument you're pointing towards that's how creators maybe should think in the future or like, where are we going with that point?

Dan

I don't know what the answer is, but what I can point to is something that's made me excited over the past three months. And it comes from completely outside of music. So I played League of Legends since beta. I've kind of followed that ecosystem for a while alongside other games. And there is a streamer in League, a guy called KDrill, who was a... professional player. So League of is a game where there's a kind of like competitive element to it. And you know, it's like it is a premier esport as they call it. So, you know, they have like regional competitions all through the year and then there's a world's like world finals sort of thing. Anyway, this guy who's next pro was a commentator for a bit and then realized he could make way more money being a streamer. And then he's essentially built up an audience that is bigger than the official broadcast, just through his streaming. And then he has used that audience that he's built up there to start his own professional team. And they're called the Lost Rotonis. So he has this audience. So he's built this team and the differentiating factor of this team, as it were, is that they do everything live. So they stream everything, every conversation they have, every practice, everything. Which means that on a Tuesday afternoon, there'll be 50,000 people watching his team practice, essentially. And then when there's a match day, then there's a lot more. And I think that's a really interesting dynamic. And I'm not saying that's going to be appropriate for everybody. But this idea of

Dan

building an audience, going audience first essentially, like building up an audience, something that has kind of been abstracted away from artists in that like the audience has been on the platform rather than their audience. And it's still an audience within Twitch, but you get my point. You build them up and then you bring them along with the journey, bring them along for the journey. he has this, he started this project.

Jakob

Hmm.

Dan

It has so much support from it. And it's just grown from strength to strength to strength. They're arguably already like the second most popular team in the entire space. And they're playing in like a regional league. Anyway, I just think it's really interesting. And I think that, you know, is this like directly applicable to music? Possibly. But I think that like the mentality in it, which is like not being scared to completely open up the process.

Jakob

Mm.

Dan

With the intention of bringing the audience along for the ride. I think that's a really interesting one and I can't help but feel that will be quite a major dynamic going forward.

Jakob

But if you were to imagine comparable scenarios for music, and I'm putting you on the spot, that could maybe borrow from that mentality, what kind of examples could that be?

Dan

Yeah, I mean, I was thinking about this. If there was, you know, you create a band and you basically stream the entire process, you basically turn the band into your own personal TV show. You know, that would be the direct applicable thing. And I think that like, with all these things, like trying to find a direct like comparator is often like inaccurate. But, but that would be an example, right? Is it like... like from the formation of the band all the way through to playing a festival. It's a process that people can become part of. I think that's cool. Think that, and again, it won't be for everyone. It won't be for everyone. A lot of artists want to make art and only make art and that needs to be respected as well. But there's this bit that sort of gnaws away at me a little bit. It's like the... potential market for that. The potential market for that has been decreasing over time. It's become harder and harder to just be an artist that puts out art and that's it. And we've kind of seen that through the social media age. And this I think is a potential direction where that goes. For all of it's good and bad.

Jakob

Okay.

Jakob

Mm.

Jakob

And the lack of this in general, like also just has its ripple effects in the industry. That the monetization doesn't happen that effectively. Very few cases actually engage in monetize or think creatively beyond the set, you know, platforms out there. Like I've been, I've been coding a lot lately, actually the last week, I think I've been pretty much 90 % just coding.

Jakob

And I, I'm not going to say what I earn from that, but just me personally, hour and hour coding, I earn two to three times as much as a normal consultant because

Jakob

I can create value instantly and sell that to companies. I'm pretty much an expert in music. I've lived and breathed it for 12 years. Pretty public person, people come to me all the time. Making anything that would be remotely called a good salary, if I just was a one person business, would be hard. It's just a stupid comparison, but it's really led me to reflect so much lately. Know, one thing is that it's been hard. It's always been hard. You know, that's fine. But when you compare it so much to like, like I literally started coding seriously five months ago. And if I quit my company now and just started coding full time, I'll be good. Like. But that for me has just shocked me. Like was sort of a wake up call the last few weeks, like, what am I doing in music? And it's not because it's about money. So obviously I know why I'm in music. But for me, it's just like, it's so perplexing.

Dan

Yeah.

Dan

Yeah, it's really difficult. And I think that there's a slightly like quasi like abusive relationship that goes on with regards to people who work in the music industry. And again, kind of I guess this kind of reflects back to the original kind of person put on LinkedIn. Was speaking very much as from a voice of somebody who's working in the music industry and like thinking about like future opportunity and that kind of thing. Like there is this kind of thing that keeps people in working in the music industry be that a creator or you know somebody who's a copyright expert or whatever it is which is that there is a love for what you do but there is a breaking point on that as well and you know like the real risk is that the people who Talent leads you get a brain drain from the industry and that is one of my fears as well if I'm being honest is that we could see that quite heavily You know as this whole sort of like industry-wide cost reduction exercise happens But then the flip side of that is actually it's an industry growing up and that maybe those jobs shouldn't exist in the future and that new, better jobs, new, more different jobs, maybe not better, different jobs will exist in their place. And actually it's a bit Luddite-ish to kind of lament that. But I don't know, this is just kind of what's really in my head right now.

Jakob

Yeah.

Dan

Within what it means to work in the music industry right now. You know, the typical kind of like tech response to that would be, you know, move on old man, it's time for the new way of doing things. But I think there's a balance between the two. And, you know, especially just going back to this point about the infrastructure, you know, my background has been... very much around sort of working out business models for the back end of the industry. And yeah, it's a really, really difficult place.

Jakob

Yeah, talking about business models, like one of the things that is perplexing about all of this is as a person running a venture studio, we have a lot of people coming through our company that's not necessarily music. And we often, if not always, can find very clear growth opportunities from new technology. I fail to see an absolute clarity of music. Like I fail to see it. There might be some. But I don't see that significant positive change. Do you see any?

Dan

I think it is really difficult because of the unique dynamics of, I guess, intellectual property in general, to be honest. It is an intangible good that's supported by essentially legal precedents, which creates these restricted acts and then you have to have a license to... Yeah, to exercise their restricted rights. That means that there's always a music going to be a friction between like how technology could change things and also how that applies to the essentially the human rights that creators have. Which is which is the challenge, right? That is like if you want to if you want to get really deep into why is it so hard to be a music tech founder? It's that friction. And it's not to get too high brow, but this is why I have to bring up the, it's literally recorded in the UN's Declaration of Human Rights, Article 27. It has this like coupling of statements, which I'm remember them verbatim, but it's essentially that everyone has a human right to experience the expression of art. And everybody has the human right to be compensated for their human art, right? And that's basically the friction that it kind of defines the playing field on which we're all trying to play. And yeah, so I think that's why it's really hard to be this future caster.

Dan

Looking into your tea leaves and saying, okay, this technology AI is going to do this and that's where the industry is going to go. It's really difficult to do that. AI being a really good example, right? It's like, everyone's like, okay, cool. AI is going to come in, it's going to flood the zone. It's going to be really, really difficult. It's going to become like so much more difficult for you as a creator to be able to get above that noise, blah, blah. You know, the future's bleak. And then the flip side of that is actually, you know, Creativity is one of the most important parts of the training data that makes up AI. And, you know, the regulatory environment is still being formed, but as long as it resolves in a way that allows for creators to be able to be compensated when their creations are used and new things are generated from them, be that through ops, in ops, out, whatever it is, then actually... There's a totally new monetization vertical here that wasn't previously available and is additive to the other side of things, you know? There's this constant like... yin and yang, I guess.

Jakob

Hmm Yeah, there is and I do buy that argument of you know more monetization but What I'm more concerned with is just like how does that look from the next generation and it's not because I To be honest, I'm not that concerned about what the music industry is right now And that's my position as sort of like a neutral business developer. I think that's only my benefit So I don't have a particular love for what is But I do love creation and I do love the music industry because of its uniqueness. And so I'm very concerned about those two together. So monetization of works, unless you're extremely liked, sought after, well exposed creator in the future, you won't see any benefits from monetization of training data. Because that's based on previous creativity and the creativity in the future unless you like significantly Influential and whatever is publicly consumed that money cessation strategy is gonna be left for whatever was rather than was to come and That argument I don't believe is sufficient for the future I might be wrong. What do you think about that?

Dan

I think it's interesting. I think the answer to or I think the counter to what you said comes from how the licensing deals are done. It's more of a commercial question than like a regulatory or like a moralistic question. It's like once the regulatory moralistic positions are set, then it comes down to how the commercials are done.

Jakob

All

Dan

You know, like, you if you are just one creator of a million and it's done through a blanket license, it's paid out according to market share, then you're going to get very little. If you are a really interesting creator and you go more of the like Holy Herndon approach where you kind of like people can train off your data exclusively and you can charge it out by yourself like that, you know, there's potentially.

Jakob

Hmm.

Dan

Interesting models there, like artists within a certain genre club together and allow for people to train within a certain scene or a genre, then you can see things coming up from there and that, know, there's a possibly higher value there. I think like, again, this is where the commercialization side comes in. And there's probably loads and loads of different ways that could potentially go. Yeah.

Jakob

Yeah, and I think that might be true. What I'm scared of is I'll make a small analogy. So, again, I'm coding a lot right now. We're building mostly AI agents, like very complex, very, very complex systems, which is incredibly fun. Also mind-boggling, and I don't sleep with that. But what's really interesting is just the development in LLM, Large Language Models, Access. Know, we've been... sticking a lot to sort of open AI, Claude, like the American standards, but like really been exploring new things. And then DeepSeek, the Chinese company came out and just they did the R1 model, which is 96 % cheaper than the O1 reasoning model. And just a moment like that, so many more opportunities open because of what's financially feasible. Like in just one announcement and you know, O1 just released O1 and O1 Pro. Can't keep track of time, I guess a month ago or something like that. It's going so fast that month over month, like new business opportunities opens up, new ways of creating that was not feasible financially opens up. And I'm not saying music's gonna be like that because obviously it's a different thing, but it is gonna be affected by that speed of change. So.

Dan

We agree.

Jakob

So those arguments might be very true now and in the near future. I'm just very doubtful about what the future holds. Because if it's like even a tenth of what new technology is doing, then it will probably look a lot different in three years.

Dan

I think that's the only certainty we can have, is that things will look very different in three years. Yeah, I mean, I think that the mindset I think you have to have, as somebody who cares about the music industries and the wider creative industries and intellectual property in general, is that it's probably the most important time in history. Right now, definitely. At least since the early days of the internet, arguably in history, to really fight the case for why music's important and why creators are important. As I say, I think that any large language model that doesn't use music is going to be worse than one that does. In the way that it's training up and building from there. I think that, as I say, think true human creativity is probably one of the most valuable things that we as a species output. And that's important. That needs to be fully supported in that. And that's why I think this is just such an interesting point and a really important point right now is that those arguments are made. And as I say, like...

Jakob

Yeah, okay.

Dan

The frustration is that there is a bit of a lack of global harmony in that. But then again, you mentioned that I do this at the top of this podcast, but then there's another element here, which is that I don't think that I can ever remember a time when technology and geopolitics were so intertwined. You know, it's no... It can't be any coincidence that the DeepSeek announcement came out in Trump's first week of becoming the US president and committing a hundred billion to AI infrastructure. And yeah, I mean, there's loads, we could do an entire podcast on DeepSeek right now. But like, you know, what's really interesting about DeepSeek is that...

Jakob

It's crazy.

Jakob

Hmm.

Jakob

Yeah.

Dan

There's a lot of training on other AIs that's kind of contributed to the fact that it was so efficient. And so, you know, the excitement there is that, you know, we're probably looking at a very fast race at the bottom with regards to the price of AI, where it becomes pseudo free. The challenge there, is that if all music is driving those things and it's pseudo free, then it's like a world that's very analogous to where music was free to stream and yeah. So there's lots going on. There's lots going on.

Jakob

Mm.

Jakob

Yeah, there's lots going on and I think the only safe harbor I can find in all of these discussions is that I believe that human connection will continue to be valuable and even more valuable in the future. How monetization of that would take place, I'm unsure of. I think there's some things that would stay pretty clear. I do believe that physical experiences will be sought after. I do believe that letting people into your life, like you mentioned, would also be sought after. I do believe that music needs to be very catered, like very... How do I say this? It needs to be real, obviously, but I think there needs to be a lot of clarity on who you're catering to, who you're making music to, who you're marketing to. That's seen only from an angle of really of intent, which isn't a bad thing in any other industry. But in music, at least from a music school perspective, concerto seems very foreign that you need to have a plan in mind when you're music, when you're connecting with your audiences. So those three pillars I have trust in. There's probably a few more.

Dan

Yeah. No, I agree with you. And I think that human connectivity is like something that's never really sat with me was people who were super bullish on like virtual artists. Again, going back to Eagle Legends, and ironically, or ironically, that's something they've traditionally done quite well.

Jakob

Yes.

Dan

People will look at that and say, it's a band of Cartoon images. What they don't understand is those Cartoon images are the characters that people play in the game and have built up that weird pseudo-human relationship with them. I think that human connectivity is just going to be such an important element within it. Ultimately, when it comes down to business model, though, I think that I still think there's pretty much only ever going to be two business models on the internet.

Jakob

Hmm.

Dan

It's going to be advertising or subscription. Then whatever the kind of, like when you talk about like new technology and like how that can come in, I think it still really comes down to what the business model will be. But is it advertising or subscription? And I guess, you know, I point into this the way it works within, for example, Twitch is kind of a combination of all the above, which another sort of like shout out.

Jakob

Mm.

Dan

Ben Thompson the analyst did a piece on the unified content model. Unified content model, thought it was called Unified content business model. There we go. Which is really talking to that. I mean, I think his focus then was very much around how Netflix started to bring in advertising. But I think that there is no better example of the unified content business model than Twitch and yeah, I think that like if I, if I could like, if I could hope to see something new happen in the next five years in the music industries and wider creative industries, it would be for there to be more experimentation in business model. I fear that when streaming became the model, innovation stopped in terms of business model. And that's partly to do with the way that licensing works, but it's created this particularly brutal, zero-sum game whereby everybody's essentially fighting for market share with each other. And it's just, yeah, I think that's a big part of the reason why the situation looks as it does now.

Jakob

If you were to start a business right now, what would that be?

Dan

Well, wouldn't be talking to you, would I? I'd be doing it. What would it be? I think I would have to do something in line with what I've just been talking about. But.

Dan

Okay, so I think the biggest opportunity that is on the table, just generally, is in... and let's just put a music slant on it, is in Western creators understanding the Indonesian market. I think that this is something that whenever you are... working with an artist or whatever. If you're looking at statistics, Indonesia is always right at the top of the listening figures in terms of audience. I keep on talking about streamers, but I think it's important. I think it's an interesting analogy. So much of the streaming audience within Twitch comes from that region. And yet, you see people in labels, et cetera, talking about like a China strategy or an India strategy but I don't think I've ever seen anybody talk about what's the like Indonesian strategy or like the Vietnamese strategy or whatever. I feel like it's like a part of the, it's, I just don't understand why and I think why it's particularly interesting is because you know whereas in say China which is obviously a huge potential market there's a real disjoint in terms of like ways that people use the internet. Same can be said for Korea as well. It's different sites, it's different ways that people engage. In the case of China, it's literally different internet, know? The Great Firewall. Whereas within Southeast Asia, it's very much the same platforms. And I just don't understand why nobody's really focused on that. Maybe they haven't, I just haven't seen it. But I think that something around there is probably...

Jakob

Mm.

Dan

one of the bigger opportunities. So, you know, working with artists to a business that works with artists to help them understand the streaming ecosystem and particularly Target Indonesia. you go. That's what I would do.

Jakob

As a very precise, can you just break down what do you believe listeners, consumers in Indonesia does that differently from other regions?

Dan

I think it's just a lot of people. I think it's a massively underserved market that is, you know, I'm speaking as if I'm an expert here and I'm absolutely not. This is more just observation, but from what I can observe, and again, I wouldn't start a business just on my observations, but from what I can observe, there's a lot of cultural...

Jakob

Okay.

Jakob

Yeah.

Jakob

Mm.

Dan

There's a lot of shared space, I guess, in terms of social interactions and cultural interactions and that kind of thing. I don't know how, I'm sure there's a much more eloquent way I could describe that. But it's a huge, huge growing market of people. And there's just a shitload of people. Huge market, potential market that I feel like is massively undeserved, but I could be wrong.

Jakob

Hmm.

Jakob

Hmm.

Jakob

Mmm. Interesting like I was reflecting while you answering what would my answer be to that question?

Dan

Hmm, quite a hard question. I've just painted myself as an expert in something that I have no knowledge about at all, but you know, that's what you do when you're on the spot.

Jakob

But I did find it interesting for me answer that it wasn't any of you know, obvious choices because...

Dan

What would be an obvious choice, do you think?

Jakob

Well, it would be something related to fan engagement or something related to solving the black box issue or... I'm not saying it can't be done, but there's a lot of layers. But while I was reflecting, my answer would be besides the one technology business I'm doing music that I'm very bullish about, nothing.

Dan

no such thing as a black box.

Jakob

As of right now, when I'm looking at the industry and I see so many companies and I'm not saying I'm right, there's nothing that attracts me. Like the, you know, maybe I'm definitely not bitter. So that's not why I'm going, but like I've been an entrepreneur for 12 years. Like I've paid my dues. I've done the investment of, you know, sacrifice time, energy, youth, everything. You know, I'm only 32, but I've been there for a long time. And looking at the sort of opportunity cost of music right now as a founder. It's just not there. Like, not right now. I'm excited to see where it is in sort of two to three months after the first few cities have been destroyed by the wave and see what lies there. But as of right now, there are very few things that excites me from a founder's side, which is kind of scary. I did not feel like that a year ago. Obviously, I was maybe less informed than I am now because I spend a lot of time speaking to people like yourself, but... It's a scary feeling. Like, in my own industry, I don't see what I would want to do besides the few things I'm still believing in.

Dan

If I can play the old man in this conversation then. Comes in waves. I've been there. I've been there multiple times. You know, I've gone from inside industry to working for startups to back in work, back inside industry, working to startups and it kind of waves and comes and goes. mean, but I think the serious point there is that startup innovation does come in waves. You have these kind of like matters that evolve.

Jakob

It comes with like...

Jakob

Mm.

Jakob

Mm.

Dan

You know, like I've been involved in two waves of blockchain meta, where there's certain narratives that evolve and people will build on those narratives and evolve those narratives. And then I actually wrote a piece on exactly this one, you know, about blockchain. And, you know, so probably you could probably argue that we're in the trough after the initial AI music wave. and that there'll probably be something else that comes at some point in that world. But I think that like the fact that you're saying that, I think is probably as much testament to the fact that there's no emerging narrative right now around, you know, like what's really, really interesting. And that can become quite frustrating. In my own experience, those are the times when I will often take a step back and stop trying to build a startup and start trying to analyze what are the limitations within the ecosystem that mean that you can't build a startup in the way that you want to. Again, a lot of my professional career has been spent around the infrastructure side of things like copyright databases, licensing process, that kind of thing. After, when I was... working at a startup called Jack. Once we started to unwind that, I went back and worked for ICE, the Pan-European copyright licensing hub, with two very clear goals in mind. One was, how can I make it so that it's easier for startups to get access to copyright data? Another one was, how can I make it so that it's easier and cheaper for... Startups to access rights. How can they get licenses? And then when I was there, I built out a whole data policy and self-service licensing tool So that's my own personal Model has been when the inspiration isn't there when it feels like the narratives aren't there That you can kind of work with Often it's better to try and fix problems And I guess I've kind of like

Jakob

Mm.

Dan

evolved like this over time and I don't want to be a founder anymore. I probably just want to work on fixing problems but yeah, that's my position on it. That's generally how I've gone about it anyway.

Jakob

Yeah, it's very interesting. So for the listeners on podcast, think I'm going to go a bit in like, it sounds wrong, but like a bit in hiding from music industry for like a while. I was still going to do the podcast. I have a lot of articles and pieces that we're going to do on music tech financing. So I'm just still going to be very present, but I think more from a pessimist or neutral standpoint for a while, just because I am going to sort of use my time. on something I believe is worth my time as of right now and then come back to music as a long-term thing. Again, back to this last week, have probably been coding 40 hours and doing music CEO kind of work, maybe five, six, seven, 10, because I don't see how there's a comparable value, which is odd to say. But the truth as of right now. Does that make sense?

Dan

It makes complete sense to me as somebody who's been through the ringer multiple, multiple times. think... I think... Well, it kind of goes back to that point we were saying, which is that if you allow working in the music industry to be like an abusive relationship where you kind of feel like you're being kept there because you feel like you have a duty to be there and you're not getting from it what you feel like you need to...

Jakob

Yeah.

Jakob

Mm-hmm.

Dan

then it's probably worth thinking about that relationship. But I think that taking a step to the side, by the way, for what it's worth, did exactly the same as you last year. I quit everything and I taught myself to cope from scratch in three months because I just needed a bit of a different perspective on things. My kind of like... conclusion from that was that I can do that but I'm really way more interested in like the regulatory policy side of things you know I've kind of got like the commercial experience and I've got like I feel like I've got a comprehensive and relatively unique perspective across like the CMO, copyright management, startup, rights holder create an investor perspective. And the business models and the strategies and the narratives are important there. But I want to take that and move that into more of a regulatory perspective, just helping to shape the macro environment rather than trying to optimize within it. Well, that was an eloquent way of putting it. So that was my outcome from that process. But I do think it's important people go through that, you know, if they feel like, if they're not excited fundamentally.

Jakob

Mm. Yeah, it's an odd way to sort of end a podcast, but I think it's very relevant and it does play off the, I don't want to call it negative energy of your LinkedIn post, but for me it was just very, I liked it. Like I liked that the person that I believe is very, very for thing about the industry, but also really understands it deeply. can write such a LinkedIn post and that's why I wrote you. Like, Dan, I really respect you and I love what you said. Get on the podcast and that's for once, just, you know, be real. And, you know, I'm being real right now. I think you're being real. Let's see what the future holds. You know, it might be bright. It might be good. It might be fun. Yeah. I don't know.

Dan

Yeah. It will be bright. It will be fun. It just, there's a winding road to get there. Look at me. I'm being the positive one. This is so unusual. I'm usually the negative one. Like what's going on?

Jakob

Hahaha

Jakob

I'm tired, I have three kids and I have those to play, that's it.

Dan

I don't know. Cool.

Jakob

Great Dan, well it's been a pleasure. I'll probably see you sometime soon. It's been a while, but yeah. Bye.

Dan

Yeah, no worries man. Cheers, thanks for having me.