Music Business

Music APIs are exactly what the industry needs – Here’s why

While the music industry demonstrated an impressive ability to bounce back thanks to its early adoption of streaming, keeping that momentum going will require a streamlining of the process through which tech companies get permission to license music.

Guest post by Jeff Yasuda of Adaptr

Having been in digital music for nearly two decades, I often get the question: How will the music industry innovate and grow? While we are always looking to do more, my answer is typically –it has! Major labels have learned a myriad of lessons from the early days of the internet, returning to profitability and growth thanks to an early embrace of streaming services, the unbundling of services, and a willingness to work with tech companies who ask permission for music licenses rather than forgiveness for infringement. So how do we keep this momentum going? By making it easier for tech companies to get permission.

Anyone who has spent even a day in the music industry knows the significant complexities around music licensing. One label might own the master recording, but publishing rights are likely split between multiple songwriters and producers, who each could be represented by a different publishing company. It’s natural for these rightsholders to be protective of their content considering the costs to produce, develop, and market artists and songs. And ,like VCs, they need to evaluate the risk/reward trade-off before approving a license. So how do we make it worth their while? It helps to get some perspective from the major labels, so I recently spoke with Oana Ruxandra, Chief Digital Officer, WMG.

“One of our key goals at WMG is to make it far easier to license all music. Among other things, reducing frictions around licensing will enable us to accelerate innovation, support the startup community, engender competition, excite our fans with new and evolving ways to interact with music, and get our artists and songwriters more value for their art,” said Ruxandra. “We want to help drive innovation and spark creativity, and Adaptr will help us do just that.”

Troy Carter, a legendary music manager for artists such as Lady Gaga and John Legend, appeared to agree at last year’s NY:LON Connect conference, hosted by Music Ally and the Music Business Association (Music Biz). During his closing keynote, Carter was asked, “What more can the music industry do to foster innovation?” He hit the nail right on the head in his response: “[An] open API! If I have developers building on my API of these rights, I think you open up a ton of revenue at that point. Because now all of a sudden you have very smart people who don’t have to go through all the licensing restrictions, building products that we don’t even know exist, because they have access to the music.”

The API approach, in which tech companies build their products on top of a pre-cleared catalog of songs and features, not only opens the gates of innovation by providing easy and legal access to content for tech companies but also ensures rights-holders get paid for each use of their music. In fact, this approach has already proved successful in other industries.

Twilio, a communications platform, provides developers with open APIs to add voice, messaging, and video to their apps. Prior to this, it was incredibly difficult to add voice calls to apps. Twilio has leveraged its IP telephony know-how and have allowed developers to easily add in-app voice calls. This is all done through an API. Twilio gives developers the ability to skip the difficult part and get the ball rolling.

Similarly, Stripe, a payment processing company, integrated an API to handle complex credit card processing. Credit card processing was traditionally an incredibly difficult process that required months of work with several financial intermediaries. Stripe removed this headache from developers and provided an easy way to handle credit card payments within a day. Like Twilio’s API, Stripe’s API removed the laborious aspects of implementing something that traditionally has been difficult and made it easy for developers to focus on their core competencies.

By applying APIs to music rights, we can unlock incredible new possibilities in the music industry without losing out on revenue. In fact, rights-holders could end up making even more money as they ride the wave of technological evolution, which is now rising higher than ever as the COVID-19 pandemic forces the world to find new ways to connect. At Feed Media, we’re excited about the future of music and tech, and look forward to being a part of the next wave.

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