Solving the Music Startup Catch-22

[UPDATED] The difficulty, time and cost of licensing music has stymied an untold number of startups and scared off countless more investors. Crunch Digital has created a solution. Their Digital Music Sandbox will offer music startups a direct conduit to limited term music licensing without advances or minimum guarantees; and founder Keith Bernstein shares an advance look at this much needed service.

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By Keith Bernstein, founder of Crunch DigitalRight now, music startups face a quandary — launch without licenses and cross your fingers that the industry lawyers don’t come after you, or wait until you can get licenses and watch as other rule-breaking players with deep pockets launch a similar product. Labels and publishers, on the other hand, face a daily deluge of emails and pitches from innovators and startups, and even those content owners with the best of intentions who want to move tech forward are often overwhelmed by the number of inquiries vying for their attention. The music startup landscape has cooled off and bifurcated in recent years, as many potential entrepreneurs and investors have simply become too frustrated with the licensing process and decided to give other verticals a shot. This leads to a lack of innovation, which stymies new business models and new revenue in the music business. Who knows which startup may do something groundbreaking?

At Crunch Digital, we saw this was happening and decided to take action to help. With the launch of our new music licensing “Sandbox”, we’ve created a platform where application developers can prove their concepts and features before engaging in big music licensing negotiations. With our sandbox, approved startups will have a chance to access full catalogs of music (subject to some restrictions) from participating major record labels and publishers as well as some indies, and not just the stuff that nobody wants to hear, either. After all, no matter how great your idea is, if all your music is pulled from a slush pile, it won’t help you to find an audience.

As a first step, innovators and startups will need to submit an application to Crunch to see if they qualify. Crunch will vet the applications — as much as we want to give everyone a chance, we don’t want to waste anyone’s time, either. Once an application has passed muster, Crunch will work with the applicant to help present their idea to participating labels and publishers and request a limited use license for access to their catalogs, either for a period of time or until the company hits a certain success threshold. And if a participating label or publisher truly loves what they see in a company, they can start the conversation to “graduate” from the sandbox and move on to a long-term licensing deal.

For VCs who shy away from investing after reading horror stories about music biz lawsuits and the costs and complexities of music licensing, the Crunch sandbox gives them the opportunity to put those worries to bed and be part of companies they believe in.Crunch is a trusted, independent and privately owned company that is positioned to provide this “sandbox” solution that will enable developers to license music – and do it faster. With quick access to quality authorized music, developers can prove out their product and features, gain market traction, and attract further investment for a full product launch. Who knows, maybe we’ll even find the next billion-dollar app amid our first class of applicants.We are really excited to announce that the sandbox will officially launch in January 2018, and we are already accepting applications at www.digitalmusicsandbox.com.