Water & Music reposted this
Just published my own analysis on the significance of Suno's $125M funding round for music-tech, exclusively for Water & Music members. A lot of takes on Suno's $125M round emphasize how the company has virtually no official endorsement from the music industry, and is likely trained on copyrighted data. While these are critical factors to consider and I do mention these points in my analysis, I decided to put things in perspective, and focus instead on the history of music-tech startup funding at large — and why Suno represents a watershed moment in the evolution of this category. Suno's round is not only the largest investment ever in a music AI startup, but is also one of only four music-tech mega-rounds ($100M+) to take place after 2018. In contrast, 16 music-tech mega-rounds took place from 2010–2018, focused primarily on music streaming and consumer hardware companies (Spotify, SoundCloud, Sonos, Beats, etc.). The music-tech market has since cooled down significantly, due to a mix of factors such as the COVID pandemic, slowing growth in subscription streaming revenue, industry consolidation, costly music licensing fees, and uncertain macroeconomic conditions. Suno's round is the latest milestone in a new era of investment in the category, focused on areas ripe for disruption beyond traditional music streaming and consumption models (think live events, social video/UGC, fandom, and, in this case, artistry itself). Read my full analysis below — curious to hear your thoughts! #musicbiz #musictech #ai #musicai #aimusic #musicindustry #musicbusiness #suno
Dae Bogan
2mo
I wrote a piece 10yrs ago & every word rings true today: "Putting lawsuits aside, it is important to understand the IP implications early on as it does affect your bottom line. Not taking into account the royalty payout requirements for the various licenses you’d need means your profit projections will be dramatically skewed (which doesn’t make for happy investors). I strongly recommend that anyone considering launching a music tech startup (or a startup that incidentally uses music, such as any video platform that allows UGC or a website with music as a complement to the core product offering) consult an IP attorney or at least a music business consultant who understands IP as it relates to new and emerging business models, like the author. Lastly, founders should consider the fact that the music tech companies who many aim to imitate have been beat into submission, sued into extinction, or raped of equity over the years. Napster, Youtube, Grooveshark, Myspace, Limewire, ReDigi, Veoh, iMeem, Vevo, Spotify, Thumbplay, Songbird, and many lost souls who’ve you’ve never heard about have all faced the big music machine. For those big enough to kick and fight, they may prolong the inevitable, all while not turning a profit—Pandora."
Derek Hoiem
3mo
Yes, excited to read. I'm not excited about companies running ahead for the dollars on artists backs. There's a right way to do this, and artists don't have to lose. Do a proof of concept, raise the money, pay artists with opt-in, train the models, and everyone's happy.
Boris Mihov
3mo
I'm not seeing it Cherie Hu. Don't be fooled by the investment amount, it's just costly to run any gen AI platform. Full thoughts: https://www.linkedin.com/posts/borismihov_suno-raises-125m-to-become-the-chatgpt-activity-7199098886576078848-WoPX?utm_source=share&utm_medium=member_desktop
David Baird
3mo
Music creation and distribution have always reaped the lion’s share of investments. Totally agree: Live events and fandom are next!
John Gaenzler
3mo
Lots of naive investors out there who will be very disappointed in a matter of 18-24 months. They are very misguided to believe people will pay for this service.
Great share. Look forward to digging in.
Chase Baker
3mo
Saying the quiet part loud at the end of the article! But really that’s Suno’s “statement” for the time being.
John Lucchetti
3mo
Great work as always. I just ordered a Water & Music shirt.
CEO at Stereofox • Senior Product Manager at 8fit GmbH
3moTo me, it seems like another jump on the hype bandwagon. Every year we have a new trend where VCs rush to throw in some money and the reality is that (as someone else mentioned here) there will be a lot of disappointed people in 1-2 years time. This time, however, even more immature than usual (for VCs). Disregarding the ethical issues around the existence of this product and the unclear source of data on which the model has been trained is off-putting.