Lifecycle of a Song: Building a New Ecosystem of Services for an Established Market
Lifecycle of a Song: Building a New Ecosystem of Services for an Established Market
Utopia built a centralized platform that powers a set of new services for all stakeholders of the music industry, from creation to consumption. Building tech for an entire industry can only be achieved by looking holistically at the industry's value chain. In this session, Nicholas will discuss how Utopia are building a new product ecosystem - a growth partner to an industry in a highly innovative time of change. Nicholas will look at the challenges and successes as they strive to achieve a utopian experience for the music industry.
- Start/Position: Creating new revenue streams in an established market - Determining the Utopia growth partner positioning: Enabling the platform to provide services that enables all partners to grow
- Structure: Complexities in building the core platform that powers distributed services to cover the whole value chain
- Accelerate/Scale: Growth direction through both organic and programmatic M&A
- Integrate: What is the right way to bring acquisition technology into your portfolio
- Mature: Creating an ecosystem of products: Defining the product portfolio strategy
Nicholas Goubert, Chief Product Officer,Utopia
So hi everybody my name is Nicholas Goubert you could go there and Product Officer at utopian music. And today I'm going to walk you through a little bit about the music industry. And a little bit more about what Tokyo is doing within the music industry, what we are working towards, and how we are leveraging big data and advanced technology to level up the whole music industry. But before we get started let me just give you a very quick introduction to utopia. So utopia is a Swiss bass music FinTech company. So what it means by that is that we basically position ourselves as a growth partner for the whole industry. And we want to level it to level up the whole industry by leveraging technology and big data but also having a deep understanding of the music industry so that we can really work with all the existing stakeholders in order to make the world better and ultimately lead to what we are what our contribution to make the world better is to enable fair play by for every play. And as a word of introduction here for those of you who are not familiar with the music industry, it's just to give you an example. And I think it's going to resonate with everybody sometimes as an artist when you create a piece of music and your music is being consumed somewhere. And we'll go more into the detail of the lifecycle in a song during the presentation. Things can happen as your music gets played and you expect to get some earnings from that through your royalties. But sometimes for a very different reason that we enclose under what we call the data gap. What happens is that either you never get paid as an artist or you get paid up to several years after your music has been hurt. So it's a little bit if you think about it. It's a little bit like if you were out there ordering pizza in a restaurant eating a pizza and then you pay for your pizza two years down the line. Just imagine how the restaurant will thrive in this type of environment. So this is the core reason for a utopia of existence utopia is how we make sure that by leveraging technology we ensure fair playing for every player so that they are more creative and can live for the music and every single stakeholder and existing stakeholder within the music industry can really benefit from all of us through technology levelling up the whole industry. Now let's dive a little bit deeper into what it means. So the whole lifecycle of a song is something pretty complex. But if you look at it at a very high level it starts with a creator creating a piece of music.
And then for that music to be heard and to be consumed he goes through several steps. So either the Creator will partner for example with the label to be able to manage their career and or now there are a lot more artists also who are going directly to markets. And for that they are using different services like the label will do. We're talking about publishing your music to be able to manage your copyright distributing your music and your music can be consumed in all these what we call DSP or digital service providers. Think about this, you don't have the Spotify of this world or YouTube when there is any other distributor out there. But also retailers and physical like physical distribution and vinyl, in particular, is really thriving. And then of course there is all the piece of the industry that is working towards managing the copyrights. So the copyright is basically who owns what part of the music based on if you've been creating the lyrics or you've been creating the music and generally there's a split around that and different types of rights without going into the details. And these rights through the consumption of music. If you combine the consumption of the music and the rights associated with this piece of music then you are entitled to some royalties. And there are a bunch of companies and stakeholders in the industry who are working around the management of these copyrights and the management of the royalties to be able to pay out the artists for the work. And then there are a little bit more other types of stakeholders in the industry. For example, the investors like you probably have heard of a lot of artists selling the catalogue for quite a lot of money recently and there's been more and more of this simply because music is an asset that is pretty interesting. So there are a lot of investors who are interested in better understanding the value of a catalogue, the value of a song, and the whole economic value of that. And that's exactly at the core of why we are doing what we are doing to serve all these different industries. Another example here for those who are not familiar is a creative agency. So there's more and more content that is produced in this world today on every piece of content as some type of music associated with it some type of sound and licensing music for this type of specific usage either for a commercial or for the brand or for an old experience is a pretty lucrative business for the artists just to give you an idea, for example, ACDC got pretty rich actually and got a big of like the get a big check when sunder stroke was used in one of the Marvel movies from the tour. So Another example that has been running around lately is Running Up the Hill by Kate Bush was used as one of the main parts of the song's track Stranger Things and was a big hit on Netflix. And it's a 20-year-old song. And it brought quite a lot of money for the owners of this musical agent. So there are a lot of different actors and players within this value chain. And it's a very complex value chain. And that's another way of looking at it is that on top of all these differences like all these different players here what is happening basically is that there's a lot of data that is being produced within this ecosystem. But for some reason, it's still very difficult to answer some very simple questions. That will sound simple to everybody outside of the music industry. A simple question like What has been played? Where loans that piece of music? And how much and who should get paid for that music that has been consumed? And for various reasons answering this simple question is pretty difficult. And some of the reasons I listed here on the slide. So of course like every complex ecosystem there are a lot of different silos of data out there. So a lot of data is produced but it's living in different silos. The licensing is pretty complex and it has some geographical complexity associated with it. So you need to license your music in a different territory. The rules are very different in the different territories. And so. So if you're an artist living in one part of the world and you listen to music in one part of the world don't be surprised if your music is consumed in another part of the world. And you never see the colour of the money that you are all for this type of music just because everything is happening eliminating silos in this world. Also as with every data play the metadata is a tree it's extremely important just to be able to for example just identify who owns what and who owns one part of the copyright and make sure that the metadata is correct and can be used to process the data and to be able to pay the right person understands what has been consumed and who owns what is a pretty complex thing to do. And if you look at that and on top of that you look at the amount of content and the amount of music that is created on a daily basis the problem is just getting bigger and bigger and bigger. And this is what we call the data gap. And this is exactly the mission of Utopia because being able for us to fulfil our mission of fair play for every player will allow more creators to lead from their hearts. We need to close that data gap. And that's exactly what utopia is working towards. Now let's look at Utopia's fundamentals and take a step back after this little deep dive that we did into the music industry's different stakeholders and what we call the lifecycle of a play or a song. Ultimately we think about the music.
You can think about music from three different angles and one of them is the creation of the music. On the other side is consumption. And then the third piece is the payment and Utopia platform and business unit. As you will see in the next slides. The way we are structured to answer this question is really at the core of it. And it's very simple. If you think about it from a 10000-foot view, what we want to make sure we are capable of answering is one's right to the song being played, what was played when, and where and who should get paid for that. Looks like a pretty simple business statement or question to ask. But considering everything I've said before about the data gap and all that it's actually a pretty complex journey that we are on. Now how do we get to basically close this data gap? So the way we are structured looking under the hood and how we structure at Utopia to be able to answer this question at the core of everything we do see the utopia platform and Utopia platform is a big data platform with artificial intelligence and machine learning engine that allow us to absorb the data clean up the data make sense of the data and hence the data is who made the data? And also being able to answer the question before what was played when who owns the rights and then making sure that we can provide the payments for them. And around this platform that is really at the core of Utopia sits different business units. And the reason why we operate like that is that the platform you can think about really is the heart of what we are building and the business unit is the place where using the platform and leveraging the platform we create dedicated services for the different stakeholders that I was telling you about before. And we really create the services leveraging the platform so that every single player in the industry can do their job better. Basically, we are here to help them enhance their existing solutions by providing dedicated services that leverage our platform. And here I'm not going to go through all the different business units. And you can also think that based on this platform the structure gives us a lot of flexibility to spin off new business units as needed and as relevant. And really to cover the whole industry because our positioning is really to be a growth partner for the whole industry. Because we strongly believe and we have done a lot of analysis around that date as we managed to close that data gap we will be able to level up and grow the whole industry by a multiple of up to four. So by unearthing data by creating more complete data the source of truth will be able to basically enhance the whole industry and make it grow even bigger. So it's a pretty complex organization to run and how we got there. So basically just to give you an idea of HyperScale. And before I jump into how we scale up we went in in the course of the last 12 months we weren't four but 150 people to about 1000 people. And how we get there as a scalar is a mix of organic growth and programmatic m&a. And by combining these two areas of the two vehicles for growth we basically are leveraging the best of both worlds.
So we've been using programmatic m & a At first to be able to see the different business units. So there we are accelerating our roadmap. And we're also leveraging the best companies in the industry to be able to instead of starting from scratch within each area really leverage best of class that allows us to start off a business unit pretty quickly that allows us to already start with an existing product portfolio within each of these business units. And then and then of course it's also learning that allows us to grab some market share within the industry and hit the ground running if you wish. And then what we are doing we are complementing that with organic growth. And also and also we are really working on that super scale if you think about it almost like a Denix growth in terms of an employee over the course of 12 months. One thing that is extremely important for us is to manage the culture and keep our culture but at the same time be able through the structure that we have with the platform and different business units to give in a lead way for every business unit to continue working and to basically run. So an interesting mix of organic and programmatic m&a has helped us to get started and now the acceleration and the scale continue. The only difference now is that we are using programmatic m&a to even accelerate the roadmap within the business unit now that we see a different one of them and also accelerate the roadmap within the platform. There are different components within the platform. And we are always on the look for the right companies to acquire that will allow us to either acquire technology that we would have to build before or grow faster and accelerate our roadmap. So this is really what has allowed us to scale up that fast and before moving any further in the presentation. Another thing that might be interesting is the way we work within the platform and as well as within the business unit we work obviously within the product creation space. So product data design and generating you through cross-functional squats give a lot of autonomy within the different squads and within the different business units. And that allows us when linking that to M & a. When we do an m&a of course there's sometimes a transition from the way that the company we acquired was operating before and bringing them into the way we operate. But before because we do that much like simultaneously in a different view we are learning very fast to do the right integration. And we are really really pushing the boundaries when it comes to cross-functional work. And we can go deeper into that space at some point. But it's really interesting. For me as a product officer and working very closely with our technology officer and our and our data officer it's really an interesting challenge to be able at the same time to give enough autonomy to the different teams to move forward and at the same time within this ecosystem of the business unit making sense and driving that with a coherent strategy. So a very interesting challenge for any product creation leader out there.
Ultimately what we are trying to do through all these scalar is remember the platform is really the core. So you can think of the platform as the heart. And then it's pumping blood into the different business units. So the platform is really the idea is by supercharging the platform by acquiring these different companies and different capabilities but also by creating a network effect between the business unit and the platform. So not only does the business unit leverage the capability of the platform but they also pull back and bring back data from their services and from the customer within the platform. So that we create that network effect between the platform and the different views that allow us to always improve the platform services and then in time that will also improve the dedicated services created in the business unit. So better service for the customer. And then we will trust the customer to share more data with us through the process. And here goes the flywheel that allows us to grow the data capability and grow the data set that we are working with, creating more insight by combining more datasets and then enhancing the existing services, and then spinning off new dedicated services. So it's all about supercharging the platform that is at the heart of our ecosystem. And ultimately if you think about it and think about what I was saying before about the data gap the role of the platform is really to basically destroy all the silos that exist or not destroy is a bit of a strong word but just to eliminate the silos and bring as much data point as possible into a central place of truth. So that we can create insights that allow us to simply answer these questions that were on the slide before which seems pretty simple but require a lot of data processing and a lot of and a lot of data crunching power which is what was played wounds the data to display and who needs to be and who needs to be paid for this consumption of the heart. So ultimately that's what we want. That's what we want to do. And that's why we are looking at aggregating and creating and agreeing on as many data points as possible so that we can create this unique source of truth that every single stakeholder in the industry can leverage to better serve their own customers. So we are really building an engine and a data platform and dedicated service within the BU that helped the whole industry to level up. And we really want to position ourselves as a gross partner for the whole industry. Now by doing that then by closing that data gap of course he's not he's not a journey that he's going to hand in in a day or two or week a quarter and all that he's wearing for the long term. And he's going to take a while to get there. But every single piece of data that we can leverage and create more truth and that we can create data inside of that inside out and can be leveraged by the business unit will get us closer and closer to this utopian view where there is fair play for every player because there is full transparency on the data.
There is the completion of the data. So the data is clean, consistent, coherent, and complete so that everybody can benefit from that thriving ecosystem. And just as a reminder by doing that not only do we power the existing business around the music industry but we also allow that ecosystem for growth over right. The number we have in mind And then what we are working towards is that once we close that data gap we believe that we can grow the whole pie if you wish by a factor of four or five. So that's really what we are after. So we are really trying to close that data gap in order to be able to create a thriving ecosystem so that the whole industry can benefit from it. And ultimately the creator is the ultimate beneficiary of that. Because our goal every day is to come and enable the creator to live from their art and to produce more music and that music to be consumed in the best way and to be monitored so that they can be paid for failure. So we really are a steward of the data we just are here to enable the whole industry to thrive. And it's pretty exciting to leverage Big Data, artificial intelligence, machine learning, and all other types of technology to enable an industry that we all really love, right? It's pretty hard to find anyone who doesn't love music who doesn't consume music or create music or anything music is what brings us all together. So it's really an interesting journey that we are on. And it's only the beginning. But we already see the results of work and from some of our work and we are at the beginning of the journey. So we'll keep on pushing in that direction. And ultimately everything we do is towards providing Fair play for every play and that's really the mission we're on. And I would like to leave you with that. And thank you very much for listening. Bye