Monday, November 21, 2011 - 1:05pm
Former Live365 exec Rags Gupta suggests the reason we see on-demand music services starting-up in Europe (and not, say, Silicon Valley) is that it's simply easier to license the content there than in the U.S. As such, "investors in Europe aren’t as jaded when it comes to music startups as their U.S. counterparts," writes Gupta. "Index Ventures stands out in this regard. Bolstered by their success with Last.fm, they’ve added Songkick, SoundCloud, and RJDJ to their portfolio in recent years."
This apparent hospitality towards on-demand start-ups doesn't translate to Internet radio, unfortunately. Fragmented licensing regimes from country to country make it a virtually impossibly expensive and complex matter to license music separately for every country. This means many U.S. webcasters (e.g. Pandora) simply don't make their streams accessible outside the United States.
Last.fm (purchased by CBS for $280 million) and Spotify (now with more than 2 million paying customers across the 8 countries in which it's available) are two obvious examples of music start-ups coming out of Europe. Another is French-based Deezer.
"The minute that I tell the major music labels that I am not interested in signing for rights to the U.S., the negotiations over terms become much, much easier," Deezer CEO Axel Dauchez recently told Reuters. The company apparently has no plans to launch in the United States.
Read Gupta's piece in GigaOm here.