Music Updates

How Splice Became the Hottest Platform on the Beat Market

“The music industry of 2017 wouldn’t have found KARRA in a million years,” says Matt Pincus, a member of Splice’s board and the founder and former CEO of SONGS Music Publishing, which he sold to Kobalt Capital in 2017 for a reported $160 million. “They weren’t looking in the right places for artists with superstar potential,” he continues. “Meanwhile, she was sitting right there.” Pincus first heard of Splice at SONGS during a discussion about the publishing split for rapper XXXTentacion’s Billboard Hot 100 hit “whoa (mind in awe).” When he asked about the song’s unusual keyboard hook, a SONGS staffer told him it came from Splice. “I said, ‘What the f–k is Splice?’ ” recalls Pincus. Then he discovered that nearly every young writer and producer he knew was using the platform “and loved it.”

Pincus has a significant interest in Splice’s success, since he has invested “tens of millions of dollars” in the platform. “In music creation, the next generation of music companies will be about ingredients for collaborations, not finished songs,” he says. At the time of his first investment, during Splice’s 2019 series C funding round, the platform had 250,000 subscribers. By its next major round of investment two years later, that number had more than doubled, and Pincus says the company is approaching $100 million in annual recurring revenue.

Splice’s growth reflects, and is enabling, a massive shift in how songs are written and recorded. The kind of professional music production that once took place in $2,500-a-day recording studios filled with electronics, instruments and session musicians now happens in front of a laptop running Pro Tools, Ableton Live or other digital audio workstation software. For better or worse, Splice can also help eliminate the need for musicians, who can be moody and unreliable, as well as expensive. With a DAW and some sample packs, anyone can be as self-reliant as Prince.

The market for beats and sounds is part of a larger “creator economy” that’s now being recognized as the hot new music business investment. Beatport bought the sample store Loopmasters, investment firm Francisco Partners acquired Native Instruments earlier this year, and Goldman Sachs invested in Splice in February. Splice has plenty of competition, including Loopmasters, BeatStars (where Lil Nas X bought his “Old Town Road” beat for $30) and Airbit. But the financial potential of the sector is so significant that MIDiA Research managing director Mark Mulligan wrote in April that “the music industry now has an additional gravitational force at its core” — besides labels.

So far, says Mulligan, “Splice has managed to establish a market-shaping identity — it’s synonymous with the creator tools space, the same way Hoover is synonymous with vacuum cleaners.” Splice is also moving its part of the industry from a retail model, where creators would pay for particular sounds, to a subscription model, which can draw in more users. “That’s the most important underlying business shift the space is going through — the move from sales to subscriptions,” he says. “Sound familiar? It’s the exact same thing Spotify did to iTunes.”

The sample pack business is lucrative enough that Splice has been able to attract name creators, including Boi-1da, SOPHIE, Just Blaze, Scott Storch and Travis Barker. But the most popular packs are from less famous musicians like Madden, or Vaughn Oliver, a Canadian DJ whose Power Tools kits, released under the name Oliver, have been used in Doja Cat’s “Say So” and Dua Lipa’s “Don’t Start Now.” Ian Kirkpatrick, who produced and co-wrote “Don’t Start Now,” suggests that pop music’s recent disco resurgence can be traced to Oliver. “I wonder how much the direction of pop music is dictated by sample sites like Splice,” he says.

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