“[Katz and I] were talking in the early days about blockchain, cryptocurrency and what a stock market for music looks like,” says Senderoff, who also runs her own artist management firm Something Gold. “We came together on the need for an investment vehicle that would advise the music industry on what kinds of technology they needed to integrate.”
When RISE launched, Senderoff says, “nobody was focused on music tech.” But one year in, the pandemic forced the music industry to tap into digital revenue streams like virtual concerts and non-fungible tokens (NFTs). As the industry warms up to tech, RISE’s mission is fittingly astronomical: Senderoff wants to transform the entire music ecosystem value chain, from creation, registration and distribution to fan engagement, touring and merchandise.
“It’s not an overnight process,” she says. “It’s pushing a boulder up a hill.”
While examining startups, what trends emerged?
There are a lot of problems that entrepreneurs who look at the music industry see, but does the industry want to solve that problem right now? For example, we got inundated with rights management solutions built on a blockchain. We believe in the future of rights management on blockchain, but are the complexities of the industry in a place where it’s possible for a company like that to succeed right now? No.
So what problems are ready to be solved?
We’re hyper-focused on two buckets: new revenue streams and improving ROI. The music industry is challenged when it comes to making strategic decisions on where and when to spend money for scale. I’m focused on new revenue streams because I believe that as we evolve from the traditional label model, there are going to be opportunities to build businesses without needing to be in the stranglehold of a major label. That doesn’t mean I’m anti-label. I’m not. But I do believe that there is a subset of artists who can do it independently and make a great living.
What are some examples?
Our overall strategy is to have portfolio companies that an artist can use at different times within their rollout. Community is tangibly useful within seconds. Once you put out a phone number to your fans, you can communicate with them directly in a way that doesn’t feel like a marketing line. We’re here to tell stories and share experiences, and I think Community is a two-way street.
Community is a place for intimacy, whereas Audigent is a place for broad amplification of messaging. J Balvin has worked with Audigent for the last couple of years to build out revenue lines from music to brand partnerships to merch [using] precision targeting to find his fans [with ads]. Community might be used on the front end to make an initial announcement, but then Audigent might be used every day as an ongoing campaign to promote everything.
What is Scooter Braun’s role in RISE?
Look at Scooter’s wealth of experience. He built [Justin] Bieber from absolutely nothing. There’s almost nothing he hasn’t done or worked on. When you’ve encountered it all, you know what to do.
What have you — and the wider music industry — learned from the pandemic?
That strategy is going to win no matter what. There isn’t a shortcut. We saw the cash-grab frenzy around NFTs, and we saw people fall short of their expectations because they didn’t understand what they were getting into. A lot of artists just did one-off NFT drops. They were in a race to get an NFT out for fear of missing out, and their fans didn’t come because consumers didn’t understand crypto yet. What was missing was a tool set that was community- and mass consumer-driven, that would speak to an audience that isn’t crypto sophisticated.
Look at livestreaming. We had passed on about 15 livestreaming platforms before COVID-19, and then they all came back to us when COVID-19 hit, like, “Ha! You were wrong.” But what happens when touring returns? How does a band or an artist integrate livestreaming, and what is it going to mean for your bottom line? If you want to be a leader, you have to strategize your long-term plan.
How can artists better bridge their online and offline presence?
One area ripe for the addition of metaverse capabilities is touring. We need to add the ability for fans to collect [digital] items that are tied to particular shows and allow access to different items based on your [level of ] fandom. The next version of the fan club is immersive, where fans can take part and connect to an artist via a social token — by owning it, they can buy tickets sooner or get into meet-and-greets or access limited-edition merch.
How soon do you think that the metaverse — the concept of a shared, entirely virtual world — will become a reality?
I just saw [Mark] Zuckerberg announce that Facebook is going to be a metaverse company. I think we’re two to three years away from the larger, visible use cases. That will begin with the rise of [augmented reality] in the next 18 months and seeing more utility of NFTs — assets that can be the economic drivers of a metaverse. In order to have a virtual world, you need buy-in of virtual products.
This isn’t the first time we’ve seen hype surrounding blockchain. What’s different now?
The technology — the pipes of blockchain — is fundamentally different. This is not just an app. This is technology that can allow for a different kind of accountability and audit of business. As we see larger platforms like Amazon start to integrate cryptocurrency, it’s going to change how we think about everything. You can’t be caught with your pants down at this point.
Can blockchain’s driving concept of decentralization ever take off in the music industry, which has long been predicated on centralized power?
I don’t think that the goal should ever be so black and white. It should never be about complete decentralization. That’s why I’m not anti-label. The labels are incredibly important because it takes an army. The reality is that decentralization will work for certain products and certain artists, just like anything we do in music works for certain artists and not others.
Both music and tech are male-dominated. Is it part of your mission to equalize the playing field?
I feel a great responsibility to keep going, not only for me, but for a larger community of women. I hardly take vacations — I am always, always working. If nothing else, I’ll chisel away and show certain males who will impact a lot of other women that they have to look at something differently or they have to listen more. The more you sustain, the more people see that they can do it, too.
How does that affect your work at RISE?
None of our portfolio founders are women, and that was not my choice. I’m making investments based on ideas that I think hit the right timing and are viable. Any time a female founder comes across my email, I jump toward it, and if nothing else, I focus on [them in] a mentorship capacity. But the systemic problem is not the fact that I didn’t invest in a female founder just to invest in a female founder. It’s that we need to encourage more female founders to start more companies. My answer to that is continuing to mentor any women that cross my desk and continuing to be at the forefront of innovation and tech as a woman.