Turntable Comes Clean About Funding. Next Up: Label Deals and More Users.
So now it’s official: Music site Turntable.fm has raised $7 million from Union Square and other VCs, and has an iphone app.
In addition to the angels Turntable has announced — who include Lady Gaga manager Troy Carter, former Facebook sales boss Tim Kendall, and big media investor Vivi Nevo — the company has also brought on other big music industry heavy hitters as investors/advisers. Turntable won’t confirm their names, but I’m told at least a couple of them hold big jobs at music labels, so go ahead and guess if you’d like.
Oftentimes the angel list accompanying a funding announcement isn’t much more than a vanity exercise. But in this case the news is important because Turntable is indeed trying to negotiate licenses with the big music labels and publishers.
That’s a change in strategy for Turntable, which had earlier argued that it wouldn’t need licenses, because it was a “non-interactive Web radio service” a la Pandora. So having executives at the big labels who are also investors is a nice advantage for Turntable to have.
And they’ll need as many as they can get, because they’re going to try to create a new kind of license. Basically they’re gunning for a hybrid license which would have them paying more per stream than Pandora does, but less than a full-fledged, on-demand interactive service like Spotify ponies up.
As I wrote in August, the notion of creating a brand-new digital music license and getting buy-in from all the big players would have seemed ridiculous a few months ago. But for whatever reason — lots of folks point to Spotify finally getting its U.S. deal approved after two years of work — people both inside and outside of the labels are murmuring positive things about what Turntable wants to do.
It will still be expensive, though — assume the start-up will have to hand over equity and a recurring royalty stream to make this work.
Just as important for Turntable: Parlaying its buzzy status into something regular people might actually want to use. Turntable says its users stream a million songs a day, but doesn’t say how many people are actually using it. But it’s clear that so far this is primarily something that appeals to a relatively small group of musical digerati.
And that group appears to have been shrinking since the company’s first burst of publicity this summer, according to metrics from AppData.
*One tiny correction for other reports about Turntable’s funding: Lotus founder Mitch Kapor, who had invested in Stickybits, the company that famously pivoted into what we’re seeing today, isn’t in this round. Via email, he says that he didn’t sign to back the company once it became a music start-up because his Kapor Capital “is focusing now on education, health care, and other positive social impact areas.”