Just go to any Music Hack Day -- like the recent ones in New York and at the MIDEM conference -- and meet the developers there working for free to create new and innovative music apps (many of which never see the light of day), and it becomes immediately clear this is a space full of tremendous creativity, contagious excitement and great potential.
The space is about to get even more interesting thanks to a deal between Universal Music Group label Island Def Jam (IDJ) and music app developer platform the Echo Nest. Under the terms of the agreement IDJ will become the first major label to make its entire catalog and roster available to developers in an open API (application programming interface) format.
The companies plan to announce the deal later today during a panel at the Digital Music Forum East conference in New York, but Billboard gained exclusive access to the details in advance.
It breaks down like this: developers signing up to use the Echo Nest platform will have the option to access the IDJ catalog without having to contact the label in advance for permission. Developers simply agree to the terms of service agreement and then are free to create any app they like using the label's catalog with no upfront cost to license the music.
Under the terms of service, IDJ becomes the publisher of any app created as a result (meaning they still control the distribution) and will split the revenue of any commercialized app with the developer and the EchoNest. IDJ will also market the app and administer payments to music publishers when applicable. At least initially, apps will be limited to U.S. distribution only.
This is a groundbreaking deal for several reasons. First, it addresses the primary complaint music app developers have, which is that securing meetings with labels to obtain licensing right is far too difficult, not to mention expensive. For smaller, independent developers, it's damn near impossible.
"It's just an incredibly inefficient process," Echo Nest CEO Jim Lucchese says. "This deal is meant to bridge the unfortunate gap between independent app developers and licensed content owners."
APIs are common in the developer world. They are basically a set of rules by which services make code available to other developers who wish to incorporate their features into other apps, so long as they agree to the terms of service before downloading it. No meetings are required. No negotiations are necessary. This deal applies that method of licensing technology and applies it to the aging music licensing model.
Second, it allows IDJ the chance to work with multiple app developers at once to better find the best ideas. Before this deal, IDJ would make an app in one of two ways -- either pay an app developer an upfront fee upwards of $50,000 to create a work-for-hire app that may or may not pan out, or select one of hundreds of app pitched by interested developers in hopes it would strike a chord.
"The matrix of possibilities for deal terms on apps has been relatively infinite," IDJ senior VP of digital and business development Jon Vanhala says. "We've been inventing these terms from scratch over the last few years. The whole purpose of this deal is to streamline it."
What's more, IDJ now has a line of communication to the developer community through which it can make requests. Let's say Justin Bieber wants a new app. Through this deal, IDJ can put out the call to the developer community and then pick the strongest of the litter, and provide direction along the way.
There's no set date for when exactly the API will go live, but according to Vanhala, it's "soon." The first manifestation of the program will likely take the form of an IDJ-sponsored Hack Day-like event, where IDJ and the EchoNest invite developers to create whatever they want, offering the best apps a chance at commercial distribution.
"We love to innovate and we love to be on the forefront of creation," Vanhala says. "Our job is to maximize the potential for our artist releases and catalog, and this is a strong first step to accomplishing that. I've already had a lot of conversations with artists and managers about this, and there are a lot of people excited about it."
The progress of this deal will be closely watched by the label and developer community as a possible template for modernizing the music licensing system. That's no small feat, as music licensing is incredibly complex and lined with barriers. It took IDJ and Echo Nest a year to work the idea through the upper echelons of UMG before getting final approval from all concerned, and both sides are more than aware of the impact it could have moving forward.
"Absolutely this is a test," Lucchese says. "We both recognize this is the way content is going to get distributed to app developers in the future. It's just way more efficient and makes a hell of a lot more sense. But there are a lot of surprises we all anticipate along the way -- around apps people come up with, around some of the rights issues and approvals we may need to get to make some of this stuff happen. You can't anticipate all of that out of the gate, so the idea is to get something out there and get developers to start iterating."
"This view that labels are these big companies just clutching onto their rights and not thinking about innovation is just so not true," Vanhala adds. "We believe the developer community is a creative community that we want to tap into and be a part of and collaborate with."