music festival crowd

The crowd at a summer music festival in 2013.

Ollie Millington/Redferns via Getty Images

Two trends dominate today's music business: streaming services provide great promotion but unsatisfying royalties; and revenue from live events takes on a greater significance each year. These shifts in the marketplace are changing how companies do business.

One approach is to merge streaming services with concert discovery. Pandora acquired Ticketfly to help connect listeners with artists and, as a result, concert tickets. Rhapsody and Deezer offer ticket sales and other items through integration with BandPage. Other streaming services will undoubtedly find other ways to bring listeners to concerts.

Now comes MAGNIFI, a Bay Area-based company with the goal of helping people find nearby shows. MAGNIFI cross between a concert-tracking service like Songkick or Bandsintown and an Internet radio service. Its goal is to collapse the process of listening, searching for shows, organizing with friends and then buying tickets. "That’s too many hurdles to go through before experiencing great live music," CEO Toby Gabriner said in a statement.

MAGFINI is actually a rebranding and retooling of Deli Radio, a service built on the same premise of helping music fans discover artists near them. Deli Radio raised $9.4 million back in 2013 to build a service that streamed music based on the listener's location.

Held over from Deli Radio is a direct licensing arrangement in which artists trade royalty-free streaming for the promotional tools offered by the platform. That promotion used to be the opportunity to be heard by potential concert attendees. Now MAGNIFI puts an artist's music in front of a potential ticket buyer. Partnerships with ticketing services ensure customers don't leave the app to purchase a ticket.

Royalty-free streaming does have the advantage of streaming beyond U.S. borders. Not restricted by the terms of normal licenses, MAGNIFI can reach listeners in London, Paris, Tokyo and wherever it has concerts in its database. The compulsory license restricts non-interactive webcaster like Pandora to U.S.-based listeners. A streaming service would have to endure costly negotiations to stream outside the country. 

The question is whether people will listen to a streaming service that prioritizes event discovery. Pandora's approach has given it nearly 80 million active listeners each month. Spotify has 75 million active listeners and, according to comScore, over 40 million listeners each month in the U.S. Not to mention the tens of millions of listeners captured each months by Apple Music and its Beats 1 radio station, iHeartRadio, SoundCloud and Slacker.

But for the more active concertgoers, MAGNIFI might offer a viable solution to a problem. The standard industry line — originated and propagated by Ticketmaster — is 40 percent of tickets go unsold. The reason? People didn't know about the event. As long as it can attract artists and labels, MAGNIFI makes ignorance a less plausible reason for missing a concert.