And then there were none… Pandora acquires Next Big Sound

Pandora Media has announced the acquisition of startup Next Big Sound in a deal that sees another (and perhaps the only large remaining) music analytics company disappear. 

This follows Apple’s acquisition of Next Big Sound’s competitor MusicMetric late last year (though it only transpired in January 2015). 

Next Big Sound is undoubtedly a music start-up success story as it grew from a small team in Colorado to a well-funded and thriving New York-based startup. The company’s CEO managed to convince an often stubborn industry that analytics were worth looking at and in the meantime bagged deals with all major labels. 

Even as the company scaled and launched into new verticals (with Next Big Book) the decision to sell to Pandora Media signals either that revenues were not those the company (and investors) were looking for or that the offer made by the internet radio giant was too good to turn down. 

The company raised around $8m so far according to CrunchBase and if reports around the MusicMetric acquisition are to be believed  - with a sale to Apple for $50m - Next Big Sound is unlikely to have sold to Pandora for less although figures have not been released.

In regards to the analytics vault held by Next Big Sound, since most labels that have deals with the company are covered by NDA’s Pandora is unlikely to be able to peek at the stats gathered from the likes of Spotify and other streaming services. 

At the same time, the acquisition begs the question of where labels are going to get their data from from now on.

Pandora will likely integrate Next Big Sound’s stats into its own Pandora AMP analytics tool - Next Big Sound had focused on how to help artists and labels interpret the data that was coming in and so that is likely to be something that can make a difference in the day-to-day analysis of the billions of tracks Pandora serves every day. The acquisition though could also be helpful from a business perspective as Pandora may be able to use Next Big Sound's engine to better segment and target its audience when it comes to advertising.

Even though its data is unlikely to be shared, this is a bit of a blow to Spotify as the company had made a deal with Next Big Sound to provide artists on the platform with free analytics.

Could this prompt Spotify and other streaming services to follow Pandora’s path and create their own analytics tool in order to preserve their own data? This could make for a messy ecosystem for artists going forward. However, if they look for a startup to solve that problem, that startup is always going to be looking for an exit and as MusicMetric and Next Big Sound’s stories prove is likely to find it as soon as it gets some traction. 

 

(Andrea Leonelli)