This Swiss Startup Is Bringing AI to the Music Label Business

(Bloomberg) -- A Swiss-Swedish startup wants to bring the power of big data and social-media analysis to the music business, offering artists instant insight into where and how their songs are playing so they can market more effectively to fans.

Utopia Music Group is being billed as a new kind of record company by its founder, Mattias Hjelmstedt. Like an old-school label, Utopia Music will also produce and book live performances and handle artist logistics, such as flights, cabs and hotel rooms.

But the company claims to offer more -- artificial-intelligence software that sifts through data gathered from sites such as Facebook, Twitter and Instagram. Augmented with the information coming from YouTube, radio playlists and music-streaming services, it spits out insights that pinpoint, for example, where musicians’s fastest-growing audiences are. The intel can be used to boost income with better decisions about marketing campaigns, live concerts and promotions.

“Today the music world is so digital that you can essentially see the result of marketing seconds later,” Hjelmstedt said in a phone interview ahead of this week’s Winter Music Conference in Miami.

In a departure from traditional label deals, Utopia Music will sign artists to open-ended contracts, allowing them to walk away at any point, Hjelmstedt said. The programmer and serial entrepreneur, who founded cloud-based TV service Magine AB and co-founded video-on-demand company Voddler, is convinced that artists will stick around once they see the benefits of an AI-infused marketing strategy that captures global data on listening habits and emerging trends compared with the standard “spray and pray” approach, he said.

“We’re a blend of a record label, a publisher and a management company that works with artists to shrink the value chain and use technology to transparently extend their reach,” Hjelmstedt said. “Record companies today don’t use much of the modern marketing technologies, they sort of throw spaghetti at the wall and see what sticks.” 

The company, which is currently funded by the Swede and a small group of investors, plans to raise a “larger” sum at the end of the third quarter to invest in management companies and artists to tap into existing revenue streams, Hjelmstedt said.

Personal Contacts

These days, artists earn more touring than on distribution and the industry is very old-fashioned, with concert bookings still based on personal contacts, according to Hjelmstedt. Utopia Music can see that an artist should tour tomorrow in Queens, New York, for instance, because their fan base is surging there.

“That can change the entire industry for touring so the artist is always where they’re hottest, boosting income significantly,” he said.

Utopia Music is based in Zug, Switzerland to take advantage of the best international corporate laws to enhance artist revenue, Hjelmstedt said. Utopia has its main operational office in Barcelona, where local laws are forgiving to startups, and it has satellites in Los Angeles and New York.

To contact the reporter on this story: Kim Robert McLaughlin in Stockholm at kmclaughlin6@bloomberg.net.

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net.