Audoo, a tech start-up developing a smart meter which monitors music being played in commercial premises, is raising £1.2m to fund expansion.
Currently, a performance royalty organisation (PRO) such as the UK’s PRS for Music can only guesstimate how much money is owed songwriters and artists when music is played in businesses.
Collection agencies around the world make educated guesses as to what music is being played based on Top 40 charts, radio airplay and focus groups.
The Audoo plug-in device, which would be distributed free to businesses, would accurately capture what music is being played and livestream that data back to the collection agency.
Ryan Edwards, CEO of Audoo, said: “It’s crazy that a business can be distributing nearly a billion pounds a year and not have an auditable and accurate trail.
“Once a PRO has sold a commercial licence, they have very little data as to what’s actually being played out there. It’s all about fairness for artists and composers but also dragging 100-year-old societies into the digital age. This will really benefit smaller, independent artists because you can get granular with the data.”
Global market size
Royalty payments are expected to be worth $6.9bn globally by 2025. Last year alone, PRS for Music collected over £900m.
But 75pc of UK businesses that should have a commercial-use PRO licence don’t pay for one.
Artists and record companies lose $2.7bn in revenue annually because SME owners (such as cafes, gyms and hairdressers) typically stream music from personal accounts instead of buying a commercial-use license.
Audoo plans to licence its technology to PROs all over the world, focusing on the US and Asia. (The US has four separate PROs that vie with each other to offer best royalty rates to a Taylor Swift or a Beyoncé.)
Edwards, whose band The Lines toured with Glastonbury headliners The Killers, REM, The Charlatans and Ocean Colour Scene, had the idea for Audoo two years ago after walking through Selfridges department store with his wife and hearing his own top 10 single being played.
“My wife said to me, ‘How much will you be payed?’ and I laughed and said, ‘About a penny – certainly less than that handbag you’re looking at right now’ but that got me thinking…”
Edwards went out and raised a “very small” funding round from friends and family last summer to build a prototype device.
After getting validation from PROs in the US, Canada and the UK, Edwards has gone out to high-net-worths and family offices for this Series A funding round.
Of course, as a business model, Audoo only has one end user – at least in the UK – which is PRS for Music.
However, last month, PRS for Music chairman Nigel Elderton joined the Audoo board. Elderton is also European president for Peermusic, the largest independent music publishing company in the world.
Elderton said: “One of the greatest challenges that the music industry currently faces is the identification and global tracking of performances of our repertoire. I believe that Audoo’s ground-breaking technology will play an important role in providing the necessary data in a reliable and cost-effective way which can be easily utilised by PRO’s around the world.”