All silliness aside, this deal is less important than you think in some ways, and more important than you think in others.
No, it’s not going to replace artists at all.
No, the algorithm itself isn’t actually “signed” to anything.
Yes, this deal has immediate repercussions for how we understand ownership in the context of creative AI.
Yes, this will likely trigger bidding wars for algorithms and engineering talent among major labels over the next few years.
I thought it would be helpful to dedicate a special edition of this newsletter to answering key FAQs and debunking myths about the true mechanics of this deal—which is just a temporary distribution deal between Warner Music and an adaptive-music startup called Endel
—and the kind of precedent it may be setting for the rest of the music industry.
I got to speak with Endel’s CEO Oleg Stavitsky and with a few investors in the company; a rep for Warner Music declined to comment, pointing me instead to a press release
about the deal that was issued in January 2019 (i.e. the flurry of headlines you saw from the past few days are actually outdated by around a month!).
What is Endel?
Endel is a Berlin-based startup developing generative soundscapes that can adapt based on several inputs from the end user—including heart rate, walking cadence, time of day, weather and temperature—for select functional activities such as focusing, relaxing, working and driving. The core product is a mobile app for iOS
devices, and the company also launched its official Alexa skill
A key component of Endel’s growth strategy is integration with “smart” and connected devices, including but not limited to Nest thermostats, Sonos speakers and Philips Hue smart lightbulbs. The team is also working on a “car mode” that incorporates traffic conditions into its algorithm, as well as calendar sync support that will adapt soundscapes to a user’s schedule and help said user “prepare for, or unwind after, a long day,” according to the app.
As of now, Endel’s primary source of revenue is in-app payments; its iOS app is free to use for a seven-day trial, then charges $5.99 a month, $49.99 a year or an $89.99 single payment for lifetime access.
How did the deal with Warner Music come about?
Endel was a member of the 2018 Techstars Music
accelerator program, which brought select team members out to Los Angeles to grow Endel’s business and iterate on their product in a focused environment, including taking rapid-fire meetings with a wide network of industry mentors.
Every year, Techstars Music hosts a closed-door “Investor Day” after the official Demo Day to give investors and label execs the opportunity to demo cohort members’ finished products, and to get the ball rolling on potential investment and partnership deals.
During the 2018 investor day last May, Endel’s team was approached by Jeff Bronikowski—SVP, Global Business Development and Head of New Technology & Innovation at Warner Music Group—who unexpectedly brought up the opportunity for Endel to enter a distribution deal with the label.
“I thought it was going to be a standard investment talk,” Endel’s CEO Oleg Stavitsky told me over the phone. “I was prepared to pitch [Jeff] on how Endel was going to be a million-dollar company. But then Jeff said, ‘I want to publish your content on Spotify.’ And I was like, ‘Excuse me?’”
Prior to releasing its first batch of albums with Warner, Endel was able to secure formal venture backing from firms including Plus Eight Equity Partners
, Amazon’s Alexa Fund
and Japan’s Avex Group
. While Warner Music also invested indirectly in Endel through Techstars Music’s seed fund, there are some specific strategic reasons why the major label would want to extend a content
deal to Endel, as opposed to a standard equity investment, as I’ll discuss later in this piece.
What is the structure of the deal?
After eight months of talks, Endel and Warner Music ultimately struck a standard 50/50 distribution deal, covering a total of 20 albums that will be released throughout 2019.
All of Endel’s albums will be handled by Warner Music’s Arts Division, which was founded in 2017
to cover “underserved genres … generally outside the pop mainstream,” including classical, musical theater, jazz, children’s music and film soundtracks. On Apple Music and Amazon Music, the albums are labeled as “New Age.”
As part of the distribution agreement, Warner Music will be providing formal marketing support for Endel’s albums—diving headfirst into the open question of how one effectively markets algorithmically- and procedurally-generated music to a wider audience. “The label has hired an agency to help out with a content marketing campaign, and we’re already having calls with them on a biweekly basis,” says Stavitsky.
Warner Music also doesn’t gain any ownership of Endel’s algorithms or software as part of the deal. “We had to hire a copyright lawyer to help us make sure we weren’t giving Warner the rights to the algorithm itself—only to the result of what our software created for them,” says Stavitsky.
Is this kind of deal actually new?
Yes, for the most part!
Importantly, Endel is not
the first AI-generated music company to leverage major-label-owned distribution services. Aiva Music—a compositional algorithm developed out of Luxembourg that famously became the first AI to register with a collecting society (SACEM)—recently partnered with Sony-owned Believe Distribution to release its latest album, 艾娲 (ài wā)
Sony is also accustomed to experimenting with and monetizing musical AI: the company oversees the Flow Machines
project, whose algorithmic composition tools Benoît Carré used to write an entire album under the moniker SKYGGE (the album is aptly named Hello World
Flow Machines is formally credited as a songwriter, producer, instrumentalist and/or vocalist in all of the tracks’ liner notes
for Hello World
—alongside dozens of human beings who provided additional songwriting, instrumentation, mixing and mastering support, and who are framed as genuine collaborators to, and authoritative interpreters of, the AI’s output.
The Endel/Warner Music relationship is fundamentally different because 1) Warner does not own any of the machine-learning tools used to create Endel’s albums, and 2) Endel is not enlisting any formal musical "collaborators” to help write its tracks, beyond the few engineers and sound designers on its own team.
Are all 20 albums included in the deal already finished?
Yes—and they will include 600 tracks in total!
“We generated a series of recordings based on different combinations of inputs for our app and delivered them to Warner, but they were all hour-long tracks,” says Stavitsky. “Warner asked us to cut down each of them into 2.5-minute segments, and suddenly we had 600 tracks on our hands.”
To many people, this is the most mind-blowing and alarming aspect of a major label signing an algorithm or piece of software to a deal instead of a “human” artist: creative hyper-efficiency.
As compositional algorithms begin to play a more prominent role in the creative process, production costs for recordings could potentially plummet. No more need to spend dozens of emails rallying dozens of producers and songwriters around the creation of a given album; no more need for “synch camps
” or “rap camps
” (both of which, incidentally, were established in part to cut costs).
The average team required to train a compositional algorithm with the right musical material, and then supervise and lightly edit the algorithm’s output, is probably around a quarter of the size of a typical camp—and the path to 600 tracks could easily last just a few days, instead of years. In contrast, even artists like Future who embrace rapid-fire release strategies would take many more years before they reach the 20-mixtape milestone.
How were the albums composed?
The clickbait answer is “with the touch of a button”; the actual answer is slightly more complicated and time-intensive.
Understanding what you hear in Endel’s albums requires clarifying the exact nature of the company’s core product and sonic output.
Firstly, Endel is not interested in finite compositions so much as they are interested in infinite, generative soundscapes. The goal of the startup’s app is to create a sonic, hours-long backdrop optimized for a specific activity (relaxing, focusing, working, etc.), rather than simply replicating the structure and narrative of a three- or four-minute song that you already hear on the radio and on streaming playlists.
Secondly, the soundscapes you hear in Endel’s app aren’t just composed out of thin air. Rather, they are algorithmic combinations of source material that Endel’s co-founder and in-house sound designer Dmitry Evgrafov
has been creating, preparing and editing for months.
Evgrafov himself is a renowned composer who has performed live with the likes of Nils Frahm and is currently signed to 130701
, the post-classical imprint of Fatcat Records
. For Endel’s mobile apps, he handcrafted hundreds of instrumental stems himself and labeled them according to the app’s potential input parameters (e.g. which stems would work best for a certain type of day, or for a certain heart rate). Endel’s algorithm then reads the metadata behind those stems and splices and overlays them into a seamless and dynamic listening experience, depending on the kind of experience that the end user wants.
“While we technically did create these tracks [on our albums] with a click of a button, we preceded that with 1.5 years of work developing our algorithm and creating and tagging the stems,” claims Stavitsky.
In other words, most of the hard work on Endel’s part comes not from the composition process itself, but rather from the data “cleaning” and preparation behind the scenes. This is consistent with recent studies
suggesting that data scientists spend 80% of their time collecting, organizing and cleaning data, and less than 15% of their time actually mining the data and improving their algorithms.
Hence, each track that you hear on Endel’s albums released through Warner is simply a 2.5-minute excerpt of the more continuous experience from the company’s mobile app. Stavitsky tells me there was very minimal post-production work on the albums, aside from Evgrafov mastering each track to comply with the technical requirements for streaming services like Spotify and Apple Music.
Who are the credited artists and songwriters on the albums?
The founders and engineers behind Endel, including but not limited to Stavitsky and Evgrafov.
“Warner needed songwriter info when they were registering the copyright for the album’s tracks, and we just decided to list all the co-founders and engineers of our software,” says Stavitsky, who added with a chuckle that “I am now credited as a songwriter even though I have no idea how to write a song.”
Is Endel’s compositional approach actually new?
The more generative, hands-off compositional technique Endel is showcasing in its albums has been around for decades, and has been lauded mostly as innovative rather than threatening to creative communities.
Stavitsky cites several iconic works of classical and ambient music from the mid- to late-20th century as key influences on Endel’s approach to generating its own soundscapes. Terry Riley’s In C
(composed in 1964), Philip Glass’ Music in Similar Motion
(1973), Steve Reich’s Music for 18 Musicians
(1976) and Brian Eno’s Music for Airports
(1978) all present not just a traditional musical score, but also an open-ended sets of instructions—what musician and software developer Tero Parviainen once described
as an “open architecture [that] allows a unique piece of music to be generated for every single performance.”
“If you think about it, all of these pieces revolve around the composer creating not a standalone piece, but a dynamic system that can live on by itself,” says Stavitsky. “We are very much influenced by that school of composing. In fact, we don’t even talk about Endel as music; we talk about it as a procedurally generated sound environment, based on inputs we receive from you.”
If you Google search “generative soundscape”
today, you will find so many other examples from the past decade alone—in experimental electronic albums, in sound installations at museums, in meditation apps—that precede Endel’s founding as a company.
What potentially makes Endel stand out from its precedents is the quality of its algorithm and the form it takes on the front end: a personalized, dynamic, functional mobile app, rather than a static piece of content that sounds the same to all listeners, serves a purely aesthetic purpose and is not portable.
How did Endel come up with those strange album and track names?
According to Stavitsky, the names are inspired by different combinations of inputs for Endel’s algorithm.
“When you launch the Endel app, the status line that appears can include phrases like ‘Cloudy Morning Relax,’ or 'Sunny Afternoon Focus,’” says Stavitsky. “This is just a combination of various inputs as determined by the user.”
The company hired an outside copywriter to take the generic format of these inputs—e.g. three words total, direct references to weather and activities—and make them more evocative rather than purely functional or robotic. Hence the slightly cryptic yet strangely poetic track titles you see, like “Eight Moon Revealed,” “Four Rainfall Traces” and “Nineteen Cloud’s Caress.”
Will recorded-music albums become Endel’s core product?
No! At least Endel doesn’t want you to think that.
Stavitsky claims that Endel’s core mission is to promote adaptive music for the consumer, instead of releasing music as a standalone “artist.”
“In a way, the concept of publishing content on Spotify and Apple Music kind of contradicts the whole point of what we’re trying to do as a company, which is to be able to react in real time to changes in inputs,” says Stavitsky.
Venturing into recorded music also arguably limits the kind of work Endel can do with Warner and other major labels from a licensing perspective, due to the lack of robust legal foundations in the world of creative AI.
When I interviewed
Stavitsky for a Billboard
recap of the Techstars Music 2018 cohort, he expressed both interest and hesitation with regards to licensing major-label catalog for Endel’s apps. Hypothetically, he said, one could plug stems from an artist’s body of work—say, Brian Eno or Lana Del Rey—into Endel’s algorithm to “create a 'focusing’ or 'relaxing’ version of Endel, building on those artists’ sounds. There would be no vocals, only certain frequencies or tones based on the scientific research we’re incorporating, but it will still be recognizable as the original artist.”
The only problem: such a partnership would put Endel in a situation where they no longer have full ownership over the sounds being played on their app. “We currently own 100 percent of this product and technology that we’re building, and we’re not sure whether we want to relinquish some of that ownership, at least for now,” he told me at the time.
Eight months later, Endel still owns 100% of its content and has still held back from doing any direct content/stem integrations with labels—although Stavitsky says he’s still having conversations with artists and will strike a partnership “when the time is right.”
In the meantime, as Stavitsky argued earlier, Endel is a team of engineers first, and will be focusing most of their 2019 on closing more B2B deals for integrating their technology.
“The whole Warner deal is a spinoff, almost an experiment,” says Stavitsky. “We’re not a content generator for big labels, and are not expecting to make millions of dollars from Spotify.”
Why would Warner Music be interested in working with Endel? What is the market opportunity from a label perspective?
The obvious clickbait answer, as previously discussed, is cutting production costs.
But to be clear, Endel is not a reckless “pop music” generator, and its deal with Warner Music is not a standard “pop” deal that cannibalize the commercial performance of existing rosters on Atlantic, Elektra and other well-known subsidiaries.
In fact, it’s quite telling that such an allegedly hot startup like Endel is making albums for the same department within Warner Music that is dedicated to genres traditionally marginalized by the mainstream industry (classical, jazz, musical theater, etc).
Classical is still very much a physical-first genre, even for the labels that tout the best streaming numbers. In a recent interview with Billboard
, Decca president Rebecca Allen revealed that the label’s business is around 60% physical, 30% streaming and 10% downloads—and that’s inclusive of some of the most-streamed classical artists of all time, such as Ludovico Einaudi
Yet the genre seems to be enduring and even expanding in a streaming world, in no small part due to the rise of mood- and activity-based playlists
that are introducing classical composers to a new, younger audience.
Other major labels are noticing the trend, and are trying to cash in through direct curation partnerships with streaming services. In August 2018, Universal Music launched a Peaceful Music
curator profile exclusively on Apple Music, the flagship playlist
of which had 51 tracks by the likes of Max Richter, Ólafur Arnalds, Jóhann Jóhannsson and Ludovico Einaudi at the time. The playlist has more than doubled ever since to 113 tracks
, and the curator profile now includes other playlists named “Peaceful Sleep” and “Peaceful Beats.”
Thanks to its deal with Endel, Warner Music could hypothetically create (and start earning royalties from) more than five times the amount of tracks on Universal’s Peaceful Music playlists in a fraction of the time, serving the same purpose of relaxation and mood enhancement. This would turn Spotify’s “fake artist” rumors
on its head, and give the label the steering wheel.
Another key opportunity Warner Music sees in partnering with Endel specifically, versus with other AI-music apps, is the growing appeal of health & wellness apps as effective marketing tools
Artists themselves are already partnering with health-oriented startups to promote their work. Just ten days ago, Moby released his new minimalist album Long Ambients 2 exclusively via Calm
, a meditation and sleep app that is currently valued at $1 billion
. (The first installment, Long Ambients 1
, actually sounds a lot like something you would hear on Endel.)
The B2B potential is equally ripe, particularly in an on-the-go world dominated by streaming—e.g. see Spotify’s bundle with Headspace
—and Warner is already one of the most active major-label investors in the health & fitness sector, with stakes in Peloton, Weav and Aaptiv. Hence partnering with Endel is a natural fit for expanding into more context-aware audio offerings and experimenting with more granular customization for users.
“Companies like Calm and Headspace have validated the market opportunity, but the extent to which those solutions are truly personalized is limited,” Rishi Patel, managing partner and co-founder of Endel investor Plus Eight Equity
, tells me over email. “Endel is taking it one step further by capturing various metrics and data points of user behavior—heart rate, time of day, weather, meeting schedules on calendar—and adapting music to it. This is only the first step; eventually it’s about environments. In your car, in your home, in the workplace.”
What will be the biggest challenge for Endel in making the most out of this deal?
Converting listeners on streaming services to Endel’s core products, namely their personalized mobile apps and Alexa skill.
As of today, Endel’s Spotify profile is far from optimized for conversion to paid in-app subscriptions: the “bio” section is blank, and there are no other opportunities on the artist page to click through and learn more about Endel as a company.
Moreover, as previously discussed, the static nature of Endel’s albums on streaming platforms is an inaccurate representation of the more adaptive product the company offers elsewhere.
“The way the [Endel] albums are presented on streaming services, you still have to manually select which of the tracks on which of the albums will best suit your current situation,” says Stavitsky. “Whereas with Endel’s algorithm, you just tell the app that you want to 'focus right now,’ and the sound will adapt immediately to your environment.”
In this sense, Endel’s biggest bottlenecks to making the most out of its Warner deal might actually be the streaming services themselves.
So… Why hasn’t a streaming service partnered with Endel yet? Couldn’t streaming services potentially become Endel’s competitors?
“Fake artist” controversy aside, streaming services are indeed investing both in adaptive, context-aware music curation and in creative-AI tools for artists.
The most publicly prominent player in this space is Spotify, which poached Flow Machines creator François Pachet in 2017 to lead a new Creator Technology Research Lab in Paris. Spotify is also testing adding personalized song picks
to playlists like Beast Mode, Chill Hits and Dance Party—indicating at least minor interest in making mood- and activity-based offerings more tailored to each user’s distinct preferences (a feature that competitor Amazon Music already has with its voice capabilities
In fact, Stavitsky tells me that Endel is still actively courting Spotify and other streaming services as potential B2B technology partners.
“We’ve explicitly pitched to Spotify saying, look, we can become an entirely new category of music on your platform,” he says. “We’re not going to compete with Drake. We’re definitely open to Spotify having an ‘Endel mode,’ and are hoping they’ll come to us with an integration request.”
Endel’s investors don’t think mass-market streaming services will be meaningful competitors to Endel over the next few years, as the former group faces other, more urgent challenges—including but not limited to Wall Street.
“There is such a huge open white-space market opportunity so I’m not overly concerned about the competition—especially from the DSPs, which have a tremendous number of competing priorities not to mention competition amongst each other,” says Patel. “Doing adaptive music ‘right’ takes focus, resources and a lot of understanding of how technology can alter music in real time based on various parameters. With Spotify focused on podcasts right now and both them and Apple doing their best to differentiate their catalog, I think adaptive music is still an attractive opportunity for young enterprising startups like Endel.”
What, if at all, is the upside for artists in a world where algorithms can enter distribution deals with major labels and engineers can be credited as co-writers?
The media’s knee-jerk reaction to the deal over the past few days was to pit Endel as a competitor to “human” major-label artists—to the point where algorithms in and of themselves might be more desirable signings than the next emerging rapper or pop singer.
At large, many conversations about artificial intelligence and machine learning in society today seem rooted in themes of technophobia, job displacement
and overall catastrophe
, and the music industry is no exception.
Personally, I always try to encourage more nuanced narratives about the future of AI-generated and AI-facilitated music beyond “the machines are going to steal all our jobs.” In a way, resorting straight to that level of cynicism on this topic is actually a blowing insult to the music industry, and to the complex emotional and intellectual labor to which artists have dedicated their lives. As artist Holly Herndon wrote on Twitter: