Splice: why the music creation platform is so popular
“The music industry of 2017 wouldn’t have found KARRA in a million years,” says Matt Pincus, Splice board member and founder and former CEO of SONGS Music Publishing, which he sold to Kobalt Capital in 2017 for $ 160. million. “They weren’t looking in the right places for artists with superstar potential,” he continues. “Meanwhile, she was sitting right there. Pincus first heard about Splice on SONGS while discussing the split from rapper XXXTentacion’s Billboard Hot 100 hit post “whoa (mind in awe)”. When asked about the song’s unusual keyboard hook, a SONGS staff member told him it was from Splice. “I said, ‘What is Splice? »», Pincus remembers. Then he found out that almost every young writers and producer he knew used the platform “and loved it”.
Pincus has a significant stake in Splice’s success, having invested “tens of millions of dollars” in the platform. “In music creation, the next generation of music companies will focus on the ingredients of collaborations, not the finished songs,” he says. At the time of its first investment, during Splice’s Series C funding round in 2019, the platform had 250,000 subscribers. By its next major investment cycle two years later, that number had more than doubled, and Pincus says the company is approaching $ 100 million in annual recurring revenue.
Splice’s growth reflects, and enables, a massive change in the way songs are written and recorded. The kind of professional music production that once took place in $ 2,500-a-day recording studios filled with electronics, instruments and session musicians now takes place in front of a laptop running Pro Tools, Ableton Live, or a other digital audio workstation software. For better or worse, Splice can also help eliminate the need for musicians, who can be moody and unreliable, as well as expensive. With a DAW and a few sample packs, anyone can be as self-sufficient as Prince.
The market for rhythms and sounds is part of a larger “creator economy” which is now recognized as the hot new investment in the music industry. Beatport bought the Loopmasters sample store, investment firm Francisco Partners acquired Native Instruments earlier this year, and Goldman Sachs invested in Splice in February. Splice has a lot of competition including Loopmasters, BeatStars (where Lil Nas X bought his beat “Old Town Road” for $ 30) and Airbit. But the financial potential of the sector is so great that MIDiA Research chief executive Mark Mulligan wrote in April that “the music industry now has additional gravitational force at its heart” – in addition to labels.
So far, says Mulligan, “Splice has succeeded in establishing an identity that shapes the market – it’s synonymous with the creative tool space, in the same way that Hoover is synonymous with vacuum cleaners.” Splice is also shifting its part of the industry from a retail model, where creators would pay for particular sounds, to a subscription model, which can attract more users. “This is the most important underlying business change that the space is going through – the shift from sales to subscriptions,” he says. “Sounds familiar? It’s the exact same thing Spotify did to iTunes.
The sample packs business is lucrative enough that Splice has been able to attract name creators including Boi-1da, SOPHIE, Just Blaze, Scott Storch, and Travis Barker. But the most popular packs are from lesser-known musicians like Madden, or Vaughn Oliver, a Canadian DJ whose Power Tools kits, released as Oliver, were used in Doja Cat’s “Say So” and “Don ‘t Start Now’ by Dua Lipa. Ian Kirkpatrick, who produced and co-wrote ‘Don’t Start Now, suggests that the recent disco resurgence in pop music can be attributed to Oliver.’ I wonder how much the direction of pop music is being dictated. by sample sites like Splice, ”he says.