Data-driven artist and repertoire (A&R) platform, Instrumental, today announced it has established a strategic partnership with Tencent Holdings (“Tencent”) and Tencent Music Entertainment Group (“TME”).
The transaction will result in Tencent and TME holding a minority stake in the business, alongside UK leading venture builder, Blenheim Chalcot and Warner Music UK Limited, both existing investors in Instrumental.
Alongside the financial investment, the deal sees Instrumental enter into an exclusive relationship with TME in China, one of the world’s fastest growing music markets, benefitting the roster of independent artists licensing tracks into its frtyfve branded label services and publishing arm in reaching vast new audiences.
“Artists direct” or “DIY artists” is the fastest growing sector of the global recorded music industry, worth $873m in 2019 and expected to top $1bn in 2020, according to industry analysts Midia Research. Instrumental’s platform is the industry leader in the discovery of the new generation of talent emerging in that sector and is used by all three major labels, Live Nation and a range of brands and media companies to scout for exciting new prospects for their businesses.
With a wealth of low cost or free distribution options and the power of social media to connect with a global audience, the independent “route to market” for new artists is now the default. Spotify reported last year that more than 3m artists are now online with over 40,000 tracks uploaded every day. That has accelerated further during the global pandemic as recording studios and live events halted, leaving aspiring talent to get on with it from home.
In this fast moving and fiercely competitive space, leveraging technology and data science to generate insights is now essential to stay ahead and rapidly cut through all the noise to identify the fastest growing talent emerging globally.
Instrumental CEO, Conrad Withey, said, “We are incredibly excited about our new strategic investors, Tencent and TME, and the opportunity we now have to achieve great things together. Like us, Tencent have identified the power and potential of data science in the discovery and development of high potential new artists. I am looking forward greatly to collaborating with Tencent and TME, including the opportunity to expand our business into China. This deal will allow Instrumental to accelerate our commitment to becoming an “artist first” business, delivering insights and partnerships directly to the great talent discovered by our app. That includes expanding our label and publishing services but also launching new products that meet the needs of high growth artists at the earliest stages of building a career in the music business including merchandise, digital live events and brand partnerships.”
Tencent Holdings, Chief European Representative, Ling Ge, commented,
“Instrumental’s unique blend of data science, AI and innovative business models for a new, streaming first music industry fits perfectly with Tencent’s global investment strategy. We look forward to working with Conrad and the team to build the business both in China and internationally and establish it further as a leader in its field.”
Tencent Music Entertainment Group, Group Vice President, Dennis Hau, added,
“As the leading online music entertainment platform in China, TME has always been committed to capitalizing on cutting-edge and emerging technologies to transform its services, amplify social functionalities to encourage user engagement. With years of advanced research and application of AI technologies, we have improved the efficiency in selecting, discovering and distributing quality content and promoting the growth of artists, which allowed our hundreds of millions of users to enjoy more diversified content with high quality. The cooperation with Instrumental will certainly bring greater impetus to the innovation of TME in AI technology application, as a win-win combination of better service for our users, good promotion for the growing artists, and the sound development of the entire online music industry.”
Blenheim Chalcot co-founder and Instrumental chair, Charles Mindenhall, said: “Conrad, Abi and the team have done a super job building Instrumental into a very unique player in the fast evolving music industry. Tencent’s and TME’s investment recognises the opportunity we have to change how emerging artists are discovered and progress their careers. Alongside our new investors and Warner Music, we look forward to continuing to support them on this journey.”
About Tencent Holdings:
Tencent uses technology to enrich the lives of Internet users. Our communication and social platforms, Weixin and QQ, connect users with each other and with digital content and services, both online and offline, making their lives more convenient. Our targeted advertising platform helps advertisers reach out to hundreds of millions of consumers in China. Our FinTech and business services support our partners’ business growth and assist their digital upgrade.
Tencent invests heavily in talent and technological innovation, actively promoting the development of the Internet industry. Tencent was founded in Shenzhen, China, in 1998. Shares of Tencent (00700.HK) are listed on the Main Board of the Stock Exchange of Hong Kong.
For more information, visit www.tencent.com/en-us
About Tencent Music Entertainment Group：
Tencent Music Entertainment Group (NYSE: TME) is the leading online music entertainment platform in China, operating the country’s highly popular and innovative music apps: QQ Music, Kugou Music, Kuwo Music and WeSing. TME’s mission is to use technology to elevate the role of music in people’s lives by enabling them to create, enjoy, share and interact with music. TME’s platform comprises online music, online karaoke and music-centric live streaming services, enabling music fans to discover, listen, sing, watch, perform and socialize around music.
For more information, please visit http://ir.tencentmusic.com.
Founded in 2016 by CEO Conrad Withey and CPO Abi Hanna, Instrumental’s applications use advanced data science and AI to discover and evaluate the potential of artists distributing their music independently from traditional labels. Their platform is used by a wide range of corporate partners in the music and media industries to identify the key emerging artists of interest from the millions uploading music everyday.
The company has also recently expanded its “direct to artist” services across recorded music and publishing behind the frtyfve brand, targeting early stage talent with high growth potential identified through the company’s data insights.
For more information, visit www.weareinstrumental.com.
About Blenheim Chalcot:
Founded in 1998, Blenheim Chalcot is the UK’s leading digital venture builder having successfully built over 40 companies and with current assets under management in excess of £1 billion. Our current portfolio consists of 19 companies, each having been conceived and launched by us, with total sales of over £400 million and more than 3,000 employees.
Our ventures are at the forefront of a multitude of industries being disrupted by technology or regulation and they range from Instrumental, Agilisys (one of the UK’s largest IT & Cloud services providers), AVADO Arch (digital and professional training company), ClearScore (leading free credit report provider), Fospha (customer acquisition marketing tools), Modulr (payments platform), Liberis (leading innovator in business lending), Salary Finance (US and UK financial wellbeing platform), through to the Rajasthan Royals cricket team (an IPL team in the world’s most valuable cricket tournament).
For more information, visit www.blenheimchalcot.com.