On the occasion of Midem in Cannes, Irma unveiled on June 3 the first ever survey of startups operating in the music sector. Activities, financing, employment, profile of the founders, a quantified panorama of these innovative companies that are redrawing the contours of the musical ecosystem. Based on a panel of 250 startups, this first survey of its kind provides a socio-economic overview of innovative music services and how they operate. This publication is accompanied by a directory of the 250 French music startups.
À Through this survey, the aim of Irma (Information and Resource Centre for Contemporary Music) is to produce a set of socio-economic data to better describe the operation of innovative music services in France.
The results thus make it possible to refine the knowledge of the players involved in the changes in the sector, while enhancing the value of this ecosystem to professionals, organisations and institutions.
Startups position themselves as music service providers, attesting to a significant market depth: 86% work in BtoB, for customers who themselves work in BtoB at 67%.
- Music startups are spread across all business sectors, covering all fields of the music ecosystem: content (24.3%), communication/marketing (18.3%) and creation (15.9%) are the three main sectors invested.
- Multiactivity is an important characteristic of music startups: it concerns 44% of the companies surveyed, mainly because of the cross-functional and declining nature of the products and services they offer.
- Startups are making the new music interfaces a reality: web applications (74%) and mobile applications (44%) are the most developed tools, far ahead of hardware (17%) and APIs (5%).
- Internationality is part of the DNA of French music startups. Most of them aim to conquer foreign markets, tending towards the scalability of their tools and services. Signal recognition/data management companies are working at 17% on the French market, 50% on the European market, and 67% on the global market. Conversely, the closer the proposed tool or service gets to the user, the more local the market becomes. Thus, marketing/CRM companies work at 100% on the French market, 33% on the European market and 17% on the world market.
- The majority of start-ups in the music ecosystem start with low capital, even if some sectors require heavy investments: 56% start their activity with less than 20K€, including 33% at less than 10K€. These are mainly personal funds (58%) and love money (21%).
- Fundraising is a privileged tool for financing start-ups and takes place very early in the life of the company: 35% have raised funds since their creation. On average, the first round of financing is raised 14 months after the company's creation. Companies in the music sector invest little in start-ups: 76% of the funds raised are mainly from business angels, of which only 14% work in the music sector.
- While 41% of the startups have had recourse to loans, mainly from banks (68%), the BPI and, to a lesser extent the Ifcic, are only rarely solicited: the majority of the startups (63%) have never sent them any requests.
- On average, a startup generates turnover after 6.5 months. Startups are companies "like any other", with an average positioning time of 2 years.
- Music startups make great use of the support measures provided by dedicated organisations: 60% of them have benefited from them, mainly via incubators, accelerators or nurseries.
- Music startups create jobs: they have an average of 4.4 employees. In 2016, the 87 responding startups will employ 386 people.
Profile of the founders
- The creation of a startup in the music industry is mainly a collective adventure: only 36% has only one founder (and 40% has two). The loneliness of the entrepreneur, startupers don't want it!
- Most music startups are male, graduates (72% have at least 1 Bac+5). Women represent only 8% of the founders of music startups. Music is a matter of marketers (42%) and technicians (31%). The ideal "winning trio": 1 tech, 1 marketer, 1 manager.
- Music is a sector of first-time entrepreneurship, with few serial entrepreneurs: only 16% have created a startup in the past. On the other hand, startupers are largely drawn from the music ecosystem: 46% worked in music before starting out.