A Certain Musical Genius

German music technology is used by major international artists and respected around the world. Even so, many music tech start-ups with clever and cutting-edge products are suffering from a general lack of investment.

May 2020

When it comes to music technology, Germany has centuries of expertise to draw on – from instrument craftsmanship to the invention of the MP3. That tradition has carried on into the next generation of high-tech digital products. Yet many start-ups in the German music tech business are overlooked by investors.

“The German music industry is setting worldwide standards in digitalization,” says Thomas Wendt of Integrative Concepts, which provides PR strategy for Celemony, Kemper and several other German music tech companies. The same holds true for technology aimed at musicians, their managers and their audiences. New developments in this area are in step with market trends: 2018 was the first year that digital music formats made more money in Germany than physical ones. According to the German Music Industry Association (BMVI), 56.7 percent of turnover came from audio and video streams, compared with 43.3 percent from physical formats.

Dalton Tennant, aka D10, is the musical director for the Canadian rapper Drake’s current touring outfit. He integrates Native Instruments’ hardware and software into a live setting. Native Instruments is a worldwide leader for sample libraries. © Native Instruments

The ubiquity of German equipment and technical expertise in the industry flies largely below the radar in terms of investment, even though, according to Wendt, German audio software is now used on “virtually every Hollywood soundtrack.” The Oscar-winning film composer Hans Zimmer, for instance, is a long-time user of Cubase, developed by the Hamburg-based Steinberg, while German digital guitar amps are being used on tours by major acts as disparate as German hard rock band Rammstein and U.S. jazz musician Pat Metheny. Moreover, a Berlin company called Native Instruments is a worldwide leader for sample libraries that supply everything from obscure Asian instruments to a complete orchestra. “It would be interesting if big international companies were to use the expertise that exists here,” says Wendt.

Fine-tuned expertise

Christoph Kemper is head of the Kemper company, which makes guitar amps with individual digital profiling (a technology he has a worldwide patent on). His clients include bands like Depeche Mode and Coldplay. “German companies have very high standards – there is a real eye for detail, so I think customers feel like they’re being taken seriously,” he says. “I think that’s what has made a lot of providers into market leaders.” Kemper points out that his industry often struggles to find investors because of the comparatively high level of knowledge required. But that hasn’t stopped foreign companies from investing in or entering the German market. Japanese firm Korg, manufacturer of electronic synthesizers and audio processors, has recently expanded operations in Germany, Yamaha has acquired Steinberg, and U.S. microphone specialist Shure this year opened its second German office in Berlin.

Music Maestro

German Tech: ­Global Groove

Matthias Strobel, president of the industry association MusicTech Germany, provides some insights that should be music to investors’ ears.

What distinguishes the German music tech industry?

Historically, German inventors have been responsible for just about everything that fundamentally changed the music industry: from the gramophone to the microphone to the MP3. But the market was more condensed in those days. Today, there’s a huge range of different tools.

What technologies will shape the future of the industry?

We’re already at the point where virtually any kind of music is available anywhere. The next step is personalized music experiences – for example, there are firms that are using algorithms to recreate frequencies that people lose as they age, and firms that are making apps that remove the technical and financial barriers to musical creativity.

What are the most promising companies in your industry right now?

The ones who are working out how artists can get paid more fairly by setting up metadata banks or working with blockchain. They will play a big role because the market is getting so fragmented.

“The German tech market plays a key role in the industry,” says Abby Kaplan, Shure’s vice president of global retail sales. “It’s why we continue to build our presence in this important market. Being a member of the House of Music community in Berlin has many benefits for us. It strategically expands Shure’s European business, allows for collective inspiration, and places us directly in the heart of Berlin’s vibrant creative scene.”

Gérôme Vanherf of the Belgian seed investment fund LeanSquare (which has invested in Berlin start-up MOD Devices, amongst others), is also enthusiastic. “A lot of great start-ups are based [in Germany], especially in Berlin and Munich. That is why we are working closely with actors like the industry association MusicTech.”

So, what does the future hold? The personalization trend in the music tech industry reaches beyond professionals and is now focused on removing the barriers to creativity. There are a plethora of apps that allow people to make music without any classical training, or indeed instruments. Matthias Strobel, president of MusicTech Germany, points to a major development in software that uses algorithms to recreate frequencies that people otherwise stop hearing as they age and creates a fully personalized and optimized listening experience. It sounds like sci-fi, but it’s a reality in Germany.

1) Source: SOMM – Society of Music Merchants; 2)GfK Entertainment

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