• Jaxsta CEO Beth Appleton said VINYL acquisition represents a transformation period for company
  • Jaxsta is investing in AI to improve the music discovery experience through the VINYL platform
  • Focus on cost controls and prioritised investment into revenue generation providing path to profitability

Jaxsta (ASX:JXT) is the world’s largest dedicated database of official music credits, having signed up every major label so that all music data is delivered to the company.  Essentially, JXT verifies the work of music creators.

In February JXT announced plans to acquire the world-leading Australian-created Vampr, dubbed the LinkedIn for the music industry.

Vampr connects musicians, creatives, and artists worldwide so they can collaborate, create new music and monetise their work.

The acquisition provides JXT access to 1.3 million creators to drive subscriptions with the deal due to finalise on June 1, 2023.

Furthermore, last week JXT launched VINYL.com, a global music products marketplace, featuring a deep catalogue of over 50,000 vinyl records across all genres.

With verified creative contributions metadata on every album, VINYL.com aims to provide a premium music consumer experience while ensuring that all contributors are recognised – artists, songwriters, producers, composers, engineers, musicians, and any other collaborators.

Despite the technological transformation of the music industry, there has been a massive resurgence of the purely analogue music delivery format that you and I know as “vinyl”.

Vinyl is arguably still the best way to experience music, according to its most loyal audiophiles. Vinyl records represent the highest selling form of music outside of digital streaming.

Stockhead sat down with JXT CEO Beth Appleton to discuss the growth company, its path to profitability, the music industry and the impacts of AI.

Jaxsta CEO Beth Appleton. Photographer: Renee Novytarger

Are you excited by the launch of VINYL.com? What will it mean for the company?

“The launch of VINYL represents a transformational period for Jaxsta where we will begin to realise the true value of the underlying music credits technology,” Appleton said.

“VINYL is the company’s first direct to consumer product, and vinyl record sales are experiencing incredible tailwinds, the perfect intersection of the old and new.

“We feel the timing is right and the Jaxsta data powers a completely unique music discovery experience consistent with music fans’ hunger to discover music they love.

“We have over 50,000 Vinyl albums available to US, Canadian and Australian customers on what is the quintessential url, VINYL.com.

“We intend to own this space.”

 

How will you integrate Vampr into VINYL.com, which you’ve been working on?

“A complete product integration plan is underway,”  Appleton said.

“VINYL’s target audience and the Vampr audience are significantly overlapping cohorts and we believe will supercharge adoption without relying solely on marketing investment.

“Many aspiring musicians and artists begin their journey in the music industry through Vampr and  music creators are amongst the greatest music consumers, including purchasers of Vinyl records.

“One of VINYL’s key differentiators is its commitment to recognise and celebrate the work of all music creators, from artists and songwriters to producers, composers, engineers, and musicians, VINYL ensures that everyone involved in the creative process is acknowledged.

“This is a key offering for our Vampr community who in addition will be driving advocacy and brand loyalty for VINYL.”

What do you think the potential market size of Vampr and VINYL.com could be?

“One of the biggest stories of the past few years is the rise of self-releasing artists, who are quoted to be 6.4 million in number,” Appleton said.

“Then average creator spends more than $600 a year on music creation, promotion, distribution, and commercial tools.

“In total, the music creator tools market was worth $4.1 billion in 2022.

“Vampr and Jaxsta provide services that enable the Music Creator economy – self-releasing artists and those with label partners.

“And VINYL well, the vinyl revival continues its resurgence. Vinyl album sales in the United States grew for the 16th consecutive year and are projected to increase by US$663.77 million in the next 4-5 years.

“I know we are going to be an exceptional business, a fully integrated music tech company and platform that will be at the forefront of a rapidly evolving music industry landscape.”

Jaxsta is the largest and most connected music credits database in the world.  How will Jaxsta be able to use that database to potentially generate revenue via AI?

“The underlying value of Jaxsta’s technology is that none of the credits are crowd sourced (publicly sourced as opposed from official data sources) which means they’re verified and accurate,” Appleton said.

“Verified credits ensure that revenues earned by the creators are paid through correctly.

“We are investing in AI to significantly improve the music discovery experience through the VINYL platform.

“Credits data is a powerful dataset, one in which we have the most depth in the industry, to aid in the powering of unique music suggestions through anticipated interconnections between music contributors.

“There is a remarkable family tree-like interconnection between music contributors, especially music producers, engineers and musicians that is yet to be realised in any music discovery process.”

In what way does AI pose a threat to the music industry or Jaxsta?

“The music industry is already working together to prevent the proliferation of purely AI generated music. There is a lot of movement in the legal arena in support of protecting rights,” Appleton said.

“Inevitably learning music and recreating it in some way leads to a form of copyright infringement.

“Fortunately music rights are inherently complex which may ultimately aid in the protection against purely AI generated music.

“On a more positive note, AI can play a crucial role in improving music composition tooling and the creative process.

“There will always be the bad actors who want to capitalise on any opportunity to make money, however the music industry is ultimately human.

“We seek the expression and art of other humans.”

Songtradr is a global B2B music rights and licensing marketplace platform. Red Leaf Securities CEO John Athanasiou is bullish on JXT, particularly its support from Songtradr.

“We like to to call Jaxsta a company with microcap valuation and a billion-dollar board and is heavily supported by a company in America called Songtradr,”  Athanasiou told Stockhead.

Tell us about JXT’s relationship with Songtradr and how are they supportive?

“Songtradr first became a strategic investor in September 2020 and supported us in a round again in 2022. Songtradr truly understands the complexity of music rights, which is its core business,” Appleton said.

“Credits data directly relates to music rights.

“Without going through what is an unimaginably overcomplicated music rights ecosystem, put simply, Songtradr knows just how important music ownership and credits data is, and wanted to ensure they had a stake in the only company that has managed to aggregate this data.

“We work very closely together and Songtradr is also an API client of Jaxsta.

You had a strong Q3 FY23. You’ve done a good job in cost-cutting. Are you on the way to profitability.

“We are well on our way,” Appleton said.

“The combination of focused cost controls and prioritised investment into revenue generation has provides us a clear view to profitability and accelerated growth.”

There’s no other company really doing the work of Jaxsta and you have global scale.  Do you see competition in the future and if so where from?

“I think competition may always be a threat and we are now in several product lines so we will inevitably face competition,” Appleton said.

“We know there is no direct competitor to the at- source data Jaxsta has aggregated and the unique combination of Jaxsta, Vampr and VINYL places us in a unique place in the market.

“Jaxsta’s dataset as the only official music credits database and would take years to put in place.

“We now have over 320 million official credits, from over 300 plus data partners, all deep-linked creating a profile for every creator and this cannot be recreated overnight.

“Vampr is uniquely positioned as the dedicated app connecting music creators.

“More importantly this is a community and relationships that exist and interact daily.

“VINYL.com has to be the most iconic vinyl url there is and we have a unique proposition.

“We have the team, the music industry experience, network and strategic partners to make this happen.

“We are therefore exceptionally confident about our USP and what we will deliver over the next year.”

It’s been just over one year since you stepped up to be CEO of JXT. What gets you out of bed each morning excited to run the company?

“I have worked in the recording industry for many years in global and local roles at Universal Music, Richard Branson’s V2 records and Warner Music Group and as such, I clearly see the commercial opportunity Jaxsta has ahead and the powerful combination of Jaxsta, Vampr and VINYL,” Appleton said.

“It has been a transformational year, the team is excited and we are working hard to ensure that we are agile, making smart decisions while being as efficient as possible.

“Every day I can see how our efforts, collaborations  and deliverables are moving us closer to success and that’s addictive.”

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