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The music industry is gearing up to spin revenue from a new source: the billions of hours of DJ mixes and mashups that dance-music fans listen to online each year.
Spotify AB, Apple Inc. ’s Beats Music and most subscription music services don’t include DJ creations or user-made mixes in their song libraries because they don’t have a way to pay for them. Record labels, meanwhile, have been slow to agree on a revenue-sharing plan.
One startup is trying to solve the problem. Dubset Media Inc. has developed technology to track how much of each song is used in any given DJ-made track or mix. It can then calculate royalties owed to artists like Lady Gaga or Jay Z whose music was sampled.
The New York-based startup is in discussions with the major record labels— Vivendi SA ’s Universal Music Group, Sony Corp.’s Sony Music Entertainment and Access Industries’ Warner Music Group—to license music that DJs have mixed. Such deals could pave the way for Dubset to distribute such mixes to streaming services such as Spotify.
The labels are in need of new revenue streams. Global recorded music sales peaked in 1999 at $40 billion and have shriveled as fans started sharing files online and shifted to sites like YouTube for free music. The industry brought in $15 billion in revenue in 2013—with more than $1 billion from streaming services, according to the International Federation of the Phonographic Industry.