NBS high-tech tracker of music buzz

Flags: Technology, Internet, Small BizBOULDER – In the music industry, few things are more valuable than the fabled “golden ears” that allow talent scouts and labels to pick out musicians ready to deliver the next big hit.

For most of the industry’s history, those ears helped record companies launch countless acts and make enormous sums of money. Then the Internet, music downloading and social media destroyed the old way of doing business.

Now the industry is trying to find tools to help make sense of the new world, and one of the companies cashing in is Next Big Sound Inc., a Boulder-based tech startup that tracks online buzz around bands by following social media mentions on Facebook and Twitter, sales data and online plays on YouTube.

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Next Big Sound announced Jan. 4 that it closed a $6.5 million Series A round, signed deals with two major record labels and will open an office in New York City.

It is an exciting time for Next Big Sound and its staff of about 10 employees, co-founder and chief executive Alex White said, and it has ambitious plans to seize the moment.

Next Big Sound’s goal is to become the industry standard for tracking how people consume and discuss music and to become the 21st century equivalent of The Nielsen Co., White said.

If it reaches that goal, Next Big Sound will change how labels, agents, managers and artists do business.

“We think the opportunity for us to transform the industry, the multibillion-dollar music industry, is a huge opportunity,” White said.

The investment will let the company scale up to realize its potential.

“Now we have the liberty and opportunity to hire and invest massively in this opportunity we see in front of us,” White said.

In addition to opening the New York office, Next Big Sound is hiring infrastructure engineers, data analysts, systems administrators, front-end developers and data visualization experts.

White, 25, has a background in the music business. White organized and promoted concerts while a student at Northwestern University, interned in the music industry and managed a two-month nationwide tour.

During that tour White started developing the ideas that would spark the creation of Next Big Sound. Tracking concert listings, media mentions, advertisements and airplay was a nearly impossible task, hampering the band’s efforts to promote its shows.

“I had no idea what was working and not working,” White said.

White realized if someone could pull that data together and help bands glean useful information from, they’d have a hit.

While White knew music, he and co-founders Samir Rayani and David Hoffman needed to learn how to start and run a business. That led them to Boulder, where they were part of TechStars’ Class of 2009.

The team’s clear sense of what the music industry needed and how to address that need made them standouts, Foundry Group managing partner Jason Mendelson said.

“I remember thinking immediately, “Oh my God, these guys are special,” Mendelson said. He became the company’s mentor, and Foundry put up some of the nearly $1 million in seed money Next Big Sound raised in 2009.

Mendelson is a member of Next Big Sound’s board, and Foundry also invested in the Series A round, along with IA Ventures, a New York City-based venture capital firm.

Foundry invested in Next Big Sound because it thinks the company will be able to capitalize on turmoil in the industry, Mendelson said.

Record labels’ traditional function of producing records has been diminished by inexpensive recording and mixing software, and iTunes and illegal downloads have wrecked the labels’ distribution system.

“The only thing they’re really good for now is marketing,” Mendelson said, and feedback like that provided by Next Big Sound will be crucial to labels in their efforts to promote acts.

Record labels “need to be completely obsessed with data, or they’re going to go away.”

The upheaval doesn’t end with music. Data analytics have the potential to impact movies, television, games and other industries.

“All entertainment and media is going in this direction. The muscles we’re flexing could apply elsewhere, but we’re 100 percent focused on music,” White said.

Some prominent voices in the music industry have caught on to Next Big Sound’s value. Billboard magazine relies on the company to compile its Social 50 chart and a chart of up-and-coming artists.

The charts are displayed in print and online next to the famous Billboard 200 and Hot 100 charts, which are compiled from data provided by Nielsen SoundScan.

“That was a huge stamp of credibility for a young company,” White said.