Music streaming service 8tracks has been profitable since 2012, but wants to move faster. For its new round of funding, the company chose to secure a $2.5 million debt financing from Silicon Valley Bank. As a reminder, 8tracks is a library of modern mixtapes, as anyone can create and listen to user-generated playlists based on genres and moods.
The company recently moved into direct licensing deals with music labels in order to build its own song library for its playlist creators. Independent labels and aggregators INgrooves, CD Baby, Dim Mak and DashGo led the way in April, TuneCore, Naxos, Black Hole Recordings and Armand Van Buuren’s Armada Records are now joining the music library, covering a wide range of genres from classical music (Naxos) to trance (Black Hole Recordings).
Playlist creators can pick songs from 9 million different tracks, or upload songs directly from their computers as a last resort. This crowd-curated model makes even more sense now that Apple is introducing Beats1, a 24/7 music radio station with real human voices behind the microphone. While many still think that radio is dying, modern services like 8tracks, Pandora and Beats1 are refreshing the format.
8tracks is at a turning point. It has a huge library of great playlists, and you can find a bunch of new playlists covering your favorite combination of genres and moods every day. Yet, it’s sometimes hard to surface the best playlists if you don’t know 8tracks’ tag language — for instance, you can browse playlists featuring the “night”, “summer bbq” or “study” tag. The company has been working through its listening data to customize your explore experience depending on what you usually like and listen to.
It’s a step in the right direction as 8tracks needs to provide a more lean-back experience. But music recommendation requires a lot of resources, and that’s why today’s new funding will help grow the engineering team to work on personalization. As I mentioned last time, the company is also working on playlist creation from the mobile app. All of this should help bring new users.