Ex-EMI Boss Nicoli Returns With New Music Gig
Eric Nicoli, the former chief executive of EMI, is returning to the music industry as an investor in Tunehog, a service that aims to stand out from a crowded digital streaming market through technology which sonically 'maps' millions of songs.
Mr Nicoli, the chairman of R&R Music, Tunehog's parent company, has been working on the new venture alongside David Ritchie, the company's chief executive.
Sky News understands that R&R has secured financial backing totalling more than £10m from Toscafund, a prominent investment firm, and Martin Hughes, its principal.
R&R, which has launched a number of apps in online stores in recent weeks, will target artists and advertisers as well as music fans through a range of services.
Since leaving EMI in 2007, Mr Nicoli has held a number of non-executive posts, including roles at Greencore, the Irish food group, Vue Entertainment, the cinema operator, and Uswitch, the online consumer services website.
He and Mr Ritchie established R&R in 2008 with the aim of developing a digital music service which differentiates itself from a wide proliferation of rivals through its ownership of algorithmic technology, which allows it to 'discover' music tailored to individual customers' preferences.
Developed under the code-name Project Synapse, the venture attempts to "create a music ecosystem that creates individualised and completely personalised music offerings that reflect the way that the brain and body relates to sound in everyday life," according to marketing materials seen by Sky News.
R&R's products include Discovery Player, which enables fans to use their musical tastes to identify tracks from established and emerging artists - Sync, a one-stop shop for brands looking to license music for commercial projects - and Hitmaker, a tool for music professionals who want to optimise the quality of their work or their portfolio.
A number of deals with commercial partners, including several global consumer brands, are being finalised, according to people close to the company.
The music-streaming market has exploded during the last decade, with digital revenues accounting for roughly $5.8bn (£3.45bn) of the industry's $16.5bn (£9.8bn) of recorded music sales in 2012.
Despite the likes of Apple's iTunes spending vast sums of money on marketing, no single service has so far emerged as a dominant force in digital music retailing.
Pandora Music, Spotify and Beats Music, which is backed by the rapper and producer Dr Dre, have all launched consumer propositions with varying levels of sophistication at targeting individual consumers.
Meanwhile, MusicQubed, a UK-based venture backed by Sir Richard Branson, the Virgin Group founder, is trying to undercut more expensive subscription-based services.
Tunehog represents Mr Nicoli's first consumer-facing music venture since he achieved a stellar outcome for shareholders in EMI by selling it to Terra Firma Capital Partners, the private equity firm headed by Guy Hands, the City financier, for more than £4bn.
EMI was subsequently taken over by Citi, its principal lender, in 2009, after running into financial trouble, and was then broken up and sold to Warner Music Group and Sony.
Mr Hands continues to pursue legal action against Citi over its seizure of EMI.