Boston a music tech hub with Spotify acquisition of The Echo Nest


Popular online music service Spotify will have its largest U.S. engineering outpost in Somerville with the planned acquisition of The Echo Nest.

That’s the word from Antonio Rodriguez, general partner at Matrix Partners and board member at The Echo Nest.  “We are going to have the largest U.S.-based Spotify engineering group here — not the Valley, but here,” Rodriguez said in an email.

The Echo Nest provides key technology to power Spotify’s services, using artificial intelligence and massive quantities of data about music.

The Boston area will now have “the biggest concentration of machine learning on music on the planet,” Rodriguez said. “It takes a few more of these, and then (Boston) will be back in the hunt in a big way as far as a global hub for innovation.”

Terms of the acquisition weren’t announced, though Rodriguez called it “a good deal for all of the investors involved.”

The Echo Nest had raised $27.3 million in venture capital. Along with Matrix Partners of Cambridge, other investors had included Waltham’s Commonwealth Capital Ventures and Norwest Venture Partners of Silicon Valley.

The company had employed 65, with 57 of those in Somerville and the rest in San Francisco, as of November, when I last spoke with chief executive Jim Lucchese.

Powering music services

The Echo Nest’s technology provides intelligence about music content to music services. The data gathered can be used to personalize song recommendations and radio playlists for users, for instance.spotify_screen_shot

Other services that have used The Echo Nest include Clear Channel, MTV, and Rdio. It wasn’t immediately clear if The Echo Nest will continue supplying to those services under Spotify’s ownership.

Spotify said The Echo Nest’s office near Davis Square will remain following the close of the deal. Spotify is based in Sweden, where it was founded in 2008, and has its U.S. headquarters in New York City.

The Echo Nest was founded in 2005 by Brian Whitman and Tristan Jehan, who were researchers in the MIT Media Lab at the time. In a blog post Thursday they wrote that “you’re about to see some great stuff from the new Echo Nest-enabled Spotify.”

It may not be coincidental that the acquisition comes just a few months after The Echo Nest expanded to offer advertising technology. The technology aims to help music services generate more revenue with better targeting of ads.

Lucchese told me in November that music services can use the technology to predict affinities among listeners that advertisers might be interested in.

In announcing the acquisition, Spotify founder and chief executive Daniel Ek said “we’ve been fans of The Echo Nest for a really long time and honored to have their talented team join Spotify.”

“With The Echo Nest joining Spotify, we will make a big leap forward in our quest to play you the best music possible,” he said in the news release.

Rodriguez offered more thoughts on the acquisition in a blog post Thursday, noting that when Whitman and Jehan started the company, “”big data’ didn’t exist as a buzzword.” From the post:

…the Echo Nest stuck to the conviction that music was the domain they wanted to dedicate their lives to. They stayed true to that mission in the face of distractions from world, which was quickly becoming aware of how important what they could do for user experience, advertising, video, etc. could be. Their expertise is extracting meaning from vast amounts of data.

The team also had conviction that their approach, to eschew both direct content licensing and build a consumer experience themselves, would allow them to focus on what they were particularly well suited for: context-aware recommendations and other types of data-driven music experiences.

Spotify reports having 24 million active users, with 6 million of those as paying subscribers.

Kyle Alspach has worked in journalism in Massachusetts since 2005 and was one of the original staff writers at BetaBoston.
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