According to conventional wisdom, consumer startups should move to San Francisco for access to capital, talent, and ideas. But if you’re launching an online music company, consider London or Berlin. For the past few years, a crop of internet music startups have been plying their trade in Europe, away from the glare of the major labels in the United States. Their playbook has been to achieve critical mass — with their product, users, and business model — before jumping over the pond.

Why Europe? One major reason is that it’s relatively easier to do licensing deals with the major labels there than in the United States. The U.S. is a much larger market, so new licensing models and frameworks undergo greater scrutiny because of the risk involved.

“The minute that I tell the major music labels that I am not interested in signing for rights to the U.S., the negotiations over terms become much, much easier,” said Axel Dauchez, CEO of the French start-up Deezer, in a recent Reuters story. The company plans to launch nearly everywhere but in the United States.

Entrepreneurs should also note that investors in Europe aren’t as jaded when it comes to music startups as their U.S. counterparts. Index Ventures stands out in this regard. Bolstered by their success with Last.fm, they’ve added Songkick, Soundcloud, and RJDJ to their portfolio in recent years. As a VC told me earlier this year, the reason he likes consumer music plays — as opposed to video ones — is that the licensing models are relatively well defined. There is a degree of certainty regarding the rates one has to pay for electronic sell-through, versus on-demand streaming, versus non-interactive radio, which Rolling Stone recently documented. Compare that with licensing premium video content, where the various licensing windows and unclear economics involved leads to uncertainty and risk.

All this has effectively turned Europe into a test bed for innovation in music (with the notable exception of internet radio, where the fragmented licensing regimes resulted in Pandora blocking non-U.S. listening).

Spotify is an excellent example of a digital music company that launched first in Europe and then expanded to the U.S., and their growth has been well documented. Much of their delay in getting licensed for the U.S. was rumored to be around the cash advances desired by the labels based on how “freemium” their model would be.

Before Spotify, there was Last.fm, the grandfather of European music startups. They came onto the scene just as I was winding up as COO at the internet radio network Live365. At the time, Last.fm’s look and feel was fresh, and they were innovating at an unbeatable pace. It boggled the mind that someone would invest in internet radio in 2002 given the industry’s trials and tribulations, but they persevered and CBS bought them five years later for a cool 0 million, making the company one of Europe’s biggest consumer start-up success stories.

Besides Last.fm and Spotify, these are the music start-ups to watch in Europe:

Songkick: Started by a Brit and an American, they are on a roll, having reached 100,000 activations within two weeks of launching their iPhone app. They’ve raised funding from Index, and earlier this year they poached an exec from Google to be their CTO. Songkick is centered around a concert listings service, but with social and commerce features that make it much easier to know when shows are happening near you.

Soundcloud: Billed as “YouTube for audio,” this is one of Berlin’s most prominent startups. Founded by Swedish entrepreneur, Alexander Ljung, the company is growing exponentially. It recently surpassed 8 million contributors, up from 3 million in February.

7Digital: Led by industry veteran, Ben Drury, the company is a pioneer in selling digital music. It continues to grow and be profitable, despite walking among giants like Apple and Amazon. Bolstered by its one million mobile users, 7Digital has expanded into the Asia Pacific region.

Mixcloud: Bootstrapped by computer science students from Cambridge, this startup provides a platform for sharing talk radio and music mixes. The site’s members have already uploaded 100,000 programs, and the founders have become fixtures on the Silicon Roundabout scene.

About the Author: Rags Gupta, based in London, is currently on sabbatical from the online video company Brightcove, where he has been vice president, international. Prior to that, he was an executive at Live365 from 1999 to 2004 and is currently an investor/advisor at 8tracks. He can be found at twitter.com/ragsgupta.

Image courtesy of Flickr user photosteve101.

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That up-front cost also gets you a 1.5 GHz dual-core processor, 1 GB RAM, 16 GB internal storage with support for a 16 GB microSD card and an 8-megapixel camera. It also includes Beats Audio technology for improved sound. Not included on the Rezound, however, is Android 4.0; at least not when the phone launches on Nov. 14. Instead, the handset runs on the Gingerbread version of Android. HTC said the device is “Ice Cream Sandwich ready”, and that an update to Android 4.0 is expected early in 2012.

No tablets yet have Android 4.0 either, but perhaps the secret to Android tablet success has less to do with the underlying operating system and more to do with the user interface and available content. That’s why I think Amazon and Barnes & Noble are both going to sell millions of their Android-based 7-inch tablets in the coming months; something no other Android tablet-maker has done yet.

Between the Kindle Fire and the upcoming Nook Tablet, both products use Android 2.3 with a clean, heavily customized interface that completely hides Android. They also focus on the key, primary activities that most people want in a mobile device: Reading digital media, browsing the web, consuming video content, checking email and running a handful of popular applications found in curated application stores. And they both do this with a relatively low price and no expensive monthly mobile broadband contract: 9 and 9 for the Kindle Fire and Nook Tablet, respectively.

In contrast, traditional phone and computer makers haven’t figured out this tablet strategy, or they don’t have the content to leverage. Instead, they’re focused on computer-like specifications and hardware and are trying to compete with Apple’s iPad.

A perfect example is the new Motorola Xoom 2, just introduced this week for the U.K. and Ireland. There’s little change from the first Xoom, which hasn’t been a popular seller: a 20 percent faster chip, weight savings, and a splash-guard screen coating are some of the differences. But none of these address why the Xoom hasn’t been selling millions of units.

Motorola, Samsung, HTC, LG and a score of others are likely to do better when the improved interface of Android 4.0 arrives on slates, which at this point is looking like a 2012 event. We may see one or two tablets with Ice Cream Sandwich before year-end, but I anticipate most will be shown off at January’s Consumer Electronics Show, with availability some time after that.

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Here’s our very first episode of Cord Cutters, published on October 19 2010:

Hey you, how do you watch TV?

NewTeeVee has covered the future of video since late 2006. We often focus on the business aspects of reinventing television, simply because the story behind the ascent of companies like Netflix and Hulu – and their recent struggles – is fascinating.

Of course, we’ve also paid attention to the consumer side all along, covering new devices like the Roku, the Apple TV or the Boxee that bring online video content to the TV screen. However, we didn’t want to become yet another gadget blog. Instead, we wanted to get a sense of how people were actually using these devices, and what difference they were making in their everyday lives.

We briefly contemplated visiting people at their homes and taking tons of photos of their setups. But then we realized that it isn’t just about the boxes you stack under your TV and the cables you use to connect them – even though, for geeks like us, that can be a lot of fun as well.

No, there is something more fundamental going on, something that’s at least as disruptive as the introduction of the DVR in 1999. With online video maturing from cat videos to long-form content, people are watching TV on their own terms, liberating themselves not only from the schedule, but also from a single category of devices, and finally from a bunch of previously pretty much mandatory services. Some people watch whole movies on the iPad, others stream Hulu content to the Xbox, while others again rediscover over-the air-television as the best HD signal there is.

We’re a nation of Cord Cutters

A big part of this has been cord cutting — as the act of giving up your traditional pay TV subscription is now known. The economic crisis has forced many of us to take another look at monthly expenses and pay TV providers are starting to feel the consequences. Pay TV subscriptions were down for the first time ever in two quarters of 2010. There was a slight rebound earlier this year, but things aren’t looking too good for the rest of the year. Some predict that nine million households won’t have cable by 2016.

We decided to devote a whole show to this trend not because we hate cable companies (even though everyone else seems to), or because we don’t think that the traditional 0 a month cable bundle is a very good deal for consumers (which it isn’t).

We did it because because we noticed that those cord cutters were the very people who were at the forefront of reinventing television. The folks in the trenches, who take their TV viewing back into their own hands and experiment until they find a solution that works best for them – and not the one-size-fits all approach that’s still at the core of pay TV.

And there was something else we quickly noticed: Cord cutters are everywhere, including at GigaOM. Check out this video we did late last year with a number of our employees:

Here’s to the alpha geeks

Granted, not everyone is ready to cut the cord and give up on cable or other forms of pay TV. Most households probably never will be – and working on Cord Cutters has given us a lot of invaluable feedback on why people stick with Comcast or U-verse. Sports is still a big reason, falling in love with a certain show or network that aren’t available online is yet another.

However, cord cutting still matters. Not only financially, as pay TV providers see their slim growth margins breaking away, but also to innovation in this industry. Tim O’Reilly has long been talking about the alpha geeks –  the people who impact our collective future by inventing and crash-testing it today. Cord cutters are the TV world’s alpha geeks. Watch them watch TV, and you’ll get a sense of where all of our TV consumption is going.

Unfortunately, there’s a bit of a misconception, leading many people to believe that alpha geeks all work at some hot Silicon Valley startups. It’s true that folks in tech seem to be most vocal about cord cutting and many other tech trends. But if you look at the history of technology, it’s more often than not folks outside of the Valley that got the ball rolling.

Minorities, and not startup CEOs, were the first to really embrace cell phones in the U.S. Teenagers in Europe were getting blisters from texting long before mobile messaging became fashionable stateside. And farmers in rural Kenya have done mobile commerce long before you and I even heard about Google Wallet.

It’s not about geeks vs. have-nots

Why does this matter? Because with cord cutting, some industry insiders want to differentiate between the tech-savvy and the economically depressed, arguing that most people simply give up on pay TV when things are tough, only to sign up again once the economy recovers.

But at least judging by the feedback we’ve gotten from people of all ages and backgrounds who watch Cord Cutters, this couldn’t be further from the truth. Cord Cutters are general contractors, priests, politicians, retirees, teachers, students, liberals, conservatives and libertarians – and they’re all united by a desire to watch TV differently.

Helping our viewers to make that happen – and learn a whole lot about the future of TV in the process – has been the most satisfying part of producing Cord Cutters. We can’t wait to see what’s next.

Check the embed below for some of the more recent episodes of Cord Cutters, or visit the show page to browse our entire archive.

We would like to hear from you: What do you want to see on future episodes of Cord Cutters? What else should we do, or what should e do differently? Do you want more product demos, more tips & tricks, or more meetups? Let us know in the comments!

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iUsers frees your iPad of monogamy, enables multiple user profiles originally appeared on Engadget on Sun, 17 Jul 2011 14:41:00 EDT. Please see our terms for use of feeds.

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The explosion of content

Clearly there has been an explosion of content over the past five years — a trend that shows no signs of abating. In the land of a million channels, the filter will be king. Value will accrue to those that aggregate and filter programming.

• As with traditional television, there will be a handful of new video aggregators that emerge with sustainable businesses. The fact is that aggregating video content today is an expensive proposition. One must have deep pockets to buy the rights and distribution scale to justify the expenditure. In the US, we’re seeing this play out with Netflix, Amazon, YouTube, Apple, AOL, Yahoo and Hulu contending for online rights alongside the cable companies. It will be increasingly difficult for new entrants to make inroads here. There is no shortage of startups trying to be the EPG of online and mobile video.  But the best filters rely on scale and leverage network economies (Amazon reviews, Netflix, Pandora), and so it will be a “winner take all” (or, at least, “most”) outcome.

• YouTube will be spun out. Google will realize it could get more value from YouTube by spinning it out. YouTube is acting more and more like a traditional programmer of content – buying up rights, funding original programming and so on –- and getting more “media DNA” will be as important for them as technical talent.

• The plethora of available content will, paradoxically, mean that live events, especially premium sports with broad appeal (F1, World/Euro Cup, Superbowl, Olympics, IPL, major golf & tennis) will grow in stature and wealth. They will benefit from the scarcity of events with mass appeal given the time-shifted nature of video consumption. This lack of “supply” will result in concerted efforts to create more “tent-pole” events — there’s too much money at stake not to try. The IPL is the best recent example of this but look for more here — World Cup Basketball anyone?

The emergence of the social graph

We are still coming to terms with the power and implications of the social graph. While Facebook was first seen as a pure social networking and communication utility platform, it is increasingly becoming a place to consume media. So I predict that Facebook will overtake YouTube as a video consumption destination in the next five years.

Facebook is already a major media consumption platform with all of the social gaming that currently occurs. Moving into other content categories such as music and video is not a big stretch. In fact they just appointed Reed Hastings to their Board – a signal of their media ambitions not to be ignored. Moreover, they have a music strategy afoot (which I think will be big).

Video content owners today program channels on Facebook but there is no aggregation across channels. This represents a market opportunity for Facebook or another aggregator that would take advantage of their social graph.

Mobile and the cloud

Media consumption on smartphones and tablets is increasing on an exponential basis. At the same time, the “cloud” is enabling on-demand access to software and media, and obviating the need to store and sync files locally. Given these two trends, it seems a smart bet that the smartphone/tablet will be the hub for accessing and displaying content with “dumb screens” such as TVs and computer monitors that will get the signal from them. Smartphone docks are already being built into car dashboards, which could make the radio tuner redundant.

New Players on the World Stage

We will see a challenge to the dominance of U.S. and Western European media companies coinciding with the growing economic power of emerging market economies. There are players in these so-called emerging markets that are already making a splash and this will only continue. Abu Dhabi Media, Naspers, Al Jazeera, Globo, Televisa, Reliance, Mail.ru, CCTV and others will be asserting more influence on the world stage — and on par with the Disneys, News Corps and Universals of the world. Look for a major U.S./Western European network to be bought by an emerging market player. It wouldn’t surprise me to see one of them make a play for Hulu.

Finally, there’s the “wild card.” The above predictions aren’t necessary big leaps of faith to make. More significant will be the wild cards that aren’t even on the radar. After all, YouTube, Facebook and the explosion of social networking and UGC were mere glimmers in the eye 10 years ago.  It will be fun to watch.

Rags Gupta is currently VP at Brightcove, based out of London. He can be found at www.twitter.com/ragsgupta and www.ragsgupta.com. All of the opinions expressed are his own and not that of any companies he is affiliated with.

Image courtesy Flickr user islandguy

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