Downtown Music CTO, Tom Allen: “People are running scared from AI”

Technical skills: Tom Allen is CTO at Downtown Music, where he oversees the company’s deployment of technology and how it works with external products and services. Music companies’ relationship with technology has shifted dramatically over the past century. Initially, as often tech companies themselves, labels were architects of their own futures and gatekeepers of their own formats. That changed in the late 1990s as tech companies started pulling the rug from under the labels’ feet, triggering suspicion and animosity between both sides. A full armistice has not been reached, but a steady repairing of relations is recalibrating past turmoil.

Allen explains why the enmity between tech companies and music companies is cooling down, where CTOs can be translators/mediators between both sides, how AI could be as much an existential threat for tech giants as it is for music creators, and the different ways in which data is not just measured but valued. 

---

There was a time when music and technology were more than compatible bedfellows, primarily because record labels were also technology companies. There are numerous tales of the engineers in their white coats at EMI Recording Studios (later Abbey Road), or how Columbia invented the LP in 1948 and RCA Victor created the 45rpm single in 1949, or how Philips (which owned PolyGram) developed the compact cassette in 1963 and, alongside Sony, co-created and launched the CD in 1982. By the 1990s, however, there were not just expensive misfires, like the damp squib that was the MiniDisc in 1992, but new digital formats and distribution being developed outside of the purview of the labels, most significantly the MP3, which caused chaos when Napster appeared and turbocharged its impact in 1999. 

The late 1990s, as (excuse the crass self-promotion) explored in my most recent book, was both the peak of CD sales and the peak of the first dot com boom. This is when relations between record labels and Silicon Valley (as a metonym for all tech companies) acridly curdled. Music tech startups felt labels were abusing their position to relieve them of their VC funding/equity while labels felt tech companies were trying to seize their copyrights while burning down any IP that did not belong to them. Relations have been uneasy since, a love-hate dance unfurling over the past quarter century. AI is the latest flashpoint in this complex relationship, although the playbook move from litigation threats to licensing frameworks has happened much quicker. The bifurcated politics here remain spiky, just less spiky. 

Tom Allen suggests the role of the CTO at music companies is part of a wider appeasement process happening between music and technology, seeing a binary clash as reductive and ultimately unhelpful to either “side”. 

“It’s a role about people and about culture,” he says of the bridging role of the CTO in music companies. “It’s about how we create the right environment to bring technology into the business and deliver on that. It’s a Chief People Officer of technology really.”

That said, the rapid rise of AI and some of the uncertainty/fear about where it could move next is causing some consternation within the music business. Is it an existential threat? A growth driver? Both? And if so, what way does the power balance tilt? 

“At the moment, people are running scared from it,” he says of AI. “They are starting to run a bit scared of what it will change in the dynamics of our business.”

The industry’s newest dilemma

The book that gripped the music and tech industries in the late 1990s was The Innovator’s Dilemma: When New Technologies Cause Great Firms To Fail by Clayton Christensen. It looked at the pain points in businesses and how they did or did not respond to external forces of change, arguing that they need to be prepared to disrupt themselves in order to survive instead of standing by helplessly and watching external forces disrupt and destroy them. 

We are arguably seeing this dilemma play out again around AI (let’s call it the AInnovator’s Dilemma), with even the most powerful tech companies in the world at risk, not just music companies. “Google faces it right now with AI and the ad business,” Allen argues. “Google have had the greatest business on earth for the last 20 years – and they face it right now. You can be prepared for it, but you still have to make some strategic change at some point in time. How do we deal with this? What does this do for us? Those fundamentals will still be true no matter what you’re doing. And yes, you might be better prepared for it.”

(After we speak, Sundar Pichai – the CEO of Alphabet, the parent company of Google – told the BBC that, should the AI bubble burst, “no company is going to be immune, including us”.) 

“You can be prepared for [AI], but you still have to make some strategic change at some point in time” Tom ALlen

He explains how Downtown is using AI itself. “We’re not training whole AI models ourselves,” he explains. “We’re utilising tools that are out there and then we’ve got our layer on top of that and train it on our data for internal use cases. We have technologies for Fuga on the delivery side and trends management, and Curve for royalty management. We utilise a lot of cloud technologies, but they also put our layer on top.”

At the sharp end of the business, data belching out of many of the new tech-powered platforms (music, video, social media, ticketing, D2C and so on) has been a boon; but previously the aggregation and dissection of it was the preserve of a few huge companies able to invest in the right tools and processes. It is now becoming easier and cheaper for acts to gather and process “owned” data. Is this making the companies that previously had the monopoly nervous here? 

Data ownership – the new pain point?

Owning and monetising data is becoming even more of a core focus at major labels and other music companies now.

“I think that businesses worldwide are aware of all of [the importance and power of data] and will provide some value there,” says Allen. “It doesn’t provide the biggest value to us at Downtown, necessarily. But we do plenty with it and understand it.”

Universal Music Group, via Virgin Music Group, is moving to acquire Downtown. Impala is leading the lobbying against this acquisition at the European level and, as of September, the European Commission said its ruling on the deal has been paused pending the gathering of further information. One of the opposition points is around whether or not Universal, via the Fuga and Curve acquisitions, will get access to sensitive competitor data on indie labels. 

Perhaps more than data being the “new land-grab”, it is also the new consolidation pain point.