TENCENT BUYS STAKE IN AI-DRIVEN A&R SCOUTING SPECIALIST INSTRUMENTAL

We wrote about the London-based company’s tech spotting huge tracks by the likes of Lil Nas X, Tones & I and Arizona Zervas months before those artists signed major label deals that helped their careers take off.

We wrote about Instrumental launching its internal label record label, Frtyfve, which enables it to invest early in emerging artists spotted by its own technology.

And two years ago, we wrote about Instrumental raising $4m to fuel its “aggressive growth plan”.

Now, that growth plan looks set to go supernova.

We learned today (October 27) that Instrumental has sold a minority stake in its business to two parties: Tencent Holdings and Tencent Music Entertainment (in which Tencent Holdings, of course, is a majority owner).

Little is known about the deal as you read this, although MBW understands that an official announcement is due in the coming days.

Instrumental uses proprietary algorithmic tech (i.e. machine learning) combined with human intelligence to comb streaming services and discover around 5,000 new artists a week whose popularity is starting to spike.

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Warner Music Group acquired a stake in Instrumental in 2015.

Partners who have used Instrumental’s tech to help discover artists to date include all three major labels plus, Live Nation and Paradigm.

Now, Tencent becomes a strategic partner of Instrumental, which was founded by its CEO – and ex-Warner exec – Conrad Withey.

Earlier this year, Withey told: “A&R covers a huge number of things – a wide variety of skills, processes, instinct, judgement and analysis. When you look at other industries these things have all become specialised, meaning that someone’s entire job is to become world class at each bit. So often in music one person is expected to do it all, which in the modern, streaming-first world just isn’t possible.

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“That’s where we come in – at least for one part of the A&R process. You can let the tech take the strain on the scouting and profiling side to support an individual or a team and be confident that our entire focus will be on doing that bit of the job really well.”

He added: “[The] application of machine learning and AI is all about augmenting human processes and Instrumental is committed to being the best in the world at scouting for new artists and letting [record labels] get on with the rest of the job.”

Instrumental declined to comment on today’s news when contacted by MBW.

Tencent has been steadily building its ownership presence in the music rights industry in recent years.

The company led a consortium that acquired 10% of Universal Music Group in March this year for over $3.3bn.

Tencent, which owns a 9% stake in Spotify, also owns a 1.6% stake in Warner Music Group

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