ROLI hits reboot, files for administration, as it shifts to beginners and subscriptions

ROLI has filed for administration and will reboot as beginner-focused Luminary as the company struggles with losses. A portion of employees remain, and even the Seaboard is apparently coming back in stock – but this could be a cautionary tale for “hypergrowth” in music making.

The UK-based startup had always been something of a puzzle to the instruments industry. On one hand, they had innovative products – those famous squishy keyboards – plus loads of celebrity endorsements (like Pharell and Grimes). They also have been able to hire an incredible amount of talent, including acquisitions of the FXpansion software development team and (at one point) the widely used JUCE framework and its star developer.

But on the other hand, it was clear ROLI was burning investment money in pursuit of a growth strategy that seemed potentially unrealistic to an outside observer.

And at the moment, I’m not really going out on a limb saying that, because I can just quote CEO Roland Lamb talking to Business Insider about the decision to file for administration:

“Ultimately, what happened was the pro-focused products we initially developed, although successful within their marketplace, the marketplace wasn’t big enough given our venture trajectory,” Lamb told Insider on Wednesday. “We had our eyes set on hypergrowth, and that proved to be difficult.”

“Hypergrowth” is an interesting term, as most enduring names in the music tech business in fact have pursued very conservative, gradual growth. Household names like Ableton or Roland or Avid have been almost like blue-chips for musicians. And the losses ROLI accrued were real – the most recent filing is back to 2019, with pretax losses of £34.1 million on revenues of £11.4 million. Lamb describes the process of the reboot as involving “dark nights of the soul.”

So let’s get to what this means.

Let me also say – I sincerely hope former ROLI employees are all landing on their feet, whether at Luminary or (for most, realistically) post-ROLI.

[embedded content]

The tech itself remains innovative, expressive, and presented in an appealing and futuristic product. But if advanced users get that, will beginners – enough to support growth of the rebooted company?

What happens to ROLI

I expect the major concern for electronic musicians is what will happen to the folks working for the company and the tools you rely on in your music-making. Here’s what we know:

Pharrell- and Grimes-backed music startup Roli files for administration and reboots as Luminary to refocus on beginner musicians [ Business Insider, who got the exclusive on the story (it seems directly from ROLI) – paywall ]

ROLI, the company. ROLI has filed for administration – you can read up on what that means in UK business law. This is not the same as filing for “bankruptcy,” but it is a related process, in that you are acknowledging your company will be unable to pay all its debts and protects you from action by your creditors. That timespan is limited, but then what administration allows you to do is to try to prevent the company from being liquidated by executing a restructuring plan. And in the case of ROLI, that means relaunching as Luminary.

Meet Luminary. Luminary will take on the venture debt and all of the ROLI intellectual property and assets. That means as far as we’re concerned as consumers, it effectively is ROLI with a different name. But some of $75.7 million in investment in ROLI won’t be paid back, even as some unknown portion of that is taken on by Luminary. (Essentially, some venture funders can decide to move their debt over to the new company.)

ROLI’s employees. Insider reports that 70 employees will wind up in the new business. That sounds like a lot, but headcount at ROLI was at some point up to 250 people, so while I haven’t tracked my LinkedIn closely through the pandemic, I imagine there are some significant headcount reductions even in this round. Some other departures had already been taking place, including engineers from the FXpansion team. That raises ongoing concerns about brain drain, given Luminary is talking about pushing its subscription-based software business. (Congrats to Angus Hewlett on becoming CTO at Image-Line – a company with a long track record of happy musicians via its FL Studio product.)

There’s another term for this approach – “pre-pack (pre-packaged) insolvency,” and it’s apparently fairly common. There’s an equivalent under US Chapter 11 filings and law in other countries (Germany, Canada, etc.). You decide on a restructuring plan, then declare insolvency – that’s the pre-pack part, in that you restructure first. I’m not a business lawyer, but at least that explains how ROLI already has a plan going forward as Luminary.

JUCE. This essential framework for C++ development across platforms and plug-in formats actually found a new home already last spring. ROLI sold off JUCE to PACE Anti-Piracy. Now, PACE is not exactly beloved by the developer community even as it is widely used, but yes, that effectively meant JUCE was understood to be reasonably safe as a platform post-ROLI.

Seaboard hardware. Insider also reports that the flagship Seaboard controller will become available again soon. (I assume that means the RISE model, but there aren’t details yet. I do still like mine.)

That hardware had been unavailable. Insider blames part of ROLI’s revenue woes not only on lack of targeted growth but also the pandemic. It seems reasonable to assume that industry-wide parts shortages, plus disruptions to shipping and assembly (especially as ROLI assembles products in London) may have impacted hardware production. (It’s also I think a common misconception that the pandemic was universally good for the music instruments industry.) The exact contribution of the pandemic to ROLI’s situation is unclear, however, especially without a financial filing since 2019.

Financial filings reveal that even with powerful software from FXpansion and on iOS, most of ROLI’s business remained in hardware. And that pro-focused hardware never reached revenue or growth targets, as the company’s losses mounted.

What’s next with Luminary

CEO Roland Lamb and chief people officer Corey Harrow go on with Luminary. That means focusing on their light-up keyboard Lumi (US$299) and its companion app, which are intended to help you learn to play music. I was going to use the phrase “Peleton for music” – but of course that’s exactly how Lamb pitches it. You pay $79 a year and the app works with the light-up keyboard to teach you to play.

It goes without saying that venture finance at the moment absolutely adores subscription models. What’s unclear to me is whether consumers will love them as much as the investors do. And hey, that’s you (among other folks, some of whom may have very different experience levels and interests than you).

But the play here is simple: assume there are more beginners out there than there are advanced users and hope they want to pay the $299 + $79/year to learn to play music.

[embedded content]

But wait, does this actually make sense?

I’ll leave aside the question of whether you want to have keys light up to tell you which notes to play in the first place. For what it is, Lumi is attractive, modern, innovative – it’s probably the most immediately appealing light-up keyboard/app combo. It’s not the only one, though. Casio makes light-up keyboards, for example. So does Yamaha. Now, they’re definitely conservative in design. They don’t even really look like they were designed this century. But on the other hand, these “legacy” brands also have massive distribution and marketing efforts that mean that if you walk into a brick-and-mortar music store with your kid asking about what to play, you’ll see these products – whether that’s relevant in the 2020s being a separate question.

Oh yeah, and it’s also worth noting that the piano, as always, has to compete with the guitar. Gibson also has an app and learning system. And – speaking as a lifelong keyboardist and pianist here and former contributing editor to Keyboard mag who did cover stories with pretty famous people – I’m told guitarists are cooler and sexier to most people. (No accounting for taste.)

But that’s only looking in music. Maybe the more relevant question is how music in general stacks up to competition from all the other things you can do with your time and money. And then you have to hope that on top of lots of other entertainment subscriptions, people will want to take on a hardware investment and a subscription in order to learn to play music with whatever time they have left.

Heck, to be perfectly frank, if you give me a choice between a Lumi and an Xbox, I’d take the Xbox. I might even take a Super NES and Mario Kart. (Huh. I should really get that in the studio. But I digress.)

Seriously, though, this is a question every industry player now pushing SaaS (Software as a Service) will have to answer, if they want to achieve any growth at all, let alone Lamb’s “hypergrowth.” There’s a gap between “we want SaaS to work because that’d be good for us as investors” and “SaaS is proving to be a solid investment with real consumers.” It’s also obvious that a subscription to Reason, to Lumi, to iZotope stuff, to Adobe Creative Suite… these are not all created equal.

I don’t think I’m saying something at all controversial here; this kind of skepticism is as easily overheard in the music instruments business as ground loop hum. And we’re not even having to risk our own investment.

So without making a prediction about SaaS either way – maybe it will prove to be a winner – it’s safe to say these are the questions everyone will be asking. They’ll be asking not only about Luminary, but about all music tech companies seeking venture funding for growth using subscriptions.

And we do have a bumper crop of those right now, partly because 2020 numbers were as good as they were, driven by pandemic-lockdown at home use. It meant that the economy of how much time you had, at least, did suddenly jump in 2020.

The question now is, will music tech be able to compete as lockdowns gradually end, and people have less time at home making music again – especially beginners or casual users who may ultimately decide they would rather do something else.

I hope Luminary does find a model that’s sustainable, and all my best to those going to the new company – and to those who may be moving on. These larger questions will continue on loop industry-wide for the coming years, it seems.

As I write this, ROLI’s site is here:

https://roli.com/

ABBA announce new album and “revolutionary” tour

ABBA have announced a new album and “revolutionary” tour.

Four decades after the release of their final album, the legendary Swedish pop group have shared two new singles, ‘I Still Have Faith In You’ and ‘Don’t Shut Me Down’, alongside the news of a 10-track studio album, ‘Voyage’, which is set for release in November.

The outfit — comprised of Benny Andersson, Agnetha Fältskog, Anni-Frid Lyngstad and Björn Ulvaeus — first began teasing their return back in 2016, after revealing that there was to be a “virtual and digital” live experience happening in future. Ulvaeus from previously spoke about the digital tour, telling press that the technology digitally scanned the group and “de-aged” them to look like they did during their heyday.

Alongside the album announcement, ABBA confirmed that from May 2022 digital versions of the group will perform alongside a live band at the new 3,000-capacity “Abba Arena” in East London. 

Tickets for the ABBA live performances will be on sale from next Tuesday, 7th September. You can find out more here.

Listen to ‘I Still have Faith In You’ and ‘Don’t Shut Me Down’ ahead of the album’s full release on 5th November.

First Listen: Tungevaag and Bassjackers rain beats from the heavens with new single, ‘Written In The Stars’

First Listen: Tungevaag and Bassjackers rain beats from the heavens with new single, ‘Written In The Stars’Tungevaag Dancing Astronaut Credit Press

Norway’s Tungevaag (seen above) teams up with the bodacious Dutch duo Bassjackers for the new single “Written In The Stars.” The new release is a melodically enriched celestial delight, one that brings enough big-room flare to send fans across the galaxy straight into orbit.

While Tungevaag continues to make waves in the European dance scene, with singles like “Play” and “Dance” collectively amassing hundreds of millions of plays, the Norwegian talent is still a relatively fresh face stateside. His new single alongside Bassjackers represents a true melting pot of complimentary talents. “Written In The Stars” puts Tungevaag’s resonating productions and soft melodic touch on full display, as they together set the stage for Bassjackers’ signature MainStage style. The result is a complete cosmic package that’s ready to launch listeners straight into the dance music stratosphere.

“Written In The Stars” is out on Spinnin’ Records today, September 3. Listen to Tungevaag and Bassjackers’ new song below.

Featured image: Press

The post First Listen: Tungevaag and Bassjackers rain beats from the heavens with new single, ‘Written In The Stars’ appeared first on Dancing Astronaut.