After a brief brush with bleak financials and turbulent management—changing three CEOs in two years, music database company Jaxsta (ASX: JXT) appears to be making a comeback. It has entered into a significant partnership with the US-based Mechanical Licensing Collective (the MLC), a non-profit entity founded under the Music Modernization Act of 2018. This organisation was established with the purpose of granting comprehensive mechanical licenses to eligible streaming platforms, including popular services like Spotify, Apple Music, Amazon Music, and Tidal.
Mechanical licences grant the right to reproduce and distribute copyrighted music in recorded formats like CDs, digital downloads, and streaming. These ensure that creators are paid for their work when their music is used. In 2022, the MLC declared that it had disbursed more than $1 billion in royalties to songwriters and publishers within the initial year and a half of operation.
Jaxsta obtained this major agreement through a worldwide competitive bidding process and stems from the recent effective execution of Jaxsta’s Recording Clustering Proof of Concept (PoC).
CEO of Jaxsta, Josh Simons, said, “This contract with the MLC is a substantial testament to the quality of Jaxsta’s service – its cruciality to key facilitators of the music industry.”
“Partnering with the MLC further solidifies Jaxsta’s reputation as an enterprise solution provider and illustrates the direct applicability and scalability of our service and proprietary clustering technology. We believe this contract with the MLC symbolizes a major step forward in our growth strategy and offers exciting opportunities for our shareholders.”
The MLC’s adoption of Jaxsta’s services confirms the utility of Jaxsta for royalty collection agencies dealing with comparable substantial data, like the MLC. The agreement comprises an initial setup charge, payable within 30 days from the contract commencement, to facilitate the transition of Proof of Concept (PoC) features into a functional system and set up the agreed data transfer methods. Moreover, the tiered monthly pricing provides the MLC with an adaptable and expandable solution tailored to its needs. The tiered monthly cost is applicable solely for months when the service is actively used.
Due to the variable nature of its usage, the exact total value of this contract cannot be accurately determined at this point. However, updates on the progress of this revenue stream will be provided to the market as it unfolds.
In June 2023, just two months ago, Josh Simons, formerly the co-founder of Vampr, took the helm as Jaxsta’s new CEO, replacing Beth Appleton. At the time, the Company had about $2.996 million in cash reserves. In FY23, its cash burn stood at over $3 million.
The MLC contract starts immediately upon the implementation of the production environment functionality and doesn’t have a specific end date. It does, however, include a 30-day termination clause.
Jaxsta’s Chief Technology Officer Michael Stone will transition to a new role as Jaxsta Technical Director to oversee the project and ensure the smooth delivery of the agreed services.
Alinda is a Business Reporter for The Sentiment
Latest posts by Alinda Gupta (see all)
- Ovanti’s iSentric signs contracts worth $14.4m with Malaysian commercial bank - June 27, 2024
- Baby Bunting fights back from retail downturn with 5-year strategy, includes Gen-Z focus and self-funded growth - June 27, 2024
- CLEO meets with US FDA to develop strategy for ovarian cancer test launch - June 26, 2024
Leave a Comment
You must be logged in to post a comment.