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Somerville online music pioneers get $17.3 million in funding

Tristan Jehan, cofounder and chief scientific officer of The Echo Nest, worked in his office on Wednesday.

Dina Rudick/Globe Staff

Tristan Jehan, cofounder and chief scientific officer of The Echo Nest, worked in his office on Wednesday.

They’re disc jockeys for the digital age.

About 30 music-obsessed computer engineers who work for Somerville’s The Echo Nest determine whether listeners of Spotify or Clear Channel’s iHeartRadio, two of the most popular online music streaming services, hear Carly Rae Jepsen’s “Call Me Maybe” or Toby Keith’s “Red Solo Cup” once they log on and start listening.

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The Echo Nest, which was founded in 2005 by two Massachusetts Institute of Technology computer science doctoral graduates, has pioneered the under-the hood artificial intelligence that a growing number of music streaming services use to find out whether their listeners are pop music lovers or country fanatics.

The company has existed behind the scenes, but with The Echo Nest closing a $17.3 million venture capital funding round on Thursday, it could soon raise its profile in the Boston area as well as in the increasingly digital music marketplace.

“My dream for these guys is that they become the Dolby for the digital music experience,” said Antonio Rodriguez, general partner at the Waltham venture capital firm Matrix Partners, referring to Dolby Laboratories Inc., the company that provides much of the sound technology in consumer electronics.

Rodriguez, who is a board member of The Echo Nest, led a $7 million round of investment into the company in 2010. Matrix is contributing to the latest cash infusion, but the chief investor this time is Norwest Venture Partners of Palo Alto, Calif.

The Echo Nest is the type of company that epitomizes the Massachusetts tech sector, said Rodriguez. It’s taken on a tough computer engineering problem — building the most comprehensive and searchable database of music information — and is providing a back-end solution for better-known customers.

“It’s very hard to build one of these back-end businesses over night,” said Rodriguez.

And with millions of choices on the Web, he said, it’s simply tough for consumers to find what they want.

For The Echo Nest, data can provide the answer. Lots of data. It has broken down information about 30 million songs and 2.5 million recording artists to build its music-recommendation platform with more than 5 billion data points. It has categorized everything from the beat of the song to what reviewers are saying about a particular singer.

“If it’s recorded, and exists anywhere on the Internet, chances are that we know about it,” said Jim Lucchese, chief executive officer of The Echo Nest.

The value of that kind of extensive database is that it helps provide a smart guide as people increasingly use the Internet as their radio, said Alan McGlade, managing director of Digital Entertainment Ventures, a New York investment firm that focuses on media and entertainment companies.

“If you go back 20 years, people had a stack of albums and tapes. Now you turn on your computer or phone and you literally have access to tens of millions of tracks, and in order to use that you have to have some sort of curation,” said McGlade.

The ability to listen instantly to virtually any type of music also makes streaming attractive to music fans, said Ted Cohen, managing partner of TAG Strategic, a digital entertainment consulting firm in Los Angeles.

“The promise of streaming services is to get music in front of me that I didn’t know I wanted to hear, and I say, ‘Wow, this is perfect,’” he said. “The access is replacing ownership.”

For music streaming services such as Spotify, which charge users a fee for access to its premium service, The Echo Nest helps personalize the music subscribers hear through their smartphones or home computers.

More than 350 music applications use the company’s platform, and it is being implemented for more than recommendations. For instance, a smartphone app called Cadence uses The Echo Nest technology to deliver music to users based on the cadence of their jog. MTV’s Music Meter uses the company’s technology to measure the interest on the Internet about various new music acts.

But streaming is what is driving The Echo Nest’s growth. Last year, more than 20.5 billion songs were played through streaming services, according to the media tracker Nielsen Co. During the same period, it reported that consumers purchased 1.27 billion digital songs.

With the latest investment, The Echo Nest’s CEO Lucchese said, it plans to hire more sales people into the engineering-heavy company, and expand overseas. The company currently has 45 employees.

“We bet the entire business on the fact that every music fan will be accessing nearly unlimited content through Web applications,” he said. “Those applications need to understand a universe of over 30 million songs that is growing every day.”

Michael B. Farrell can be reached at michael.farrell@globe.com.
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