Warner Music, the world’s third-largest record label, has acquired Sodatone, a machine learning start-up, in a bid to use data to spot the next Ed Sheeran.

Sodatone, founded in Toronto, tracks streaming, touring and social media data to find artists who resonate with listeners. As more people stream entertainment online, music, film and television executives are hunting for proprietary data to predict what will be a hit with audiences.

The deal is the latest move by Max Lousada, who was promoted to the top creative job at Warner last year. Under his watch Warner Music has grown its market share among the “big three” music labels, helped by the success of acts like Cardi B and Lil Uzi Vert as hip-hop has dominated digital music consumption.

Sodatone’s technology will “help differentiate us in the search for the superstars of tomorrow”, says Mr Lousada, who previously ran Warner’s UK business and has been credited with developing the career of Ed Sheeran.

The companies did not disclose financial terms. Warner Music, like its peers, has seen revenues mushroom in the past few years as services like Spotify grew. The company made $3.6bn in sales last year, a 10 per cent year-over-year rise.

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