10/10/13: Anticipation Builds for Beats Music

Brad Hill
October 10, 2013 - 11:00am

Every few days rumors are published about the impending launch of Beats Music. We know it will be soon. We've heard that there will be a subscription component -- possibly all-subscription, like Rhapsody and Google All Access.

We don’t know whether Beats Music will be any good. Well, it’ll be good. We don’t know whether it will be a standout in the crowded field Beats is entering. The service will launch within months, and The Next Web reports that The Echo Nest is involved in creating the recommendation engine. Echo Nest is the tech company that white-labels Internet radio curation for Rhapsody, Spotify, and other leading brands.

Luke Wood, Beats Music president, has promised an acutely personalized and expertly curated listening environment. All the lean-forward platforms promise that, and honestly, delivery on that promise is pretty good. Pandora has some extra mojo for many listeners, but iTunes Radio, Spotify, Rdio -- they all produce a customized Internet radio experience across a huge catalog that was unthinkable not too many years ago

So the question isn’t when Beats will come to market, or whether it will be personalized. The question is whether the product development truly contains innovations that will set Beats apart from the pack. Because inducing users to stick around after the trial period is getting increasingly difficult.

Brad Hill
October 10, 2013 - 11:00am

In an increasingly crowded field of general streaming platforms hosting immense catalogs of music to serve the long tail of listening demand, two trends are emerging.

First, services whose relationship to their catalog artists is keyed to non-financial values. For example, Earbits (whose iOS launch is covered in RAIN here) compensates its participating musicians with more intensive promotional tools than afforded by the big tech-music companies.

Second, services that furnish a function more specific than simple jukeboxing. DeliRadio is making splashes in this arena, by connecting its music selections to local appearances by the musicians. As such, it is difficult to decide whether it’s an artist-promotion service, or a user listening platform -- and that is a refreshing balance.

DeliRadio is in the news because the 23-person company received its first major venture funding since its founding in January, 2011 -- 9.35-million dollars kicked in by a small group of firms.

The DeliRadio experience is filtered primarily by the user’s location, and refined by genre and time period. Listening selections are shaped around artists scheduled to appear in local venues during the the near future. Locations with few performance spots will show slim pickings. Conversely, changing location to a hotbed of music activity, like the East Village of New York (try it: zip code 10003), pops up a wealth of listening and music discovery.

Acting as a reverse lookup for what’s going on tonight, or over the weekend, solves the typical problem of local outlet listings, when you don’t know what the listed bands sound like, and must rummage in YouTube, Spotify, or Bandcamp to piece together a night of musical bar-hopping. DeliRadio makes concert planning a music-first experience.

DeliRadio also works as a straight-ahead listening service, and encourages that user behavior with favoriting and playlisting. Many artists supply entire albums for free streaming, providing a more concentrated artist-discovery experience than Pandora or iTunes Radio.

Spotify has recently added concert listings to its app, so the investment in DeliRadio is well-timed to push its advantage as a dedicated concert-info solution.

Brad Hill
October 10, 2013 - 11:00am

A venerable Internet radio station, Radio Paradise (www.radioparadise.com) is a perfect example of trusted human curation in the independent music streaming space. Operated as a cottage business since 2000 by Bill and Rebecca Goldsmith, the Radio Paradise studio is located in their home, in -- where else? -- Paradise, California. The Goldsmith’s have built a listener-supported business on a bedrock value of great musical taste.

The station’s ad-free playlist is not genre-limited, featuring instead a fairly adventurous, but never inaccessible blend of rock, world, and electronic tracks. The overall musical tenor is on the gentle side, reminiscent of alt-Starbucks in its variety and non-aggression. (But far more pleasing in our opinion.) There is a community element, as listeners can leave discussion comments about current and recently played songs. Streams are available in several formats and bit rates.

Radio Paradise offers a mobile app for iOS and Android, but web-desktop listening is a better experience, with a more complete social scene and, in our experience, more reliable streaming. Radio Paradise is an outstanding soundtrack for work or casual daily activities, and -- best of all -- recommending it to friends bestows music-taste cred.

Brad Hill
October 10, 2013 - 11:00am

South of the border: After a recent expansion of its streaming and cloud-serving music service to a half dozen European countries earlier this month (covered in RAIN here), the irregularly named Google Play Music All Access is now accessible in Mexico. Farther north, Canadians are still waiting for both Google and Apple to bring the warmth of streaming music to their chilly clime.

Student perk: A little late for back-to-school shopping, Rdio is offering half-off its subscription streaming plan to verified college students, lowering the monthly rate to $4.99. Will students dish out to avoid ads? That remains to be known. In the meantime, see Audio4cast’s broader picture of Rdio’s movements in the Internet radio space. 

Burning indictment: Rocco Pendola, a stock analyst at TheStreet.com, left all forbearance behind in his assessment of Slacker’s newly launched “My Vibe” feature. The heading of Pendola’s review sears into the page: “Apple Should Buy Slacker and Burn It to the Ground.” You might recall our interpretation of Slacker’s new product, which we said flagrantly imitated Songza’s “Life Moments” programming style. Apparently the derivative nature of Slacker’s product development gave Pendola some sleepless nights: “Slacker gives Internet radio a bad name,” he raves. 

Brad Hill
October 10, 2013 - 11:00am

What’s your pleasure, a dashboard that allows you to plug in your personal devices with their data plans for streaming music on the road? Or a self-contained connected dash with its own Internet connectivity and embedded apps? In the first case, you’re bringing your own entertainment dashboard into the car, on your smartphone. In the second case, you can leave your gear at home and still enjoy your playlists while driving.

Fierce Wireless reports that Audi, which is developing its in-car tech along the lines of the second scenario, might announce a replaceable SIM-card slot for its A3 model, at the Consumer Electronics Show next January. Some current Audi models have an SIM card in the dash now, with a factory-installed SIM as the only card which will work with the onboard telematics. The data plan is provided by T-Mobile.

The problem with a one-SIM solution is that the connectivity solution built into the card might become obsolete -- for example, when cell phone networks upgrade their bandwidth capability. Car companies might be glad if trade-in decisions were synched with the development cycles of telecom companies, but that doesn’t necessarily fly with consumers.

Making the card switchable enables drivers to bring their own data plans into the car, to power the car’s connected dash systems. It’s a hybrid of the two scenarios above -- leave your devices at home, bring your own Internet into the vehicle with a SIM, and enjoy the dashboard’s integrated apps and services. 

Brad Hill
October 10, 2013 - 11:00am

The cost of content is a shared issue in terrestrial, webcast, and pureplay balance sheets. Music licensing costs come as a patchwork of statutory and negotiated agreements. Stakeholders on the music content side include composers, performers, and labels.

Three organizations represent licensing rights and costs for composers and songwriters: ASCAP, BMI, and SESAC. SESAC is different from the others: It is smaller, and accepts creators through an application process rather than open admission to its portfolio. SESAC competes with ASCAP and BMI for clients, and negotiates licensing rates on behalf of its composers and songwriters independently.

Now meet the Radio Music License Committee. The RMLC sits at the other end of the bargaining table, representing radio stations’ right to use music in their terrestrial broadcasts and digital streams. The RMLS negotiates content costs with all three so-called PROs (Performing Rights Organizations). Radio stations may step outside of the RMLC’s purview and negotiate separately with the PROs, but most do not.

Here is one more difference between SESAC and ASCAP or BMI, which relates to a legal action happening this week -- action which could determine whether certain licensing costs rise for all radio, broadcast and Internet. ASCAP and BMI rate-setting processes are governed by a “consent decree,” an antitrust mechanism put in place over 50 years ago. The consent decree enables the U.S. government to arbiter licensing rates when negotiations fail, through an adjudicating committee called the Rate Court.

SESAC, because of its relatively small size, was not (and is not) included in the antitrust consent decree. This independence gives SESAC unique potential leverage in making money for its clients by levying high licensing rates on the radio industry. The most recent multi-year agreements between radio and ASCAP/BMI effected a reduction in licensing costs through 2016, according to David Oxenford’s Broadcast Law Blog. SESAC does not receive downward pressure from any outside arbitrating power.

The Radio Music License Committee filed suit against SESAC one year ago, seeking antitrust remedies applied to SESAC. The case has neither been dismissed nor thrown out, and has not progressed. Now, SESAC is due to deliver a new five-year licensing rate plan to the radio industry. RMLC has filed an injunction to delay the (presumed) rate increase, and negotiations of it, until the lawsuit is resolved. Inside Radio quotes the RMLC’s hyperbolic appeal to the court: “SESAC’s planned five-year rate hike would devastate the industry.”