10/4/13: Fred Jacobs interview; Downloads down; Muve up; week in review

Brad Hill
October 4, 2013 - 10:30am

Digital single-track sales are down over the first nine months of this year, compared to the same period in 2012. The decline has accelerated quarter-over-quarter, with the July-Aug-Sep period showing a 6-percent skid, according to Billboard. Digital album sales have fared better this year, gaining 2.6% over 2012, although the third quarter showed a similar summertime dip as single-track sales.

Download doldrums match the consumer trend toward Internet radio as an important venue for music discovery and the “access model” of ownership. Recent audience metrics reports from Triton and Pandora indicate that webcasting and Internet radio adoption is gradually and steadily climbing upward. As mobile listening crosses multiple devices, environments, and dayparts, access to cloud-based music jukeboxes takes the place of unit purchases and local storage. 

Apple and Google hedge their bets by operating on both sides of the fence, offering digital albums and tracks for sale, as well as customized listening to enormous catalogs of music. As a third leg of the stool, both services also provide cloud storage of owned music files -- a hybrid of the ownership and access models.

Brad Hill
October 4, 2013 - 10:30am

RAIN’s Weekend Perspective reviews the week's main events, and refreshes your synapses for next week.

The week started with a legislative bang when Rep. Melvin Watt introduced the Free Market Royalty Act in Congress. (Just in time for a general governmental shutdown.) The bill has two main planks: first, to withdraw the terrestrial radio exemption from paying artist and label royalties, and second, to remove the government from its traditional role as arbiter of royalty rates. RAIN interviewed attorney and consultant David Oxenford. Today, Oxenford posts a comprehensive analysis of the bill on his Broadcast Law Blog.

METRICS

On the metrics front, important measurements arrived from Triton Digital and Pandora.

Triton’s Top-20 Web Metrics Ranker for August revealed broad, if incremental, webcast gains across broadcast streams and pureplays measured in the report.

Meanwhile, Pandora (which is included in the Triton report) released its own monthly Audience Metrics report for September, announcing substantial year-over-year gains in active listeners, listening hours, and share of all U.S. radio listening. Small month-over-month gains were reported as well. September was the first month in which Pandora and iTunes Radio operated concurrently, a competition undergoing much scrutiny. The results of that half-month of activity bolsters Pandora’s claim that Apple’s new service does not pose a dangerous threat to Pandora’s audience growth or retention. But, of course, it’s early days.

PARTNERSHIPS:

A few business development scenarios enlivened the week. First, and most significantly, Rdio augmented its service model by introducing free, unlimited Internet radio-style streaming to its mobile apps, which previous allowed only a 14-day trial before asking customers to subscribe for ongoing listening. The new feature, called Stations, is ad-supported, thanks to Cumulus Radio repping Rdio’s inventory as part of the recently completed deal between the two companies. Rdio and Cumulus wasted no time putting their alliance into action. 

Songza linked arms with FourSquare, inviting users of the lean-back streaming service to check in at select FourSquare locations to receive Songza rewards -- including six months of free premium service in some cases.

Clear Channel-owned iHeartRadio moved to flesh out the Talk section of its radio aggregation platform, snagging rights to distribute certain Turner Broadcasting content. The new shows and clips will help balance an already strong ABC presence in iHeart Talk.

 

Brad Hill
October 4, 2013 - 10:30am

The connected car, built with a digital dashboard and Internet-delivered audio, is an increasingly vital touchstone for both broadcast radio and Internet radio. With that in mind, research and consulting firm Jacobs Media is hosting DASH: The Connected Car AudioTainment(™) Conference, scheduled for October 23 and 24 in Detroit, where the company is located. (See the DASH site here; the conference agenda is here.)

DASH is a deep dive -- a day-and-a-half conference devoted to the present and future of infotainment in the car. The event seeks to bring together many sectors which are converging in the space for a comprehensive discussion of how different influencers are shaping the future of car radio.

RAIN spoke with Jacobs Media president Fred Jacobs, to discuss the vision of his DASH conference.

RAIN: How did the DASH conference come to be?

FJ: The idea was to put together a mash-up of constituencies that are critically important to the conversation -- OEMs, tier-1s, advertising agencies in the automotive space, and car dealers. And of course radio people. There are a lot of moving parts. The challenge was to put together a conference that touches on all these different flavors.

To us, it’s simple. When you think about the role the car plays in the overall health and welfare of the radio business, it comes down to two things. First, the lion’s share of listening to broadcast radio takes place behind the wheel. Second, automotive is the largest category of revenue generation for most radio stations. So we thought: Let’s design a conference solely dedicated to the connected car.

Another genesis of this was the Consumer Electronics Show. A few years ago, Alan Mulally of Ford presented one of the keynotes. The automakers are excited about the [connected car] space. At many of [the tech-oriented conferences], radio is MIA. Pandora is there, satellite is there. We felt that radio needed to figure out that this space is critically important, and radio needs to be there.

RAIN: Radio has the most to lose in a big disruption taking place in the car. If radio is behind the curve, what do you think is the future of AM/FM in the car?

FJ: AM/FM is always going to be there. But broadcast radio outlets have to rethink their strategic position. For the most part, radio stations have been in competition with other stations down the dial for ratings and revenue. Part of what DASH is all about is to help open up their points of view to begin to see that they’re competing on a much grander scale.

You might think, ‘We have time.’ I think that would be a mistake. The radio industry needs to engage with the space, we need to get involved, deepen our relationships with the car companies -- they really do represent a large part of our future. We need to engage with them and let them know that broadcast radio always has been, and always needs to be, an important element of what is rolling off these assembly lines. We’re hoping that this event really helps deepen the relationship.

RAIN: In your “Connected Car” Super Session at the Radio Show in Orlando last month, you and Roger Lanctot showed videos of prospective car buyers grappling with the challenge of turning on the radio in digital dashboards. You also predicted that by 2017, all cars would be knob-free. Are those videos a warning to car companies?

FJ: They are. It’s very Wild West out there. The car companies are all moving in different directions. None of these systems talk to each other. The OEMs feel that what they’re developing is the right way for them. It’s every company for itself. They’re all doing extensive research to figure out what the consumer wants, but it’s still pretty embryonic. Those videos really show that.

Of course, they also showed people who hadn’t had any orientation. But there’s some logic there. If we handed somebody an iPhone, who had never seen one before, chances are pretty good that, after playing with it for a couple of minutes, they’d be able to make a phone call or send a text. And that is typically not the case in [the digital dashboard] space. So [the car companies] have a long way to go here.

RAIN: One of the sessions at DASH represents car dealers.

FJ: I’m really excited about the car dealer session. They’re the ones who are charged with training customers to figure out how this works. It’s the local car dealer you go to when you’re having a problem with your system. They’re hiring specialists, they’re doing classes on Saturday -- it really has changed the nature of the dealership.

The other piece is the way car dealers and their ad agencies are looking to buy local media to build their brands. There is change happening at the dealership level. We think it’s important that DASH represent the car dealer.

RAIN: If AM/FM has the most to lose, pureplays have the most to gain.

FJ: Absolutely right. It’s important that they be there. Pandora jumped right in. We’ve got TuneIn and iHeart. I like the idea of bringing in lots of different players and turning them loose. You’re going to meet people and talk to people that you don’t normally see at conferences. At last count we’ve got 45 speakers -- paneling, moderating, keynoting, participating onstage. It’s a 360-degree view of the connected car. Our feeling is that our attendees will return from this conference with a much deeper understanding of what’s going on.

RAIN: What do you hope will be advanced during the DASH conference?

FJ: The goal is to bring these segments together at one conference, let people work together, talk to each other. The auto companies all understand the value of broadcast radio. They don’t need to be convinced that it’s viable. Broadcast radio needs to show that we care, are engaged, and understand the importance of the space.

What we also hope comes out of this conference is a greater realization of what broadcast radio’s true value is, as content providers. When you talk to automotive people about what broadcast brings to the table, they talk about local, they talk about personality, they talk about community. Yet, at times, [radio] has gotten away from those values. When it comes to the connected car, broadcast radio needs to redefine its value proposition, in an environment where there is increased competition, and commit to its unique differentiating elements. That is long overdue. We believe a conference like this can help accelerate that thinking.

I really think that no matter what your place in radio is, there is absolutely going to be something here for you. Personally, I hope that I have an opportunity to catch my breath, sit in the seats, and take some notes!

Brad Hill
October 4, 2013 - 10:30am

Muve Music is an interactive music subscription platform available exclusively to Cricket Wireless phone users on the Android platform. This narrow distribution funnel seems to work well for everyone involved, including users who have made Muve “the most popular on-demand music subscription service,” according to the company’s press release.

Cricket packages Muve with other services in one of its subscriber plans. A paying subscriber to Muve is really a customer of the phone company’s tiered service. As such, Muve’s growth numbers benefit from a bundling strategy that isn’t available to Rhapsody or other stand-alone music subscriptions.

Coincidentally, Muve founder and ex-SVP Jeff Toig left the company a few weeks ago to join SoundCloud as Chief Business Officer.