5/15/13: Google unveils "radio without rules" music streaming service

Paul Maloney
May 15, 2013 - 11:55am

As expected, Google formally announced its new online music subscription service, Google Play Music All Access today at its Google I/O developer conference.

The company is touting the service as "radio without rules," according to The Verge. It reports the All Access service "allows users to create radio stations from particular artists — providing comparable functionality without any of the limitations," but went into no further detail. One might assume the "functionality" is "comparable" to Pandora and other such services, but "without any of the limitations" of the statutory webcast license, which prohibits on-demand song plays, going backwards in a stream to re-hear a song, etc. (We delved a little further into these matters yesterday here.) 

By and large, it's music subscription of the Spotify/Rdio sort: $9.99/month unlimited on-demand access and playlist features, for computers and Android devices. Listeners can access both "local" music (which they have stored on their computer or handheld) as well as Google's streaming-available collection, as a single "master library." The service includes a "recommendation engine" to help listeners discover new music based on their preferences. Google is offering a 30-day free trial, and if you sign up by the end of June, it's just $7.99/month.

Read more from The Verge here.

Paul Maloney
May 15, 2013 - 11:55am

NPD Group SVP/Industry Analysis Russ Crupnick sees the music industry headed towards another cliff -- and thinks streaming audio and capturing the favor of the 100 million "casual music fans" may be the keys to averting it. Crupnick presented recent research findings at RAIN Summit West last month in Las Vegas. 

"We desperately need streaming radio to succeed," Crupnick told attendees. "We need to get the lawyers, guns, and money out of the way, and start having a better understanding of how to get consumers on to the next model."

Back in the '90s, 90% of adult Americans regularly bought CDs. NPD research shows it's now 35%, and that's not being replaced by paid downloads. Just about 23% of people have purchased a music download in the last year, which means 3 of 4 haven't! And, as much as CD purchasing has dwindled, it's still more prevalent than downloading! And the amount of time people spend listening to these legacy formats (CDs, MP3 files, and even radio a bit) is down too.

Here's the bright spot: online radio usage is up 6% among young people (see the chart) -- and up 23% among baby boomers -- in the past year. Online radio is even the "way number-one" reason people are quitting P2P downloading: "It's just so much easier to use a streaming service," Crupnick paraphrased.

And, Crupnick adds, "these are really valuable customers" to the music industry. While the average American spends $24 on music in a year, Pandora listeners spend $40, and Spotify users $52. Streaming audio listeners also strongly out-index average Americans buying concert tickets.

But the real opportunity for streaming radio to succeed, and the music industry to avoid another cliff, Crupnick argues, is not going after the "core" music fans (the 30% of the population that accounts for 80% of the money spent on music). Radio and streaming services are already "serving them really well." The opportunity lies with attracting the other 70% of people -- the "casual" music fan.

Consider: Nearly all "core" music fans listen to AM/FM, and 77% listen to non-subscription online radio, according to NPD figures. And while a good majority of casual fans also listen to music on AM/FM (74%), just 25% listen to free online radio. That's the 100 million people market opportunity. That's the potential audience gain for Internet radio, if it can reach beyond the hard core music fans and get to everyone else who listens to AM/FM.

And to do that, Crupnick advises, it's necessary to understand the mentality of that casual listener. He stresses that the research shows these people aren't at all focused on those things broadcasters and webcasters obssess over. NPD found, as he put it, "98% of people don't know what 'an Rdio' or MOG is!" Most casual listeners don't really have any interest at all in mobile apps (though he suggested an Apple streaming radio entrance might change the game).

The lack of interest in mobile apps notwithstanding, Crupnick says "this battle is going to be won in the car," as that's where the vast majority of casual music fans' listening takes place.

And casual listeners aren't interested in subscribing for music either. "We've gotta figure out a way to help these services thrive outside of subscription," he concluded. "We can work together, labels, artists, services, to grow the pie."

RAIN Summit West was April 7 in Las Vegas. You can listen to audio from Crupnick's presentation, and all the RAIN Summit West content, on our website. Look for the SoundCloud links in the right-hand margin of kurthanson.com.

Our next event is RAIN Summit Europe, May 23 at the Hotel Bloom in Brussels. Limited space is still available. Information and registration links are available on the RAIN Summit Europe website here.

Paul Maloney
May 15, 2013 - 11:55am

Digital Music News editor Paul Resnikoff asks, "Do consumers really care about having every last song at their fingertips, millions of songs deep?"

While streaming music services like Spotify, Rdio, and Rhapsody seem to think so, as they tout library size as a major feature, most listeners don't care, concludes DMN.

"This matters far less than the industry thinks."

SiriusXM has over 24 million subscribers, dwarfing any other music subscription service. But "Sirius has selection, and even Pandora-like stations. But you're not picking the songs, playlisting, or otherwise DJing with millions of deep tracks. You're driving, working, reading, sleeping, or doing something else, while someone else is curating an ultimately limited selection."

Another example: Pandora, with a far more limited library and lacking the on-demand component, it's topped 200 million registered users.

"Many consumers will say they want everything, but actually don't," Resinkoff wrote. "And all you have to do is look at virtually any chart from any 'comprehensive' streaming service. Because even with the widest selection imaginable, the world's chosen playlist is amazingly thin."

Read this entire article from Digital Music News here.

Paul Maloney
May 15, 2013 - 11:55am

Jerry Del Colliano in his Inside Music Media suggests Google is "looking to deliver a deathblow to music radio" with it to-be-announced-today streaming music service.

But Google's will be a subscription service. Sources say there won't even be a free option. And that's radio's opportunity, Del Colliano suggests.

Being "the curator of music discovery for free." Radio can't compete with the customization and on-demand features online services from well-funded companies can offer. But radio can continue to be the "music authority for popular genres."

But, should these services successfully pull away radio listeners, as Colliano says is their intent, music subscription could become the norm for discovery for new generations of fans.

"Damage radio and a streaming subscription becomes as essential to a Millennial as a subscription to Netflix or Hulu," he warns. "It's about being the Netflix for music."

Subscribe to Inside Music Media here.

Paul Maloney
May 15, 2013 - 11:55am

FROM TODAY'S EARLY EDITION: First broken by The Verge (here), now both The New York Times (here) and The Wall Street Journal (here) are also reporting that Google is expected to announce a subscription streaming music service later today at Google I/O, the company's annual developers conference.

The company reportedly has finalized licensing deals with all three major record label groups. The new service will reportedly resemble services like Spotify more than traditional webcast services (like Pandora -- which presumably will be the model for Apple's "iRadio" service that's expected).

The new Google streaming service will reportedly not include a free version. The fee isn't known at this point, but is expected to be similar to that of Spotify and other services like Rhapsody and Rdio, $10 a month.

The new service is actually one of two music services Google reportedly has in the works. Google-owned YouTube is also said to be developing a music service, and negotiations with labels continuing.