B Story

Spotify partners with Vodafone Ireland, another telecom-music hookup

Wednesday, November 20, 2013 - 10:50am

Spotify has partnered with Vodafone Ireland, one of many country-specific branches of the international telecom giant. The deal is another instance of a music service joining a telecom carrier in a synergy that benefits both companies. We are certain it is a trend that will accelerate in 2014.

Vodafone’s global customer base surpasses 400-million, and its Irish subscriber base is 2.35-million users. Billboard notes that Vodafone is committing a $2-million marketing campaign to the alliance. Spotify is now built into some of Vodafone Ireland’s high-data plans.

Financial details are not public, but the advantage to Spotify is clear-cut. Vodafone (and any telecom company) owns the billing relationship, usage contract, and device. Putting a music service into that ecosystem is powerful in the same way as Apple bundling iTunes Radio into a platform that contains millions of user credit cards. It moves the music service upstream from the device into the pipe which feeds content to the device -- a more unassailable position for Spotify.

For Vodafone, Spotify becomes a key brand attraction, making their smartphones instantly-enabled mobile music machines. Like any ecosystem, telecom companies strategize around retention. Keeping mobile users musically happy is increasingly crucial.

Users win too, especially existing Spotify subscribers. They can cancel their stand-alone subscriptions, possibly save money with the bundled Vodafone version, and simplify their media payments.

In October, Rhapsody joined forces with Telefonica, another international behemoth, in what could be an antidote to that service’s daunting U.S. competitive problems. Deezer, the Paris-based music subscription platform that operates throughout Europe and other continents, has used telecom partnering (e.g. Deutsche Telekom) as a strategic pillar, and rumors say that Deezer is searching for a cell partner to substantiate a U.S. launch in the next few months.

Pandora’s Proprietary Audience Segments

Tuesday, November 19, 2013 - 12:00pm

This article by guest contributor Jennifer Lane was first published in Audio4cast

With more than 200 million registered users, Pandora’s collection of user data is substantial. Now they are beginning to use that data to create marketable audience segments that advertisers can use to target their campaigns.

The first of these “proprietary audience segments” created by Pandora are Hispanic and Spanish speaking users of the service. To create these segments, Pandora cross referenced their registered users with zip codes that have a high population of Hispanic and Spanish speaking listeners, using publicly available census data. It’s still inference based targeting, meaning that the buyer has to agree to make assumptions about the consumer based on where they live, but it’s an improvement over cookie-based technology, which makes inference based assumptions as well – usually assuming that someone visiting a certain site matches a certain set of established criteria.

Critics will argue that users often give false registration data as well, and that is certainly a factor, but probably not a significant deterrent for buyers who are looking for any improved ways of reaching more of the people they want to reach, fewer of those they don’t.

Studies have shown that listeners are quite tolerant of targeted ads online, especially when they are targeted to offer products that the listener might find useful.

In fact, Pandora’s capable of slicing up their audience by market, zip code, age or gender, or the kind of music they listen to, and has been doing that for a long time. These new customer segments are available in media buying software that makes it very simple for agencies to identify, price and purchase. It’s a smart way to market their large audience to advertisers and showcase their targeting capabilities. This video features Heidi Browning, Pandora SVP of strategic solutions, discussing the streaming service’s targeting capabilities. 

Website Spotlight: NASH FM

Monday, November 18, 2013 - 11:55am

There are two main reasons for a listener to visit a radio station website:

  1. Listen to the station when a radio is not at hand, typically at work; 
  2. Engage with extra content that is related to the station’s category and personality.

From the station’s perspective, an immersive website expands ad inventory and revenue. In the longer term, keeping users involved with the station brand is vital to withstand competition from other Internet-delivered listening options.

NASH FM is a country-music broadcast cluster operating in several markets, extending onto the web with a unified website template that accomplishes basic goals more cleanly and attractively than many others. NASH FM’s site design is better organized and more pleasing to the eye than some radio group templates that are applied to dozens or hundreds of stations.

Basic listening is nicely done. It might seem surprising, but even the essential Play button is executed poorly on some station websites, sometimes throwing the user entirely off the site onto a different platform (such as iHeartMusic). That is a self-limiting error that discourages the user from engaging more deeply with the site. Another usability mistake is failing to open a pop-up control panel, so the music shuts off if the user moves to a different page of the site.

NASH FM sensibly avoids these disagreeable conflicts with a pop-up that includes the recent playlist. A short video ad precedes the radio stream. Our testing revealed glitch-free streaming of that vid -- avoiding a downfall at some station sites that start you off with teeth-rattling video stutters.

NASH FM provides the usual menu of news, weather, and traffic. We are skeptical of value here, obligatory as those sections might be. People have apps for all that. But it doesn’t hurt the experience.

The key question with radio websites is whether they furnish added value that would bring a fan into the experience even if not listening to the on-air stream. NASH FM shines in that department, with station-owned video interviews and concert footage, plus music videos culled from elsewhere.

One content category we look for in a station site is DJ blogging, or some extension of the DJ personality. NASH FM has a blog section in its menu, but it is mostly unused. Granted, the main DJ-listener relationship is concentrated in the air shift, when the DJ is behind the mic. But we long to see blog posts, or DJ tweet streams. Keeping the user attached to station personalities is another dimension of lock-in.

Bonus: Some (but not all) of the NASH FM stations have dedicated mobile apps. In some ways, they are better than the desktop websites -- for example, displaying most popular played tracks, with audio and video samples built in. As such, they serve as music discovery environments for country music.

Streaming continues to erode “album release” concept

Friday, November 15, 2013 - 12:05pm

We noticed the new Hunger Games soundtrack album as a streaming playlist in iTunes Radio, which supported our repeated observation that “album release” no longer has much meaning.

In the years when radio was the only mass-market music discovery venue, and the only hitmaker, pre-release singles effectively promoted albums, sometimes weeks before album availability. Streaming puts a new slant on album promotion. We noted that in the cases of Justin Timberlake and Eminem, iTunes Radio streaming previews effectively released the albums in a viable listening format before the CD and album download were available. In both cases, those albums shot to the top spot in Apple’s iTunes album-sales chart. More correlation (Billboard) of the strategy’s effectiveness lies in the fact that the Timberlake product headlined the best album sales week of the year, and Eminem’s spearheaded the second-best week.

Coincidentally, as we were listening to a Songza playlist, a track from the Hunger Games album popped in. That opened our eyes to the fact that the iTunes Radio promo is not an exclusive deal. And Rolling Stone notes that some of the artists included in the album compilation have (pre)-released tracks or snippets. It’s natural that a multi-artist album would demonstrate a more ragged introduction than one band with verticalized management. But the overall point is that Internet radio, plus other leakage points, make album release dates increasingly meaningless lines in the sand when the tide is rolling in. (We love a good metaphor.) 

At this writing, the Hunger Games album is perched at the top of the iTunes pre-order chart, and is placed at #22 in the total album-sales list. The album’s formal release date (which, again, is becoming more a marketing slogan than an actual availability milestone) is next Tuesday.

Deezer reportedly headed to the U.S.

Thursday, November 14, 2013 - 1:10pm

If you visit the Deezer website (www.deezer.com) on a computer in the U.S., you see this notice: “Deezer’s music services are not yet available in your country.” That will reportedly change soon, as Digital Music News posts that the Paris-based streaming music subscription service will expand to the U.S. in January.

Though blacked out in the U.S., Deezer has rolled out an aggressive global expansion, serving users throughout Europe and in nearly 200 countries altogether. Geographic footprint is one measure of success, and usage footprint is another. On the second point, Deezer recently announced that its paid-subscriber base reached five-million users. 

Deezer has attracted several funding rounds, and is currently capitalized at $149-million

Can Deezer cut through the noise?

Streaming music has become a crowded segment in the last six years. Deezer, which started in 2007, preposterously claims to be “the world’s first music streaming service,” ignoring many pre-existing subscription and Internet-radio outlets, some of which were operating as early as 2001. Historical whoppers aside, the Deezer platform is robust, with 30-million tracks in the library and a strong reputation.

The U.S. market has been slower than parts of Europe to recognize the value of online jukeboxes such as Deezer. Swedish-based Spotify is Deezer’s most head-to-head competitor in non-U.S. territories, and it was Spotify’s U.S. launch in July, 2011 which helped whet American taste for on-demand streaming music. Other music services had been operating in the U.S. before Spotify’s invasion, but Spotify’s ad-supported free listening was the on-ramp to the experience for many uninitiated users. 

Deezer might not make a U.S. splash similar to Spotify’s impact in 2011. It is tough to differentiate in this market. Territorial accessibility is a waning claim to specialness, and the basic features of subscription services (random access to tracks, downloading for offline listening, artist-based stations, personalization via preference tools, social sharing) have become nearly indistinguishable from one platform to the next.

In this light, future business success might depend on distribution avenues that push brands in front of users on unavoidable, often-used screens. Car dashboards represent one such environment, which is why the “connected car” has become such an important and combative arena in the streaming music business.

Another must-own screen is the smartphone. Most music services deploy custom app experiences, but uptake depends on the user’s initiative to download and use them. A more forceful solution is to partner with a telecom company, as Rhapsody has recently done with its major Telefonica deal.

There are two major advantages to telecom distribution of music. First, pre-installation of the app and placement of the brand on the smartphone home screen. Second, the phone company owns a billing relationship with its users, making sign-up to a built-in music service easy and seamless. 

Deezer is executing the telecom tactic already, having partnered with Deutsche Telekom and several others. There is some speculation that Deezer will coast into the U.S. on a telecom backbone (Verizon is mentioned, but not substantiated). Doing so would have less free-market impact than an unaffiliated launch, but might make business sense.

However this plays out, it will be good for U.S. streaming fans to finally break through that “not yet available” Deezer roadblock.

Spotify sued for user playlisting

Wednesday, November 13, 2013 - 12:40pm

In an interesting, possibly unmeritorious case that one lawyer characterizes as a “battle of metaphors,” Ministry of Sound (MoS), a British record label specializing in compilation albums, has brought action against Spotify over user playlisting, a core Spotify function. The playlists at issue are ones that mimic MoS compilations.

According to a report in Time, the label does not license to Spotify, so its albums are not found in the service. But tracks owned by other labels, licensed by Ministry of Sound for its compilations, are in the Spotify library. Accordingly, Spotify users can listen to those tracks and add them to personalized playlists. The problem arises when users replicate MoS album collections as Spotify playlists.

The legal question is unusual, and possibly unprecedented. Is the ordering of an album collection by itself, and separate from branding, artwork, and track licensing, considered intellectual property? The usage displacement would seem to favor MoS’s argument: to whatever extent Spotify replaces album purchases, public access to a playlist identical to the listening experience of an MoS album would seem to impede MoS business interests. But Spotify is on legal footing with both its track licensing and the playlisting function viewed by itself. 

No prediction of how this will play out, but the case will be interesting to follow.

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