B Story

Expansion plans for iTunes Radio getting clearer

Wednesday, October 9, 2013 - 10:45am

Two days ago we noted that iTunes Radio would probably expand its (currently U.S.-only) listening service to Canada, based on a viral spotting of a job listing. Now, Bloomberg reports on discussions with unnamed sources which clarify Apple’s roadmap in early 2014.

According to those talks, Canada is indeed on the map, along with the U.K. Those two territories are important because Pandora, generally considered to be Apple’s target competitor, does not do business in either of those countries. Pandora has overseas music licensing rights in Australia and New Zealand, where it serves music but not yet advertisements, according to RAIN’s conversation with Steve Kritzman, Pandora’s SVP of sales.

Bloomberg reports that Apple is also pushing iTunes Radio into those two markets next year. When it comes to geographic expansion generally, Apple has an advantage over Pandora inasmuch as it negotiates for content rights directly with content owners, while Pandora relies on statutory licenses which vary from country to country.

Apple’s reach into Canada and the U.K., if it plays out as predicted, would execute a triple strategy:

  • Expand audience: success in the Internet radio business is based partly on scale;
  • Grab virgin listeners: while Apple has a steep hill to climb against Pandora in the U.S., where over 72-million people are “active listeners” to Pandora, no such relative positioning exists in Canada and the U.K. In Canada especially, Internet radio users are hungry for choice;
  • Bolster existing businesses: Apple is rolling out the same imperialistic model as it did with its iTunes download business. Furthermore, Apple isn’t primarily in the music business at all -- it is a hardware vendor in the walled-garden ecosystem trade. Its platform services, like streaming music, are intended to retain iPhone and iPad users.

In this context, Pandora clings hard to its hard-earned advantages: the quality of its music selection engine, the loyalty of its active users, and its first-mover position in auto distribution.

Rhapsody launches new radio features, contributes to conformity

Tuesday, October 8, 2013 - 7:10am

Rhapsody, one of the oldest listening platforms, a subscription-only pureplay, and lately a beleaguered business wracked with internal changes, has brought new features to its Radio product. “Radio” in this context means playlists. Until now, Rhapsody has offered a suite of house-curated genre stations, but no artist-seeded or song-seeded stations in the Spotify and Pandora style.

Customized radio is increasingly desired by users who like to lean in a bit, by choosing a band or single track, then lean back and enjoy a stream of songs related to the band or track. Selections are refined by whatever the service knows about the user’s taste. That interactive model usually includes thumbs-up and thumbs-down arrows, the ability to skip forward, and an option to add any track to a collection of favorites.

It’s a good model, satisfying to use, accommodating of different listening postures, and conducive to music discovery. Rhapsody is late to the game, inasmuch as Pandora, iTunes Radio, Spotify, Rdio, and Google All Access feature the same “radio”-style feature set. This week’s enhancement comes one year after Rhapsody partnered with The Echo Nest, a leading provider of music recommendation technology to listening platforms.

Rhapsody’s new product includes a feature increasingly seen in “radio” setting: a Variety slider that determines how far afield the artist station is allowed to venture from the artist characteristics. iTunes Radio has something similar. It is a calibrating feature that reflects how adventurous the user is feeling.

In our listening tests of Rhapsody’s new Radio, using an account with extensive Rhapsody history, throwing the slider to the far right (more variety) widened the scope of listening noticeably, but not radically. In a blues-rock station fashioned after Eric Gales, the greatest variety setting brought in a harder rock edge. One terrific aspect of the Variety slider is the list of five upcoming tracks. You can jump ahead to any one of them. Moving the slider refreshes the list in real time, giving you an idea of what’s in store at any variety level.

While Rhapsody's new package is a valuable service enhancement, there is a depressing degree of conformity solidifying in this space like drying cement. Artist-based, dynamically created, radio-style playlists all seem to operate in the same way, distinguished only by small usability details. Product development is lacking innovation. Rdio recently launched its “Stations” utility, achieving product parity with Spotify. Slacker introduced “My Vibe” stations, nearly cloning Songza’s “Life Moment” listening scheme. iTunes Radio launched in an overt imitation of Pandora’s successful Internet radio model.

Everybody is reaching parity with everyone else. User choice is based on either interface design, music selection quality, or habit. Pandora is one service with a unique back end, the result of years of R&D into the characteristics of music and the signifiers of music taste. In all cases, including Pandora, quality of music selection is improved by sticking with one system and building up a history of liking, skipping, and saving tracks. In a field marked by elusive profitability, the homogeneity of interactive listening sets the stage for future consolidation.

For now, the venerable Rhapsody, which started in 2000, has joined the pack with a standard feature set for artist-based stations -- it is well implemented for the most part, and sounds good.

Earbits Radio pays artists in new ways

Monday, October 7, 2013 - 10:15am

Earbits, an indie-music Internet radio platform, has operated since late 2011 on the web and in Android mobile devices. Now it has launched its first Apple iOS app, refreshing interest in its unique artist-reward system.

Promoting itself as “Independent radio with no commercials,” earbits removes money from its relationship with users, while also paying its catalog artists with social currency such as newsletter signups, song tweets, and Facebook shares.

Earbits offers typical genre-based, lean-back listening with a few hundred house channels. There is no artist-seeded functionality as in Pandora or iTunes Radio. You can skip tracks, backward and forward. The stream is completely uninterrupted. On-demand listening is available throughout the catalog, in exchange for accumulating points for socially supporting artists. (More on that in a minute.)

The music-discovery value of Earbits is based on the curated indie-artist catalog, which is fractional by iTunes Radio standards -- somewhere north of 100,000 tracks from 10,000 artists represented by 500-plus labels. In contrast, iTunes Radio has its long arms around 30-million tracks, and Pandora’s slow-growing music genome provides over a million. But the tiny Earbits pool can be startlingly refreshing when nearly every track is a new discovery, which is RAIN’s experience.

Earbits is partly a musician marketing service. All interactive music platforms sing that song to some extent, with a chorus that repeats, “When this gets bigger, you’ll get some real money.” In a low-cost music market often criticized by creators for its grain-of-sand royalty payouts, the promise of a grander scale can seem like a receding mirage to artists and bands trying to monetize their recordings. In that context, and in a marketing realm that exists mainly online, the very concept of currency is subject to reinvention.

Earbits reinvents “payment” as social actions that directly support a closer relationship between fan and band. The point of Earbits, from the artist perspective, is fan acquisition, not financial gain. Accordingly, the Earbits app has built-in artist newsletter sign-ups, Facebook “I’m listening to” sharing, and Twitter following. The specific range of actions is configurable by the band.

On the user end, completing an artist-support action bestows Earbits currency called Groovies. (The name is rather retro-hippie in our view.) You start with 500 groovies for installing the app (or launching it in a desktop browser) and signing in with Facebook. Auto-sharing is specifically avoided (this ain’t Spotify), but available on every track played. Sign up for the band newsletter? Get 50 Groovies. Share the track on Facebook for 100 Groovies.

For the user, Groovies enable on-demand listening, at 10 G’s per track. Users can feel good about streaming a band’s latest album, because they paid for the access by virally promoting the artist. Earbits promises expanded Groovies functionality in the future, as a key to unlock app features.

Earbits’ PR framing of the Groovies system is not unlike that of the big players in ambition and self-importance: “Groovies are the currency that’s going to change the way people access and pay for music, and it’s going to create massive, sustainable careers for thousands of musicians.” At its current scale, Earbits is singing its own refrain of “When this gets bigger…” In the meantime, the listening is fresh, the quality high, the app unique, and the artist proposition is tuned to marketing reality in the digital era.

RAIN Weekend Perspective

Friday, 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.

 

USA TouchPoints survey indicates AM/FM’s time-spent

Thursday, October 3, 2013 - 1:05pm

Inside Radio reported new diary-based research indicating that AM/FM radio occupies at least two-thirds of audio minutes heard across generational divides. The study is branded by USA TouchPoints, a metered-behavior service launched in 2011 under the wing of the Media Behavior Institute (MBI).

The USA TouchPoints study could be framed as a counterpoint to the recently released Edison Research package, “The New MainStream.” The Edison survey focused on reach, revealing a data set in which 53 percent of online Americans listen to Internet radio to some extent. The USA TouchPoints focus is time spent, making two main assertions. First, that AM/FM represents about two-thirds of consumed audio minutes, while “Music Streaming Service” receives five to six percent of listening minutes. Second, that AM/FM occupies 23 percent of user engagement with all measured mediums. (The Internet as a whole got 18 percent, and television 57 percent.)

USA TouchPoints owns, or owned, mobile diary software derived in 2010 from the IPA TouchPoint study in the U.K. The measuring mandate extends beyond radio to the media landscape generally, intending to track consumer engagement with TV, radio, Internet, magazines and newspapers. USA TouchPoint’s original user panel was sized at 1,000 testers, each using an iPhone diary app. User effort was considerable, requiring each panelist to track location, social setting, and life activity along with specific media consumption, an average of 15 times a day for at least seven days, according to this documentation.

NOTE: According to the Media Behavior Institute’s website, the MBI discontinued operation in July of this year, with USA TouchPoints to follow. A brief notice states: “Unfortunately, the Media Behavior Institute will cease operations on July 31, 2013. Despite a growing client list, industry adoption of USA TouchPoints has not been sufficient and as a result, plans are underway to wind down the company.” Phone queries from RAIN have not been returned.

 

The key findings of this study comport pretty closely with what others have found — e.g., the split of consumers' music/audio listening time is about 80% radio (all forms) and 20% personal music collections, TV gets about twice as much usage as radio, and so forth.

Internet radio's share of total radio listening in this study seems to be 7.5% — i.e, 6% of radio's 80% of audio usage. This seems a bit lower than other studies suggest — especially among younger demos — which could be for one of two reasons:

(1) The iPhone-based diary was apparently hierarchical: When reporting what one was doing at the moment, it seems that first one had to pick "Radio" or "Internet Entertainment," then one picked either a radio format (e.g., country) or an streaming provider. It's possible that young people who consider Pandora, for example, to be "radio" would have gone down the former path, and if so their listening could have been counted in the wrong bucket.

(2) In both today's "Inside Radio" story and the firm's 22-page PDF that describes its methodology, we couldn't find the date the study was conducted. If the survey tracking was conducted more than a year ago, then the numbers would seem to be about right. --KH

The diminutive power of the new Spotify Follow button

Wednesday, October 2, 2013 - 12:45pm

Spotify has long recognized that social, in its many dimensions, is a key differentiator for the music service. Spotify’s extensive (some say intrusive) sharing features set it apart not only from competing listening platforms, but represent a “killer app” that distinguishes interactive listening from traditional broadcast with which it broadly competes. At the same time, social is sticky, conduces users to build identities within Spotify, and ties them into a community matrix that intersects their larger social graphs.

On that last point, Spotify has launched an at-large Follow button, extending Spotify user profiles outside of Spotify boundaries, much as Facebook, Twitter, and other social services do. The button is beautifully productized, instantly accomplishing the follow action when the user is logged into Spotify, without popups of further authentication.

The little Spotify Follow button has the power to reverse Spotify’s usage equation -- from a listening service with social features to a community platform that concentrates on social listening. Perhaps the greatest benefit to Spotify is simple brand extension. As Spotify Follow buttons begin to appear all over the web (which is the prediction here), they both increase engagement of existing users and draw in new ones. As ripples from the iTunes Radio launch continue to wash through the waters of Internet radio, all stripes of competition must find ways to retain and grow audience.

It’s easy to imagine that the Follow button will be eagerly adopted. First, by devoted Spotify users seeking to build their follower base and increase social influence as music curators. The Spotify follower count could become a prestige marker similar to a person’s Twitter flock. Second, the Follow button could afford musicians, bands, and labels a new way of attracting attention to their profiles on Spotify. To whatever extent musicians suffer from the high signal-to-noise ration in Spotify, the Follow button gives them a way to cut through.

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