iRadio

Kelly planning local Net radio in other top markets

Wednesday, April 24, 2013 - 12:35pm

Consultant Tom Kelly (Kelly Music Research) has launched an online radio service called iRadioPhilly, focused on the Philadelphia market and the music he says local broadcasters no longer play.

"In our core business - measuring listeners' reactions to music - we couldn't help but notice some holes in the marketplace," Kelly told the Philadelphia Daily News. "There's no '50s- and '60s-focused terrestrial [broadcast] radio station in Philadelphia, serving the music that was the genesis of '[American] Bandstand.' There's no indie-rock channel. No 24-hour classical station. No 24-hour jazz. Nor a station devoted to vocal standards - the Frank Sinatra, Diana Krall, Michael Buble breed of talents."

The twenty-channel service offers more than just what's missing in local radio (Kelly also has CHR, adult alternative, country, and classic rock channels). And it's hit the ground running with mobile and "set-top box" (Sonos, Roku) apps, a social media presence, even iRadioPhilly merchandise for sale.

And being local goes beyond the music, so iRadioPhilly streams feature the voices of former local on-air talent too (Michael Tearson, Mike Bowe, and Bob Craig). One of the service's twenty channels is Y-Not Radio, the webcast created in 2011 to keep alive the sound of the former Y100 alternative rock station (see more here).

There's also "St. Joseph's University basketball games - and local arts, from high school and community-concert broadcasts to streaming of the big evening shows at the Philadelphia Folk Festival," reports the Daily News.

Kelly says he believes there's a future online for radio that broadcasters think isn't viable on the air. Kelly Music Research has registered "iRadio" domain names for the top 50 markets in the country.

Read more in Philly.com here. "Hat-tip" to Tom Taylor Now for this story.

Industry expert suggests iRadio streaming service will come to protect iTunes download business

Thursday, April 18, 2013 - 1:05pm

A recent piece in GigaOm suggests Apple will launch an Internet radio service not to compete with Pandora, but to bolster its music sales business against competition from on-demand services like Spotify.

As NPD Group's Russ Crupnick explained to the RAIN Summit West audience in Las Vegas, his company's data shows 38% of American consumers still think it's important to "own" music (as opposed to accessing it via on-demand streams). But for users of Pandora and other webcasters, that number rises to 41%. What's more, many of these respondents said they've purchased more new music because of what they hear on these services.

It's logical to assume, as GigaOm contributor Janko Roettgers, that partisans of on-demand services -- since they basically have any music at their fingertips at any time -- aren't nearly as compelled to purchase music downloads.

So, while the Spotify-type services, since they replace music ownership, compete with iTunes download sales, Pandora actually encourages music sales.

Apple's move would simply keep that stream listening "in-house" (and perhaps they can sell some ads) and make it ever-so-slightly easier and quicker to sell a download.

Not that this will be easy. An article from The Street (in MSN Money) reminds observers that even a titan like Apple "cannot overcome Pandora's enormous first-mover advantage."

Two major points here: (1) Pandora has created an extensive sales structure with the goal of capturing traditional radio ad spending. Apple is far behind in this respect; (2) Apple "simply will not be able to do personalization and discovery -- two key components that set Pandora apart from its competition -- at the level necessary to match the quality of Pandora's offering as push-a-button-and-li​sten-wherever-you-ar​e radio." writes The Street.

Regardless, as the NPD data also shows, Apple's share of the download market (while still as dominant 63% in 2012) has been falling in recent years (from 68% in 2011, 69% in 2009).

Roettgers concludes, "That’s why it’s smart for Apple to invest in iRadio. The goal is not to kill Pandora, but to actually bring that type of radio service to more users, and keep them from switching to a full-blown access model."

Read the GigaOm piece here; Reuters on more NPD data here; and The Street in MSN Money here. Finally, listen to NPD Group's Russ Crupnick's presentation from RAIN Summit West here on SoundCloud (press the orange "Play" button when the page loads).

Columnists see matter of Pandora viability through very different lenses

Monday, April 1, 2013 - 1:00pm

The Verge columnist Greg Sandoval cites an RIAA report and statements made by SoundExchange (which collects sound recording royalties from licensed webcast services and satellite radio) to report "Pandora contributes about 25% of all the money the labels receive from the access models. (Incidentally, SoundExchange's revenue was up 58% last year.)" ("Access models" is label terminology for licensed streaming services.)

And this, according to Greg Sandoval in The Verge, is precisely why the labels need to play hardball with Pandora and Internet radio.

"Access models" "are our present and our future," RIAA CEO Cary Sherman told The Verge. "[This] underscores how vital it is to protect these increasingly important revenue streams."

In other words, the labels need to avoid destroying these revenue sources -- yet maintain the upwards pressure on royalties because they also need to maximize profit (and these services are labels' only bright spot right now). Rocco Pendola, columnist for TheStreet, says this shows "the music industry needs Pandora just as bad as -- or, dare I say, worse than -- Pandora needs them. Same goes for the rest of Internet radio."

"If access models fail," Sandoval writes, "the labels risk ending up back in a world where a single player like Apple holds all the power." Industry sources told The Verge that Apple and labels are increasingly close to a deals that would pave the way for an Apple "iRadio" streaming service.

In fact, should the record label give Apple royalty rates that are actually more affordable than the statutory streaming rates, Pandora would have "plenty of ammunition to argue on Capitol Hill that web radio is getting screwed."

Despite this, The Motely Fool is warning investors against Pandora. In a posted video, Motley Fool CTO Jeremy Phillips says Pandora is open to competitive disruption because it doesn't own the content it streams, and any deep-pocketed competitor can easily enter the business. In fact, companies like Google, Amazon, or Apple could operate streaming services at a loss to widen the market for their other businesses.

TheStreet's Pendola strongly disagrees, saying Pandora's Music Genome (its proprietary database of human collected characteristics about each song it plays that drives its algorithmic music programming) is a great example of intellectual property that can't easily be duplicated by a competitor. He also points to the fact that Pandora has been assembling both national and local sales forces to compete with broadcast radio, another accomplishment that won't be easy for a competitor to duplicate.

He writes, "Competitor after competitor has come in and done absolutely nothing to slow Pandora's growth. In fact, the growth has never stalled. In terms of listener hours and revenue, particularly on mobile, the company is as healthy as it has ever been. Don't expect that trend to reverse, even if Apple hits the market with an iRadio product."

Read Sandoval in The Verge here, see video from The Motely Fool here, and read Pendola in TheStreet here.

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