pandora

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.

Pandora is 8th most-used smartphone app (comScore)

Tuesday, October 8, 2013 - 7:10am

As noted in Audio4cast, Pandora landed in 8th place in comScore’s measurement of top smartphone app usage for August. This metrics category is different from smartphone audience via the phone’s browser. Some top-15 media properties (like Gmail) might have their app ranking cannibalized by browser use, and others (like Twitter) by a multiplicity of popular apps that are lower on the list.

But Pandora’s ranking is fairly pure, as the service doesn't work in a mobile browser, and there are no alternatives to the official Pandora app. On comScore's browser-plus-app usage list, which is invaded by web-based behemoths like Yahoo!, Amazon, and AOL, Pandora holds its own in 9th place.

P’s reach is measured at 43.3 percent of the app audience, which is a remarkable testimony not only to Pandora’s footprint, but to Internet radio generally, if you consider Pandora as a proxy for the medium and the consumer model it represents. If you took away ecosystem-branded apps that enjoy a built-in smartphone advantage (Google Search, for example), Pandora would rise to third, after Facebook (75.7%) and YouTube (52.8%).

Social, video, and music are the chief app-based pureplays -- with each wedging into the others’ territories to some extent.

TuneIn on Samsung Shape: reinventing radio and consumer behavior

Monday, October 7, 2013 - 10:15am

Samsung, whose products increasingly foster the untethered lifestyle, has come out with a wireless home sound system called Shape. It is so-called because the shape of Shape is … shapely. Most reviews compare Shape to Sonos, which, while nicely shaped in its own right, similarly streams Internet radio and locally stored music throughout a home. Both systems hook into the home’s WiFi, are controlled by smartphone apps, and can multitask -- which means different rooms can hear different streams, playlists, albums, etc..

The smartphone app which serves as the remote control for Shape comes with a few services pre-installed: Pandora, Rhapsody, and TuneIn. Those selections niftily cover a wide service spectrum: Pandora for pureplay Internet radio; Rhapsody for subscription-only interactive music collection; and TuneIn for aggregated terrestrial radio stations.

That last point is the most interesting -- in a device that resembles radio, and is meant to replace the radio set as a household appliance, AM/FM is represented by a digital streaming platform.

As such, Shape (and Sonos, which also makes TuneIn easily accessible), position AM/FM in the life of a mobile-centric, lean-in consumer. Shape and Sonos are receivers of a sort, but the received medium is an Internet signal over WiFi, enabling a incongruent mix of formats: downloaded songs stored on a computer (or in Amazon’s cloud service in the case of Sonos), playlists maintained on a discovery service (Rhapsody), IP-delivered AM/FM webcasts, and -- crucially -- time-shifted radio programming (both on TuneIn).

Shape and Sonos encourage users, and force programmers, to think of consumable content as liberated from rigid delivery formats and schedules. Audio is granularized and liquified. In one RAIN household, TuneIn is used primarily to hear NPR program podcasts, detached from the original broadcast schedule. That use is gradually displacing radio sets.

Products like Shape, when paired with new content platforms like TuneIn, strive to reinvent not only technology (in this case radio), but also consumer behavior, while preserving content programming, and even improving access to it.

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.

 

Pandora’s September 2013 Audience Metrics report shows growth

Wednesday, October 2, 2013 - 12:45pm

This morning Pandora released its monthly Audience Metrics bulletin, showing across-the-board growth in the company’s key indicators.

Pandora’s reported listening hours grew to 1.36-billion, an 18% year-over-year gain from September 2012 (1.15B). Month over month, listening time marginally improved from 1.35-billion hours in Pandora’s August report.

For September, Pandora claims 72.7-million active listeners, a year-over-year increase of 25% (58.3M in September 2012, and 72.1M in August). Some observers regard September as the start of a crucial period of metrics comparisons with iTunes Radio, which claimed 11-million users in its first week. iTunes Radio and Pandora operated concurrently for 13 days in September. Although much was made of the 11-million number, it is too early in the life cycle of iTunes Radio to delineate “active” listeners -- users who return to the service. September, by itself, does not tell much of a story, but it is a reasonable bet that P stock would not have jumped today (+6.3% as of this writing) if Pandora’s active listeners metric had gone down. For one month's report at least, the launch of iTunes Radio does not seem to have had a discouraging impact on Pandora.

Finally, Pandora reports a 7.77% share of total U.S. radio listening for September, a 6.53% lift from a year ago. (August share was reported at 7.46%.) That particular metric has come under scrutiny and criticism recently, by Clear Channel CEO Bob Pittman (here) and Entercom CEO David Field at the recent RAIN Summit Orlando (audio here; coverage here). Pandora’s monthly reports do not disclose methodology or underlying data, but RAIN spoke with a Pandora spokesperson about the share-of-listening statistic, and received this response:

"Pandora arrives at this calculation using data from Triton Digital, Arbitron and the U.S. Census. The estimated total hours include satellite radio. There is no one group that measures total radio metrics. We welcome all third-party research from a variety of established partners, including Triton Digital, Edison Research, The Media Audit, comScore and Nielsen. Ultimately, we would like to see all radio measured side-by-side."

 

Dave Stewart’s Spotify reversal, and how music streaming becomes an ethical issue

Monday, September 30, 2013 - 12:10pm

Recording artist and producer Dave Stewart (best known for Eurythmics) has reversed his previous anti-Spotify stance, criticizing Radiohead’s Thom Yorke for “not getting it.” (Yorke famously conducted an angry public withdrawal from Spotify.) A year ago, surmising from Stewart’s public comments, he didn’t quite get it either. At that time, Stewart complained that if one of his albums were streamed nonstop for three years, he would earn only $47. Now, speaking to The Guardian, the man sounds like a newly-hired Spotify brand evangelist: “They [Radiohead] were misinformed. Spotify is one of the few companies that is transparent and actually pays properly [...] as a songwriter you should worship Spotify.”

Deification is certainly an extreme position in the Spotify opinion spectrum. But if holy reverence seems like an exaggeration, no more so than Spotify demonization which has labeled the service “a necessary evil” and “the definition of evil.”

A few days ago, NPR published an article titled, “Does Using Spotify Make You A Bad Person?” Two interesting points underlie the positioning of that article as a piece of ethics journalism. First, the title and its premise assume that readers have an established inner context for thinking about streaming audio as a moral gray area. Second, the question was sent in by a listener/reader, who was presumably struggling with an ethical dilemma related to her Spotify use.

Responses to the article range from polite disagreement to flaming scorn for posing the question in the first place. (The most incendiary comments reside on NPR’s Facebook page.) Overwhelmingly, article feedback refutes the gray-area premise. Some readers describe the value of music discovery in Spotify, and assert that long-tail artists benefit more from streaming exposure, even in tiny payouts, than they would without it. Others cite plain legality, criticizing the article as inappropriate on that basis. Indeed, the should-we-feel-guilty type of article is reminiscent of moral hand-wringing from the Napster days of 1998, when masses of consumers were enjoying an ownership platform that really was struggling to find a legal toehold.

Two media drumbeats contribute to framing Internet radio as a guilty pleasure, no less questionable than unauthorized file-sharing. First is a royalty and payout controversy, which spotlights both the still-immature life stage of the industry and the complexity of rights licensing. Partial information and misinformation skew public understanding of how streaming music content is acquired, and how creators and performers are paid for its use. When Dave Stewart accuses Thom Yorke of being “misinformed” -- and implies that he was, too -- it is easy to believe.

The second media drumbeat is celebrity advocacy on behalf of artists. When Thom Yorke, Dave Stewart, Nick Mason, and others utter their recriminations or reconciliations, their comments beget swirls of coverage and opinionated comments. These star-tinged blasts suffer from the same confusions and partial realities as the coverage of legalities. Stewart’s turnaround, like Nick Mason’s (see Friday’s RAIN Newsletter) seem to represent a growing reversal of celebrity sentiment, perhaps driven by balanced fact-finding such as David Touve’s correlation of streaming revenue to broadcast revenue. (PDF here.) Touve deconstructs ASCAP’s “Songwriters Under Attack” media campaign, and concludes that music creators might receive identical revenue for broadcast and streaming use, per listener impression. His calculations include some arithmetic runarounds, but notwithstanding those unavoidable fuzzy spots in the math, the report solves flagrant misunderstandings of the difference between one-to-one Internet streaming and one-to-many broadcasting.

In Dave Stewart’s latest epiphany, he forecasts the growing significance of streaming music in terms that Spotify and Pandora have used for a few years: “It’s a volume business.” Streaming companies often respond to critics by saying, “Just wait” -- much as Amazon preached to shareholders in early days of its growth (and still does). The popularity of free online listening is a recent phenomenon. Although the reach of Internet radio has expanded quickly to over half of online Americans, global expansion and distribution to mobile spaces are still germinating. In many cases the per-listener impression impact of a star act does not approach that of broadcast, even when critics talk about millions of streams, and for long-tail artists it is all upside as streaming scales.

Presumably, the expansion of Internet radio will also quiet the morality play staged around its growth.

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