RAIN news "quick hits": PWC on Net radio ad revs; Songza; SoundExchange; Live365; Senzari

Thursday, August 16, 2012 - 1:15pm

-Billboard reports (here) that a new PWC projection (here) says online radio advertising will grow by 11.5% from $465 million last year to $802 million in 2016. Satellite radio ad revenue will also rise, 9.4% compounded annually, from $74 million in 2011 to $116 million. Satellite radio subscription spending will increase from $2.6 billion in 2011 to $4.1 billion in 2016.

-Webcaster Songza says it's registered more than 2 million U.S. and Canadian users since June 1st, and that of all the users that have ever used Songza (since its official launch last September), over half of them are still active. Read more in TechCrunch here.  

-SoundExchange, the organization that collects and distributes money from Internet-, satellite-, and cable radio, has released a database of 50-thousand artists and labels that are owed over $60 million in unclaimed royalties. More from The New York Times Media Decoder blog here.

-Internet radio aggregator Live365 has announced the release of its dedicated application for the iPad. Read more here.

-Webcaster Senzari has launched a new proprietary music recommendation engine it calls AMP3 ("Adaptable Music Parallel Processing Platform"). Sensari says "The AMP3 technology is revolutionary within the music recommendation space, as it is the first engine to be modeled after a semantic network that includes an API architected similarly to Facebook's OGP (Open Graph Protocol)." Read more here

Warner Music Group made $54 million from streaming services last quarter

Thursday, August 9, 2012 - 1:20pm

Internet radio and on-demand streaming services contributed about $54 million -- or 25% -- of Warner Music Group's recorded music division's digital revenue last quarter. That reportedly amounts to about 8% of Warner’s total revenue for that period, reports AllThingsDigital. (Note, this revenue does not include the licensing paid by cloud/locker services from Apple and Amazon.)

"What’s more encouraging for Warner — and presumably, the rest of the big labels — is that streaming revenue is growing quickly, but doesn’t seem to be cutting into traditional digital sales from outlets like iTunes," writes Peter Kafka. "Just as encouraging: Warner says that after you net out the effect of currency fluctuations, the increase in digital sales was bigger than the decrease in physical sales."

Dare we to even imagine that streaming services like Internet radio might have a promotional benefit to the copyright owners?

Read more in AllThingsDigital here.

Spotify reportedly now second-largest revenue source for major record labels

Wednesday, June 27, 2012 - 11:55am

SpotifyOn-demand streaming music service Spotify is now the second-largest source of revenue for the major music labels, according to Business Insider.

However, the gap between Spotify and iTunes -- the #1 source of revenue for labels -- apparently "remains extremely large," according to Business Insider's unnamed source. iTunes paid an estimated $3.2 billion to the labels in 2011.

An "optimistic view" of the situation, writes Business Insider, is that "the labels will support Spotify as an alternative to iTunes... Spotify will become a revenue source the labels [will] come to depend on." Business Insider reports (here) 23 million people used Spotify last month.

Spotify may soon generate even more revenue for the music industry if its recently-launched free web radio service takes off (RAIN coverage here and here). In related news, SoundExchange last week announced it has made $1 billion in royalty distrubitions since 2000 (RAIN coverage here).

IAB: Web ad revenue up 15% in Q1 to reach $8.4 billion, twice that of radio

Tuesday, June 12, 2012 - 11:35am

Web revenue growthInternet ad revenue in the first quarter this year grew 15% year-over-year, reaching $8.4 billion, according to the most recent IAB Internet Advertising Revenue Report. "Growth in the double-digits is a positive sign for digital-media companies, as they look to bring more offline ad dollars online," writes AdAge

Radio-Info compares that figure to the Radio Advertising Bureau's reported $3.8 billion revenue for radio (up 1%). "That means the Internet haul is more than twice the size of radio" (find more here).

That said, AdAge notes (here) "this year's first-quarter total marks slower growth than the industry experienced in the same quarter last year when revenue increased 24% from the $5.9 billion booked in the first quarter of 2010."

Pandora's Q1 2013 results: Ad revenue up 62% year-over-year, listener hours up 92%, royalty costs up 91%

Thursday, May 24, 2012 - 11:10am

Pandora revenuesPandora yesterday released its fiscal results for the first quarter of fiscal year 2013 (ending April 30, 2012), which show that overall revenue reached $80.8 million -- up 58% year-over-year. Of that, 87.4% (or $70.6 million) came from advertising, up 62% year-over-year. Another $10.2 million came from subscriptions (up 38% year-over-year).

But costs grew as well, nearly 80% year-over-year, in fact. Content acquisition costs, which include royalty payments, grew 91% to $55.8 million -- nearly 70% of total revenue. Marketing costs also grew 81% to reach $23.5 million. All told, Pandora reported a loss of $20.2 million for the quarter, up from a loss of $6.8 million last year.

However, the company improved its guidance for the year from an adjusted loss of 11-16 cents on revenue of $410-420 million to a loss of 7-11 cents on revenue of $420-427 million. Additionally, as of publication Pandora's stock is up $1.77 for the day ($12.10 per share).

As for audience growth, Pandora says it now has 51.9 million active users (up 53% over last year) and 150 million total registered users. Total listener hours during the quarter reached 3.09 billion, up 92% year-over-year.

Pandora says it now has a 71.7% share of the top 20 web radio services' listening during Q1 2013 and 5.95% of total U.S. radio listening (up from 3.11% last year).

Joe Kennedy, Pandora CEOPandora CEO Joe Kennedy (pictured left) says the company "has the audience to massively disrupt" the radio market. It's "already larger than the largest AM or FM station" in many markets, he said (RAIN coverage on Pandora's latest local ratings via Triton Digital here).

Additionally, "[advertisers] are moving quickly to speak with their target customers across the Pandora platform, with the majority of the top 50 digital advertisers in the U.S. already having bought multiplatform advertising on Pandora. Pandora is the future of radio," he said.

Kennedy also spoke about how Pandora is seeking "integration into the systems radio buyers use every day," and increased hiring of local sellers. More on Pandora's local sales effort in the next story (here).

Radio Ink editor-in-chief Ed Ryan comments (here), "While some may dispute whether Pandora's 6% share of total audio listening is real or relevant, and whether a few hundred million dollars makes much of a difference to a multi-billion industry, the fact is Pandora is growing and radio is not."

To read more about Pandora's fiscal Q1 2013 results, find the company's press release here and coverage in the Wall Street Journal here.

After a tough 2011, Borrell predicts growth for local radio's online ad revenue

Tuesday, April 3, 2012 - 12:05pm

Borrell Associates says "pureplay" Internet radio generated $206.3 million in streaming audio advertising in 2011, significantly topping broadcasters' $67.4 million. And while Borrell Associates’ new Benchmarking Local Online Media: 2011 Revenue Survey predicts radio will double its streaming audio revenue in 2012, it'll still be only half of what "only-online" radio does.

Borrell says streaming audio ads represented 22% ($67.4 million) of broadcasters’ 2011 online revenue. 

Local stations didn't have a great 2011 online. While the online advertising market grew overall, local radio's share of the pool didn't keep up. While the rest of the online media industry grew 20.6%, says Borrell, radio grew only 6.1%, giving them less than 2% of 2011's $16.4 billion total.

That said, Borrell is looking for radio to turn it around, with a nearly $410 million 2012 in local online ad sales, for a 35% increase over 2011.

(See Borrell's predictions from November here. We also recently reported on BIA/Kelsey's 2011 local online ad revenue recap here.)

Borrell Associates CEO Gordon Borrell will both participate in the "Charting Digital Audio Ad Dollars" panel, and present a "POV" (see story in today's issue) at our upcoming RAIN Summit West in Las Vegas (more here). Read more on the Borrell study here.

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