Rhapsody

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.

QUICK HITS: Pink Floyd, Rhapsody, Lefsetz, Rdio

Friday, September 27, 2013 - 12:45pm

Pink Floyd drummer uncharacteristically praises music streaming. The iconic rock band has been a staunch and excoriating opponent of Pandora in the past, criticising the leading Internet radio platform for seeking lower royalty payouts. Speaking independently of the band, drummer Nick Mason granted an interview with the Wall Street Journal (“Streaming Is the Future”). Pandora wasn’t mentioned, but Spotify was, a lot. “Spotify for us was a success.” Mason seems to be basking in an epiphany: “Now it’s becoming clear that streaming is not another form of piracy.”

 

Rhapsody will add BandPage profiles. Music subscription service Rhapsody, which recently transitioned its leadership and suffered a deep-cut staff layoff, is adding a dimension to its programming through a partnership with BandPage. BandPage offer fan engagements and monetization opportunities to artists, who can craft experiences ranging from meet-and-greets to song critiques. Rhapsody will bundle BandPage experiences into its platform, synchronized with listener searches for participating bands. The partnership could be a pioneering way of inserting high-touch artist experiences into low-pay music streaming, increasing revenue for the band and engagement for the user.

Lefsetz on change. Bob Lefstez’s editorial rampages (see The Lefsetz Letter) are always entertaining, if not always on the money. The recent rant about iOS 7 was a lot of whine for the dime. Today’s disquisition (distractingly titled “Porn”) examines shifting consumer demands and the devaluation of legacy music assets and business models. “Change is constant. The key is to see the opportunities as opposed to mourning the loss.”

Rdio adds a feature. Lean-forward listening platform Rdio is encouraging lean-back use with its new Recommendations segment, fueled by Rdio’s ongoing relationship with The Echo Nest. The new feature surfaces albums, stations, and playlists based on usage history. It’s available on desktop now. Mobile-first evangelists would say that nothing is launched which isn’t a phone app, and presumably Rdio will roll out Recommendations to iOS and Android. (See Rdio’s blog announcement.)

Spotify adds four countries to its international portfolio

Tuesday, September 24, 2013 - 12:10pm

As jubilantly announced on its public blog (“Hello Argentina, Taiwan, Greece and Turkey -- Spotify here!”), the interactive streamer has expanded its reach. With the addition of those four, Spotify now distributes its desktop and mobile app experiences in 32 countries. The deal is standard Spotify: free, ad-supported desktop listening, a subscription tier to eliminate the ads, and a higher sub plan for mobile streaming and downloading.

Here are the international ranges of other music listening platforms:

  • iTunes Radio: U.S. only Xbox Music: 22 countries (free streaming available in 15)
  • Google All Access: 11 countries (U.S., Australia, added nine European countries in August)
  • TuneIn Radio: 80 countries and territories (see here)
  • iHeartRadio: U.S. only
  • Pandora: three countries (U.S., New Zealand, Australia)
  • Rdio: 31 countries
  • Rhapsody: 17 countries (some non-U.S. apps are branded as Rhapsody-owned Napster)
  • Slacker: U.S. and Canada
  • Songza: U.S. and Canada

As a counterpoint to the relentless regional agnosticism of internet radio (notwithstanding streaming broadcasts featured on TuneIn and iHeart), you might want to read remarks delivered by FTC Commissioner Ajit Pai (PDF) at last week's Radio Show luncheon. In his speech, Commissioner Pai held forth on the value of localism, before discussing revitalization of the AM band. 

As rumored, Rhapsody downsizes, Irwin out as president

Tuesday, September 17, 2013 - 12:00pm

Last week when word hit that pioneering music service Rhapsody might shake up its leadership, RAIN editor Brad Hill asked (here): "Can a subscription-only service provide compelling value against free-listening platforms? For that matter, can any streaming-music business hold its own against content costs?"

The official word came yesterday (and was covered right away by The Verge's Greg Sandoval) that Rhapsody will "rebalance and restructure U.S. operations," has laid off 15% of its staff (30 workers), and will replace top managers like president Jon Irwin (who'll move into an advisory role) and CFO Adi Dehejia. Rhapsody's new "executive operating committee" will be made up of executives Brian Ringer (CTO), Paul Springer (SVP/Americas), Thorsten Schliesche (SVP/Europe), and new CFO Ethan Rudin.

The company also announced investment firm Columbus Nova has taken some ownership of the company. Columbus Nova, by the way, owns Harmonix, which owns the Rock Band videogame franchise. Rhapsody says it will "add resources to enable the company to accelerate its efforts in Europe and emerging markets."

Sandoval puts Rhapsody's fortunes in the larger context of the tough go online music services have had.

"In the post-Napster era, we've yet to see a single digital music distributor generate lasting or significant profits," he wrote. "More recently, Spotify's losses have grown. Grooveshark has cut the size of its workforce. Rdio has struggled to keep pace with Spotify in terms of building an audience. In this environment, Rdio and others are trying to stay competitive. Operators of these sites say the obstacles are significant, as consumers remain reluctant to pay for songs and the cost of licensing music is still too high" -- the two very points Hill made last week in RAIN.

Read Rhapsody's official announcement here. Read Sandoval in The Verge here.

Unanswered questions at Rhapsody

Friday, September 13, 2013 - 11:55am

Being a first-mover can be dangerous.

No music service is more aware of the perils of pioneering than Rhapsody, the subscription listening platform that has been operating since 2001. CEO Jon Irwin, in his RAIN Summit West 2013 keynote, remarked: “We’ve been around for over 11 years. Sometimes that’s a good thing; sometimes that’s a bad thing.”

Rhapsody’s market position seems to be an uneasy thing, at least, if you give credence to this week’s rumors of an executive shakeup underway. Nothing has been substantiated, but Rhapsody’s business realities, combined with whirlwind change in the internet listening landscape, make the rumors plausible.

If nothing else, putting a question mark over Jon Irwin’s bio reflects light on larger unanswered questions about Rhapsody’s service model and future.

Rhapsody was a farsighted startup in 2001. Launching with a small and esoteric music catalog, consisting entirely of classical recordings to start (largely provided by specialty label Naxos), the platform established major-label agreements within about six months. Along with early competitor eMusic, Rhapsody committed to the subscription path -- there is no free listening and no ads. (Google’s All Access service is going down that path, too.)

Many observers believed that Rhapsody’s access-as-ownership model was the future, implying as it did that ownership of a product unit (CD or track) would be rendered unimportant by an always-on celestial jukebox of a vast recorded catalog. That scenario is closer to playing out now, but it took a long time (in internet years) for it to manifest. The iTunes Music Store launched in 2003, giving labels a way of leveraging the album/track paradigm in the online realm, while coaxing consumers into the digital age with a store model they could relate to. iTunes revolutionized music buying by keeping it familiar.

The mobile internet changed consumer demand more radically than Apple’s iPod MP3 player could service with its hard drives of bought and stored songs. Alongside the sea change of mobile, new services introduced free listening, supported by advertising and usability restrictions that most people were (and are) willing to tolerate. While Rhapsody continued to supply a feels-free access to a long tail of music, Spotify and its ilk furnished actually-free listening, discovery, playlisting, and social sharing.

If that didn’t pressure Rhapsody’s steadfast subscription model enough, the big sluggers are now coming to bat -- the ecosystem giants Google, Microsoft, and Apple. These collossal tech/media brands engage in primary businesses (advertising, software, hardware) that can easily float loss-leading divisions that sell music. Apple’s music-specific ambitions are probably the most distinct, and certainly backed by a monumental history of shaping consumer habits, but all three companies (plus Amazon) own immense user bases whose casual exploration of built-in music services can take share from established indies like Rhapsody.

So, whether Jon Irwin remains Rhapsody’s leader or not, the unanswered questions remain the same: Can a subscription-only service provide compelling value against free-listening platforms? For that matter, can any streaming-music business hold its own against content costs?

Investor valuations can soar in certain cases, but nobody is turning a profit quarter after quarter. (Rhapsody’s most recent year-over-year quarter was down eight percent.)

The most visionary music service is rewarded for its far-sightedness by owning the longest track record of profit futility. Hundreds of thousands of dedicated users hope Rhapsody can remain buoyantly afloat in increasingly rough waters.

Rhapsody VP Maples finds expert-curation key to minimizing audience churn

Thursday, August 15, 2013 - 11:20am

We've read (and written) lots on the increasing importance of "music curation" (what radio pros call "programming") for music subscription services.

It's great to offer tens of millions of songs, but how does a listener start? Millions have grown up with the radio and developed the habit of "lean-back" listening -- flip a switch, and "music!" Music subscription services are doing more and more to offer customers effortless experiences of music they'll enjoy (we've recently covered Spotify's new "Browse," Rdio's "Stations" -- and Beats Music's very mission as a service "heavy on curation").

Jon Maples, who's VP of product-content at musis service Rhapsody, today shares some of what his company has learned about how music programming impacts customer usage.

Beyond solving what Maples calls "the catalog problem" for the user ("What do I listen to?"), good music curation can help maintain an audience by minimizing "churn."

Churn is that rate at which customers abandon a service. Since it's expensive to constantly acquire new users, business naturally want to minimize churn. Maples says the key is to keep listeners active -- give them reasons to keep coming back and using the service.

"It seems obvious, but if a customer uses the product more, they are less likely to leave. In fact, we've found if we can get a customer to play more than 50 tracks a month, the churn rate drops in the double digits," he writes. We've "utilized curation as a driver, so that every time our members fire up the service, they're going to get something new to play."

He points to Rhapsody's "Featured" section, and the prominence of the service's curated playlists, stations, and posts. And it's important to apply that expert programming across as wide an offering as possible -- "speaking to a wide variety of tastes and interests," as Maples puts it. "Our best customers listen to more than 200 subgenres a year."

Rhapsody SVP/Product Paul Springer will speak on the "Streaming Music Trends" at RAIN Summit Orlando on September 17. More information and registration is here.

Read more from Rhapsody's Maples in Hypebot here.

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