Digital closing gap on radio as "leading source of music" for adults, says Vision Critical

Wednesday, March 20, 2013 - 12:15pm

New research from Vision Critical shows what most North American adults use AM/FM radio as their leading music source, but that digital options are quickly decreasing radio's lead.

While two-thirds of American and Canadian adults listen to broadcast radio (either via AM/FM or streamed online) every week, leading online sources like YouTube, Pandora, and Spotify "have gained a strong foothold." This is especially true in the U.S., as Pandora and Spotify are not officially available to Canadians.

More than 1 in 4 American adults regularly listen to music online, according to Vision Critical, while only about 1 in 5 Canadians do.

Vision Critical's study was released in conjunction with Canadian Music Week happening now in Toronto.

Expert insight into growing your streaming audience AND revenue at RAIN Summit West

Thursday, March 14, 2013 - 1:10pm

Edison Research co-founder and president Larry Rosin will pull "double duty" at RAIN Summit West, coming up April 7 in Las Vegas.

First, Rosin (top right) will join Arbitron SVP/Marketing Bill Rose (left) -- creating the tandem of "Rose 'n Rosin" -- to present the newest installment of their firms' annual joint-study "The Infinite Dial," examining technology adoption among radio listeners. It'll be the first of two presentations of valuable new research at RAIN Summit.

Rosin will also moderate our "Accelerating Your Audience Growth" panel (which we announced here), to investigate ways to increase listening for your webcast. The other pros joining the talk include The Echo Nest's Jim Lucchese, Rachna Bhasin from SiriusXm Radio, consultant/research expert Alan Burns, Pandora's Chris Martin, and Steve Jones from ABC Radio News.

After addressing audience growth, it'll be time to discuss how to "Jump Start Your Revenue," with a panel moderated by Triton Digital President of Publisher Development Dominick Milano (first announced here).

Michael Jackel, who's VP/West Coast Advertising Sales for leading music subscription service Spotify, will join the panel. Jackel (lower right) is a veteran of audio and digital media sales, with experience at Clear Channel Digital / iHeartRadio, Clear Channel radio and digital sales in L.A., and Katz Radio Group on both coasts. Dean Mandel is VP/Sales for Katz360, and manages digital sales efforts for more than 500 seller in various Katz Media Group divisions. Mandel (lower left) will also join the conversation, to discuss vital revenue strategies for Internet radio.

RAIN Summit West is Sunday, April 7 in Las Vegas. The annual full-day Internet radio conference is a co-located education program of the NAB Show. Now in its 12th year, the Summit focuses on the intersection of radio and the Internet. Keynoting the even will be RAB president and CEO Erica Farber (more in RAIN here) and Rhapsody International president Jon Irwin (more here). Register today (and save 20% when you use the discount code in the RAIN daily e-mail, to which you can subscribe here), via the RAIN Summit West page.

Spotify would offer free, ad-supported Internet radio in markets Pandora can't access

Tuesday, March 12, 2013 - 3:35pm

Global music streaming service leader Spotify will reportedly soon offer ad-supported streaming radio in every country in which it operates.

Pandora, the leader in Internet radio, hasn't successfully negotiated licenses to operate outside the U.S., (and recently) Australia and New Zealand.

Spotify's main service is subscription-based, on-demand streaming. They do, however, offer a free, ad-supported, non-interactive streaming radio service as well. And while the service hasn't generated many rave reviews (we don't know about actual usage), especially when compared to Pandora, the move gives Spotify access to an audience Pandora doesn't have.

Three anonymous sources told Bloomberg Spotify is close to finalizing deals with record labels for the service, which is planned to launch next month.

Read more in Bloomberg here.

Spotify too says it needs to pay less for music to make biz work

Thursday, February 21, 2013 - 11:20am

Leading on-demand music subscription service Spotify has begun license renewal negotiations with the major labels, and is reportedly petitioning for "substantial price breaks" and the right to stream its free/ad-supported service to mobile devices, The Verge reports.

Spotify finds itself in the same boat as webcasters: the high cost of content acquisition is its foremost obstacle to running a viable business. And as on-demand streaming is not governed by statutory rates (like non-interactive webcasting), Spotify pays in the neighborhood of 70% of its revenue to access music. In addition to the license fees, Spotify also wants the labels to allow its ad-supported free tier for mobile devices beyond the current 30 day trial.

Perhaps unlike Pandora's (and other webcasters') hopes for content cost relief, The Verge sees things in Spotify's favor. "The labels are big fans of the subscription model, which gives them predictable income across their entire catalog," The Verge writes. "The major labels have a vested interest in making sure subscription-based music continues to grow and thrive."

Read more here.

Research firm listens in on social media to find genre and geography preferences among Net radio services

Friday, February 15, 2013 - 12:05pm

Research firm Fizziology found that while Pandora dominates other music services on social media, iHeartRadio seems to especially appeal to Top 40 listeners.

Pandora users mentioned the service on Twitter, Facebook, and blogs over 1.9 million times over a three week period (1/7-1/31). To compare, webcasters like Songza and Clear Channel's iHeartRadio had fewer than 50-thousand mentions.

However, "users of iHeartRadio talked about Top 40 artists the most during the three-week period. 28% of all posts mentioning an artist referred to those with songs on the Top 40 chart," Fizziology's Patrick McMullen wrote. "It seems that Top 40 listeners are the type who like to set-it and forget-it when it comes to listening to music online."

In addition to Top 40, iHeartRadio users talked about hip hop and country music the most on social media. Pandora, with both a significantly large audience and a wide span of musical offerings, "could perhaps serve as a sample of the online music listening population as a whole," McMullen suggested. Pandora listeners most often mentioned hip hop/rap (31%), pop (24%), and R&B (17%) music on social media. Fizziology found Songza listeners mentioned more genres of music than any other service's listeners, "possibly due to the streaming algorithms based more on groove than genre." Songza users mentioned pop (28%), R&B (19%) and Top 40 artists (16%) the most, but also bluegrass (1%), blues (1%), jazz (1%) and world music (1%).

McMullen also recently penned a guest piece for Digital Media Wire, in which he revealed his company's findings on geographical preferences for various services. While Pandora and Spotify dominate in every region of the U.S., digging deeper reveals some interesting regionality. "Rdio is the least popular music service, but creative communities and the West coast specifically seem to have taken a liking to the service much more than the rest of the nation," McMullen found. "On the contrary, iHeartRadio is much more popular in the South than it is in creative communities or the West coast."

Read more from Fizziology here and in Digital Media Wire here.

NYT compares Pandora/Spotify royalties to labels' total download rev's to imply services should pay artists more

Tuesday, January 29, 2013 - 1:10pm

The discussion rages: as music listeners migrate from purchasing and ownership towards licensed streaming services, what of the earnings of performers?  In today's New York Times, journalist Ben Sisario writes, "As the companies behind these digital services swell into multibillion-dollar enterprises, the relative trickle of money that has made its way to artists is causing anxiety at every level of the business." 

Sisario at first seems to caution against comparing what performers earn when music is sold to when music is licensed to streaming services when he writes, "Unlike the royalties from a sale, these payments accrue every time a listener clicks on a song, year after year."

Yet later he cites wildly incongrous figures to presumably demonstrate that services like Pandora and Spotify pay less in royalties than would seem reasonable to expect.

For some reason, Sisario mentions Pandora's market cap and the estimated value of Spotify -- but doesn't cite the percentage of each company's revenue that goes to royalties, or their (so far) lack of profitability. (He says only "so far they have contributed relatively little to the American recording industry's $7 billion bottom line" -- by which we think he means "top line.")

In his next paragraph, he cites what each service has paid in royalties (Pandora: $202 million in the last four quarters; Spotify: $500 million "since its inception"), but then immediately compares those numbers to total U.S. record industry download sales of $2.6 billion. Not what performers earned from those sales -- but the industry's total download sales revenue!

Sisario does give the last words to artist management executive Cliff Burnstein and industry attorney Donald Passman, who in fact do see the math working out as the market grows.

Burstein told Sisario, "There is a point at which there could be 100% cannibalization [of music sales], and we would make more money through subscriptions services. We calculate that point at approximately 20 million worldwide subscribers."

"Artists didn’t make big money from CDs when they were introduced, either," Passman said.

Read this full article in The New York Times here.

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