ZenoRadio delivers global radio content over regular phone lines, and makes money doing it

Tuesday, May 21, 2013 - 1:45pm

CNBC covers the growing popularity of a service called ZenoRadio, which assigns U.S. phone numbers to streams of popular radio stations from around the world, giving listeners in this country access via a simple phone call -- no smartphone needed.

"A loophole in the Telecommunications Act of 1996, originally intended to help compensate rural carriers, allows the company to receive a few cents for every five minutes or so that a customer listens to the station," CNBC reports. "For the most part, it's only a few cents. But multiply that by close to a million customers—some of who listen for hours a day—and revenue starts pouring in... Experts say changes in telecommunications technology have allowed rural carriers to turn this into a profit center by partnering with providers of services like free conference calling and radio."

So, the more customers listen, the more money ZenoRadio makes -- a striking difference from webcasters whose costs rise with additional listening. The article makes no mention of licensing content.

Read more from CNBC here (h/t to Tom Taylor Now).

Low publishing fees, royalties on "skipped" songs could be sticking points for Apple to get iRadio out the door

Tuesday, May 21, 2013 - 1:45pm

Greg Sandoval at The Verge and Paul Sloan at CNet both report that negotiation snags are delaying Apple's roll-out of its much-anticipated "iRadio" streaming service (Apple reportedly wants to debut this summer at the latest, and possibly by next month's Worldwide Developers Conference).

Part of the problem is apparently that Apple's service will be more like Pandora, and less like Spotify. Sandoval writes, "The record companies and music publishers don't want another web radio service that satisfies a lot of music consumption but doesn't pay them much... The widely held belief by industry leaders is that to stop the slide in music sales, consumers have to be offered unlimited access to deep pools of songs that are supported by either small, monthly subscription fees, or advertising sales."

According to The Verge, it's Sony/ATV -- that's a music publisher, not a label group (and administers copyright song compositions, not recordings) -- that's holding up the negotiations. BMG Rights Management, the fourth largest music publisher, is another hold-out.

But CNet says it's Sony Music (the label group) holding things up for Apple, "over how much Apple would pay for songs that people listen to a fraction of and then skip." Sloan writes, "That skipping has become an issue is frustrating executives at the other labels because they see Apple's free radio service as a potential boon for the music industry overall and are eager to help the company get it launched... While it's unclear what Sony is asking for... if Apple bends for Sony on this issue, it would cause problems with its deals with Warner and Universal."

Read The Verge's coverage here and CNet's coverage here.

It takes more than a good algorithm to top Gizmodo's "Best Streaming Radio" ranking

Friday, May 17, 2013 - 12:20pm

Gizmodo contributor Mario Aguilar decided to find the best "automated DJ" on a streaming music or Internet radio service, pitting eight top services against each other for his "The Best Streaming Radio."  

His original intent was to find the service with the algorithm that created the best sounding user-generated station (he only considered services that offer "generative playlists" -- the ability for users to create "stations" on the fly by simply typing in a single artist, song title, or genre). Nearly immediately he realized picking a winner based solely on a good mix was futile, as they all, by and large, do a pretty good job at this task.

So he widened his considerations to other facets of the services -- "integration with social networks to the design and overall usability of each service's unique features" -- for the shoot-out.

I'll let you click through to see his ranking, but I'll include a few of his points here about specific services:

Turns out he's not a fan of Clear Channel's iHeartRadio service, which (he wrote), "does so little and doesn't do it especially well." He called it "radio in the most traditional sense," and didn't mean it as a compliment, since "regular radio stations are terrible, which is why we turned to the Internet in the first place."

Pandora, which is "showing its age," only fared a little better. He found the service "less evolved" with only "very basic" social integration -- but "if Pandora has a selling point it's simplicity."

And though may still have something to offer, in 2013 it "feels ancient." In fact, its concentration on scrobbling (tracking what you listen to on other services) makes it "more of a recommendation engine than a polished way to listen."

Aguilar actually had some high praise for Slacker's human-curated stations, which he says offer the "kind of variety you can't get from a machine." But, alas, this shoot-out was for algorithm-driven "generative playlist" channels. And the newly-redesigned Slacker interface seemed "ambitious and very good- looking, but it's pretty confusing" and "needs streamlining." Perhaps even worse, he said Slacker "completely missed the potential of social" media integration.

So -- does any service offer anything he likes? See which topped Gizmodo's The Best Streaming Radio here.

Indie label rights group research shows licensed streaming helping, not hurting, member record companies

Thursday, May 16, 2013 - 11:25am

New record industry research indicates licensed music streaming may be helping, not hurting, their business, including the sales of music downloads -- at least for independent label music.

Indie label global rights agency Merlin has conducted an analysis of 6.5 billion streams, and a worldwide survey of its membership, in which two-thirds of those members report an increase in "a-la-carte" download sales year-on-year. More than 90% of Merlin members say streaming and subscription license revenues also increased -- for a third of them, they more than doubled.

Merlin is the organization that administers performance licenses for many leading independent record labels (like Domino, Beggars, and Merge, representing artists like The Arcade Fire, the xx, Nick Cave & the Bad Seeds) -- accounting for 10% of the world's music market.

Merlin's market share for streaming is outperforming the overall digital market, by up to 20%, the organization says. Between 2011 and 2012, 73% of Merlin's study respondents said their overall business revenues grew from 2011 to 2012. Of these, 21% reported overall revenues had increased by more than 50%.

The study included streams from services like Spotify, Deezer, YouTube, and Rhapsody; and download sales from the likes of iTunes, Amazon, eMusic, beatport, and more. Read the study results from Merlin here

TechCrunch reports on this too here.

Music services don't need comprehensive catalogs to attract most fans, Digital Music News argues

Wednesday, May 15, 2013 - 11:55am

Digital Music News editor Paul Resnikoff asks, "Do consumers really care about having every last song at their fingertips, millions of songs deep?"

While streaming music services like Spotify, Rdio, and Rhapsody seem to think so, as they tout library size as a major feature, most listeners don't care, concludes DMN.

"This matters far less than the industry thinks."

SiriusXM has over 24 million subscribers, dwarfing any other music subscription service. But "Sirius has selection, and even Pandora-like stations. But you're not picking the songs, playlisting, or otherwise DJing with millions of deep tracks. You're driving, working, reading, sleeping, or doing something else, while someone else is curating an ultimately limited selection."

Another example: Pandora, with a far more limited library and lacking the on-demand component, it's topped 200 million registered users.

"Many consumers will say they want everything, but actually don't," Resinkoff wrote. "And all you have to do is look at virtually any chart from any 'comprehensive' streaming service. Because even with the widest selection imaginable, the world's chosen playlist is amazingly thin."

Read this entire article from Digital Music News here.

RAIN Summit West recap: NPD Group research

Wednesday, May 15, 2013 - 11:55am

NPD Group SVP/Industry Analysis Russ Crupnick sees the music industry headed towards another cliff -- and thinks streaming audio and capturing the favor of the 100 million "casual music fans" may be the keys to averting it. Crupnick presented recent research findings at RAIN Summit West last month in Las Vegas. 

"We desperately need streaming radio to succeed," Crupnick told attendees. "We need to get the lawyers, guns, and money out of the way, and start having a better understanding of how to get consumers on to the next model."

Back in the '90s, 90% of adult Americans regularly bought CDs. NPD research shows it's now 35%, and that's not being replaced by paid downloads. Just about 23% of people have purchased a music download in the last year, which means 3 of 4 haven't! And, as much as CD purchasing has dwindled, it's still more prevalent than downloading! And the amount of time people spend listening to these legacy formats (CDs, MP3 files, and even radio a bit) is down too.

Here's the bright spot: online radio usage is up 6% among young people (see the chart) -- and up 23% among baby boomers -- in the past year. Online radio is even the "way number-one" reason people are quitting P2P downloading: "It's just so much easier to use a streaming service," Crupnick paraphrased.

And, Crupnick adds, "these are really valuable customers" to the music industry. While the average American spends $24 on music in a year, Pandora listeners spend $40, and Spotify users $52. Streaming audio listeners also strongly out-index average Americans buying concert tickets.

But the real opportunity for streaming radio to succeed, and the music industry to avoid another cliff, Crupnick argues, is not going after the "core" music fans (the 30% of the population that accounts for 80% of the money spent on music). Radio and streaming services are already "serving them really well." The opportunity lies with attracting the other 70% of people -- the "casual" music fan.

Consider: Nearly all "core" music fans listen to AM/FM, and 77% listen to non-subscription online radio, according to NPD figures. And while a good majority of casual fans also listen to music on AM/FM (74%), just 25% listen to free online radio. That's the 100 million people market opportunity. That's the potential audience gain for Internet radio, if it can reach beyond the hard core music fans and get to everyone else who listens to AM/FM.

And to do that, Crupnick advises, it's necessary to understand the mentality of that casual listener. He stresses that the research shows these people aren't at all focused on those things broadcasters and webcasters obssess over. NPD found, as he put it, "98% of people don't know what 'an Rdio' or MOG is!" Most casual listeners don't really have any interest at all in mobile apps (though he suggested an Apple streaming radio entrance might change the game).

The lack of interest in mobile apps notwithstanding, Crupnick says "this battle is going to be won in the car," as that's where the vast majority of casual music fans' listening takes place.

And casual listeners aren't interested in subscribing for music either. "We've gotta figure out a way to help these services thrive outside of subscription," he concluded. "We can work together, labels, artists, services, to grow the pie."

RAIN Summit West was April 7 in Las Vegas. You can listen to audio from Crupnick's presentation, and all the RAIN Summit West content, on our website. Look for the SoundCloud links in the right-hand margin of

Our next event is RAIN Summit Europe, May 23 at the Hotel Bloom in Brussels. Limited space is still available. Information and registration links are available on the RAIN Summit Europe website here.

Syndicate content