The announcement that Winamp would shut down before the end of the year didn’t surprise me given that AOL had already abandoned its online radio platform, but it did make me pause. There have been several times this year that I have stopped and thought that surely this event is one of the signals that online audio has left the “niche” stage of its development and entered the reality of being a full blown mass appeal marketplace. One that a product like Winamp, free downloadable software that began as a tool to enable people to play all those songs they downloaded from Napster, couldn’t survive in.
In fact, I’ve wondered a lot over the years, why AOL kept updating it at all – given that the business model – getting users to pay for an improved upgrade to the player – was so weak. In fact, AOL didn’t just continue to update and distribute Winamp when it purchased Nullsoft in 1999 for $400 million, it also kept Shoutcast running all this time as well. And that was an even stranger conundrum, given that many of the biggest stations on Shoutcast were getting free bandwidth (at least a few years back they were). The deal was, at least back in the early 2000s, that you couldn’t run any ads if you wanted the free bandwidth. I never could figure out why that was. Didn’t that hurt AOL’s own Internet radio platform?
In any event, although Winamp and Shoutcast operated independently at AOL for lots of years, it seems that someone has finally noticed the lack of a business model in that department. Winamp will shut down later this month, although there is word that Microsoft may purchase the intellectual property. The end of an era that also signifies the arrival of a new one – the mature online audio marketplace, where you have to have a business model to compete…
With more than 200 million registered users, Pandora’s collection of user data is substantial. Now they are beginning to use that data to create marketable audience segments that advertisers can use to target their campaigns.
The first of these “proprietary audience segments” created by Pandora are Hispanic and Spanish speaking users of the service. To create these segments, Pandora cross referenced their registered users with zip codes that have a high population of Hispanic and Spanish speaking listeners, using publicly available census data. It’s still inference based targeting, meaning that the buyer has to agree to make assumptions about the consumer based on where they live, but it’s an improvement over cookie-based technology, which makes inference based assumptions as well – usually assuming that someone visiting a certain site matches a certain set of established criteria.
Critics will argue that users often give false registration data as well, and that is certainly a factor, but probably not a significant deterrent for buyers who are looking for any improved ways of reaching more of the people they want to reach, fewer of those they don’t.
Studies have shown that listeners are quite tolerant of targeted ads online, especially when they are targeted to offer products that the listener might find useful.
In fact, Pandora’s capable of slicing up their audience by market, zip code, age or gender, or the kind of music they listen to, and has been doing that for a long time. These new customer segments are available in media buying software that makes it very simple for agencies to identify, price and purchase. It’s a smart way to market their large audience to advertisers and showcase their targeting capabilities. This video features Heidi Browning, Pandora SVP of strategic solutions, discussing the streaming service’s targeting capabilities.
There is a debate raging about the validity of Pandora’s audience stats that has begun to seem like a pretty coordinated effort on the behalf of some large broadcasters. It seems to have begun on stage at RAIN Summit Orlando during David Field’s keynote
when he said Pandora’s claim to have 7% of all radio listening was false. Soon after, Bob Pittman said the same during a speech he made, and most recently Rich Bressler from Clear Channel said the same thing on a financial call. in response to more recent announcements from Pandora that their share is now up to 8%.
I’m questioning the wisdom of spending so much time discussing the competition. The thing that I find most ironic about all of this is that they are using public forums to disparage Pandora By comparing the total of ALL LISTENING TO AM/FM RADIO to Pandora. Which only lends credibility to Pandora! Whether their share of all listening is 4% or 7%, it’s a big number compared to the entire AM/FM listening universe. I cringe every time I hear someone make the comparison, it’s such an ill informed strategy. I’ll bet the folks at Pandora are delighted. In fact they just released a new report and said their share is now 8%! That rose from 7% so quickly that I wondered if Pandora is actually baiting broadcasters to gain more publicity.
The reality is that Pandora wanted to be measured by Arbitron all along, and it was some big broadcasters that pushed Arbitron hard against doing that.
Of course, a better strategy for broadcasters is to build out their own platforms, creating innovative ways to distribute their content and forge lasting relationships with their listeners, and then spend time talking about those platforms rather than contributing buzz factor to Pandora. That’s the stuff that advertisers want to hear and the market wants to invest in.
As I have mentioned before, there is a debate raging about the validity of Pandora’s audience stats that has begun to seem like a pretty coordinated effort on the behalf of some large broadcasters. It seems to have begun on stage at RAIN Summit Orlando during David Field’s keynote, when he said Pandora’s claim to have 7% of all radio listening was false. Soon after, Bob Pittman said the same during a speech he made, and most recently another guy from Clear Channel said the same thing in response to more recent announcements from Pandora that their share is now up to 8%.
The thing that I find most ironic about all of this is that these radio broadcasters are using public forums to disparage Pandora By comparing ALL LISTENING TO AM/FM RADIO to Pandora. Which only lends credibility to Pandora! Whether their share of all listening is 4% or 7%, it’s a big number compared to the entire AM/FM listening universe. I cringe every time I hear someone make the comparison, it’s such an ill informed strategy. I’ll bet the folks at Pandora are delighted, in fact they newly announced 8% rose from 7% so quickly that I wondered if Pandora is actually baiting broadcasters to gain more publicity.
The reality is that Pandora wanted to be measured by Arbitron all along, and it was some big broadcasters that insisted that Arbitron create reasons why that couldn’t happen. As far as the advertising community is concerned, the proof is in the pudding, and streaming stations can of course verify delivery of impressions.
Of course, a better strategy for broadcasters is to build out their own platforms, creating innovative ways to distribute their content and forge lasting relationships with their listeners. That’s the stuff that advertisers want to invest in.
Speaking of seismic shifts, YouTube held it’s own music awards on Sunday, and if buzz factor is any measure of success (it is, of course), then it was a big one. Lots of people were talking about the awards, Produced by Spike Jonze, the awards were designed to be edgy, spontaneous, even strange – and definitely the opposite of the highly staged awards shows that we see on television.
By all accounts, it was a celebration of “the democratizing nature of YouTube”, with artists like Mackelmore & Ryan Lewis who became famous as a result of their hit song video on YouTube that they made for $5000 bucks with some friends. Even big record label made artist Taylor Swift got an award for her song “I knew your were trouble”, which incited more fan videos than any other.
Disruption folks, that’s the story that is being told live on YouTube, as evidenced by these awards. It’s not actually news, since YouTube’s been streaming more songs than any other platform in the land for a long time. YouTube is the place where the hip and trendy get their new music. Have you heard the song “What Does the Fox Say?” It’s a new phenom from YouTube that my daughter and her roommate played for me when we visited on parents’ weekend a few weeks ago. It’s a Norwegian viral video that’s got almost a billion views on YouTube since early September. Meanwhile, Katy Perry’s new album sold less than 300,000 copies in its first week. Not an apples to apples comparison, but certainly one that lends perspective.
If you haven’t watched these awards, and this YouTube culture thing is news to you, I highly recommend that you take a look. It’s a new world order, driven by platforms that put consumers in the drivers seat.
Meanwhile, according to Tom Taylor’s newsletter this morning, YouTube spent so much money on radio stations last week promoting its awards show that it was a top 20 advertiser….
The big boys have arrived. Last week brought the news that YouTube’s subscription based streaming music service will launch before the end of the year, adding another massive player to the standing room only arena of streaming audio platforms. According to Billboard, there will be a free tier to the service as well, although it’s hard to imagine exactly how that will be delineated significantly from YouTube’s current free and on-demand offering of just about any music video. The subscription tier will add the ability to play full albums and cache music for offline listening, and probably playlist building as well.
YouTube has been the dominant on-demand streaming music platform in the land for a long time, although many folks didn’t think of them that way. The powers to be at Google have likely decided that the size of ad revenues and level of interest from advertisers in the streaming audio space have gotten big enough that it’s time to get serious about branding their service as a player.
The launch of iTunes Radio probably had something to do with the imminent rebranding of YouTube as well. Last week, Apple announced that their months old streaming service had 20 million users and 11 million uniques in 5 weeks. Of course, this is another service that’s self-reporting their own numbers, which to date are unchecked by third party measurement. But who expected less from an Apple launch that was well timed to sync with an OS upgrade that put the service front and center on everyone’s iPhones and iPads? The real data comes a little later when we start to see and hear metrics coming from other sources on the traction of iTunes Radio with consumers.
Meanwhile, we’re still waiting for the much discussed Beats streaming service to launch, and keeping an eye on Microsoft’s Xbox Music, not to mention Pandora, Spotify and other significant players. One thing is for sure – the consumer has plenty of choices at this point. With minor distinctions between each one, branding has become the key factor in the streaming music game…
NPR and its affiliates have always been leaders in digital distribution of programming, innovating new ways to grow audience with streaming and podcasts. An incredible ONE THIRD of the total audience for This American Life, produced by Chicago Public Radio, listens online – either streaming or downloading the show. Now the producers of the show are creating an always on streaming channel of This American Life programs. Launching it on TuneIn Radio, the new feature will include new episodes, as well as selections from the show’s archive of more than 500 hours, streaming around the clock.
“Who left the story faucet on? We did. On purpose.” says Seth Lind, director of operations for This American Life. “We’re excited to offer this easy new way to get the show, particularly past episodes people might have never stumbled upon.”
This is an interesting approach – one that doesn’t cost much, given that it’s simply streaming existing programming. And while the listener doesn’t have much choice in selecting the specific show, the programming is presented in a format that is a lot more of a “lean-back” experience than that of listening to a podcast. My hunch is that it’s a smart move – offering some of the most downloaded programming in an online format that is easy to access. They’ll probably find a much wider audience.
Programmatic buying will capture nearly 20% of the display ad spend this year, according to eMarketer, and that’s a number that is growing more quickly than anticipated. In general, display advertising is growing more quickly, thanks to increased demand for mobile ads. Advertisers are becoming more adept at using real time buying systems, attracted to the cost effectiveness and increased targeting capabilities. Meanwhile, as mobile usage continues to expand, publishers are releasing more inventory to the programmatic buying platforms. More buyers, more inventory, more revenue.
Meanwhile Triton Digital continues to announce enhancements to their programmatic exchange for streaming audio advertising, a2x. They recently announced a partnership with Lotame to integrate its unifying data management platform (DMP) into a2x, enabling a2x publishers such as Entercom, CBS, and Univision to to collect, understand and activate audience data from any source, including online, offline and mobile.
Essentially, Triton’s a2x platform is enabling publishers to transform their largely unidentifyable inventory into units that can be targeted and sold as targetable inventory in a real time buying platform. As advertisers and their agencies become more and more interested in platforms that offer greater flexibility in targeting and real time pricing, publishers are wise to have these options in their arsenal. However, as AdAge was quick to note in this article, it’s also smart business to compliment this selling strategy with one that offers custom and sponsored ads that net a higher rate.
Last week CBS Radio introduced Audio Ad Center, a self-serve platform that enables small businesses to promote and target their products and services to their online and mobile radio listeners with customized messaging and creative copy. Small business owners can visit the website to purchase ads to run on any of the online CBS Radio stations. ”Streaming audio is a very effective form of advertising and does not have to be limited to the companies with the biggest budgets,” CBS Local Media president Ezra Kucharz added. “With AUDIO ADCENTER, business owners can align themselves with the most trusted radio brands with millions of listeners between them to choose from.”
Innovative online platforms that enable advertisers to easily purchase, track and manage their ad inventory. These are the components that will drive more revenue to streaming audio platforms…
There’s been a lot of news about Rdio lately. Until recently, Rdio was a streaming platform that focused on providing an on-demand library of songs to suit users who like to choose what they want to hear, build playlists, etc.. Kind of like Spotify, except Rdio is a little more aggressive about their subscription model, giving users the chance to use the service free for only a limited time, with various subscriptions available after that.
In August, Rdio announced that they were adding personalized “radio” stations to their offerings, based on the user’s music selections, using “taste profiling” technology from The Echo Nest. This approach enabled Rdio to offer a more “Pandora” like experience to listeners. They began by offering that service, called You FM, free on the web, but just recently announced that it will be available free on mobile devices as well.
They’ve also just announced that their on-demand service is available at half off for college students. Are you confused yet? Wait, there’s more.
Big Radio Broadcaster Cumulus recently announced that they have taken a financial stake in Rdio and will sell all of their advertising. Which will run on the personalized station streams. Now, the actual terms of the deal were not announced, and I’ve heard that no money has changed hands, but apparently Cumulus will own the ad inventory on Rdio’s web based streams – plans are for mobile to remain ad-free. In exchange, Rdio will get access to Cumulus programming, and promotion on its broadcast stations, as well as a network of ad sellers. It’s an innovative deal for both Rdio and Cumulus – Rdio gets a partner that will boost its business prospects, and Cumulus gets a plug and play digital option for its customers, with very little risk.
May they thrive…