Category Archives: Digital Music

Shout Outs For Streaming Audio

More than 70 million folks in the US listen to music on their smartphones, says eMarketer. That number represents about 22% of smartphone users, and includes people who stream from their smartphones or download to their phones and listen at least once a month. By next year more than 25% of the US population will be listening to music with their smartphones.

us mobile phone streaming

Advertisers are missing the boat though, according to a blog post based on a new report for sale from Forrester Research. That report by Anthony Mullen says that downloading is a transitional stage for the music and audio industry and that consumers’ personal libraries of mp3s will dwindle as CDs, tapes, and vinyl did before them.” The streaming audio audience is “mushrooming”, with Google, Twitter and iTunes all jumping in in 2013. Meanwhile, in-stream audio advertising is showing signs of going mainstream as well – gaining spots in more and more standard ad campaigns. Streaming audio ads are data-rich, meaning that they enable great targeting and tracking opportunities, but it’s a market that remains under-invested in by advertisers.

In-stream audio advertising offers a great opportunity for advertisers, but it deserves quality creative that recognizes its unique attributes. Educating the ad community on both the benefits of the streaming audio audience, as well as the need for strategies that recognize its unique targeting and ROI abilities is the job at hand for streaming services, and reports like these two from Forrester and eMarketer are good things to have in your toolkit.

 

Top Ten For Streaming and Radio Are Different

The latest release of music sales figures by Nielsen and Billboard is surprising – digital song sales, which had been on an upward trajectory, seem to have taken a turn. Sales of albums and tracks, which grew 4% last year were down 4.6% for the same six month period.

At the same time, streaming volume is soaring, up 24% over last year, telling the full story behind the dip in digital song sales. The fact is, consumer attitudes toward ownership of music are changing. Streaming access to songs through services like Spotify are making it more attractive to subscribe to services to have access to the music you want to hear.

One of the remarkable things to note about this report is the wide disparity between the Top Ten Streamed Songs and the Top Ten Most Played Radio Songs. Seven of the songs on Radio’s top ten list are not on the Streaming top ten. So when folks are given the option to stream a song and hear whatever they want, they’re choosing a playlist that is 70% different than the one their favorite radio station is choosing for them.

There’s a lot of talk about research that shows that listening to broadcast is not being replaced by listening online. And that may be true. But it may also be true that there’s a new order driving the popularity of songs and artists, and broadcast radio would do well to recognize that.

nielsen billboard 2013

 

The Key to iTunes’ Success

iTunes now has 500 million users worldwide who spend approximately $40 a year on content, according to analysis produced by Horace Dediu of Asymco. Apple users meanwhile spend about $1 a day per device on content, meaning that each time Apple sells a device they can count on 11% annually from that device/user.

Music download sales from the iTunes store are declining however, while other content – mainly apps, are taking a larger share of user dollars. The main reason for this is that 5 years ago, most folks were just getting their first smartphone, and were actively using a device called an iPod to carry around their music. Remember those days, when you bought music and updated your iPod all the time, plugged it in to your car, listened to it while exercising? Now, you use your smartphone and connect to Pandora instead, right? (Or Spotify, iHeart, or whatever). asymco itunes chart

Yep, no doubt the iPhone had an impact on iPod sales as well as song sales, and very soon iRadio will have further impact. Apple is not afraid to look into the crystal ball, see the future, and cannibalize one product with the next big one. And a few years back they saw the Pandora app take off like wildfire in their very own iTunes app store as every new user downloaded the app onto their phone, and they decided that they had better get into the streaming game. Are you as willing to cannibalize your comfort zone in the face of future trends?

The Twitter Approach To Streaming Songs

While rumors of a streaming music service from Apple and Google have been prevalent lately, few expected the announcement last week that Twitter is developing a mobile music application that will let its users play and share songs. Last year, Twitter acquired the music recommendation website We Are Hunted, a site that charts the 99 most popular songs on a daily basis by tracking what the web has to say. It was a perfect match for Twitter, since it was a music discovery site already built to keep track of what music listeners were talking about and sharing on Twitter and other sources.

SoundCloud

The new app, called Twitter Music, could launch by the end of this month. Various reports say that Twitter Music will suggest artists and songs, based at least in part on what a person follows on Twitter. Songs will be streamed via SoundCloud, which seems to be a perfect streaming partner. It’s easy to imagine the success that an application like this can have, given the popularity that lots of recording artists have on Twitter. Artists can offer their music on SoundCloud and spread the word on Twitter directly to followers.

Probably not coincidentally, SoundCloud has revamped its fee structure, making it easier for artists to open accounts and offer their music easily to fans. An enhanced Pro subscription also offers the ability to run ads, which they call “Moving Sounds.” Based in Berlin, SoundCloud has over 180 million users per month. It’s one very interesting streaming platform that is more focused on delivering quick hits – like songs and soundbites, than longer, radio station like experiences. Which is of course, entirely compatible with the way online consumers like it, on Twitter and Facebook, Instagram and Tumblr…

By the way, SoundCloud execs participate often in RAIN Summits, and we’ll be hosting one in Vegas on April 7th, and Brussels on May 23rd.

Streaming’s Top Songs Chart

English: The logo for the Billboard magazine.

In a nod to the increasing share of music that is getting listened to via streaming platforms, Billboard has added a Streaming Songs Chart to its weekly listings. Last spring Billboard started charting top songs played by On Demand services, this list will cover those and add the songs played most by streaming services. Macklemore & Ryan Lewis holds the top spot on Streaming Songs with 1.45 million total streams in the U.S. Services included in the reporting are “such services as Spotify, Muve, Slacker, Rhapsody, Rdio, MySpace, Xbox Music and Guvera.”

The data comes from Nielsen Soundscan and Nielsen BDS data - Nielsen SoundScan measures U.S. point-of-sale of recorded music product. Nielsen BDS tracks U.S. radio airplay and music streams. Both systems power many of the Billboard charts. Nielsen recently reported that music purchases are at an all time high, up 3.1% over last year, driven by digital sales. For 2012, sales of albums and track equivalents are down slightly at -1.8% vs. 2011. Digital Albums are up 14% and Digital Tracks are up 5%. CD sales declined 13%.

Pandora meanwhile has posted a recap of sorts of last year on its blog, noting that last year listeners to Pandora created 1.6 billion stations and listened to more than a million different songs by 100,000 different artists. I’m thinking that data is probably at least as deep in terms of sample size as the stuff Nielsen is collecting…

Taylor Swift’s Break Up With Spotify

An article in the New York Post last week notes that Taylor Swift’s new album Red is not available for on-demand listening on streaming services like Spotify, Rdio and Rhapsody. This is a strategy that other artists have used as well – Adele and Coldplay both held off making their new albums available on similar services. While it’s a leap to say that the strategy was the reason that the album had the best sales in its first weeks of any non-discounted album in the last decade, it’s reasonable to conclude that it didn’t hurt.

Streaming is growing in popularity and record sales are dropping. Some artists and their companies are seeing a relationship between the two and concluding that making their new releases available on these services is bad for song sales. Unfortunately, the amounts that they get paid by the services when listeners listen to their music doesn’t compare.

Ironically, Swift didn’t see fit to hold her album back from airplay on broadcast radio. A deal earlier this year means that she’s actually getting compensated to some degree by some big broadcast companies including Clear Channel when her songs play on the radio. While that probably doesn’t amount to much, it’s forging a new relationship between recording artists and radio.

It’s important to note that it’s the on-demand services that are getting shunned by Swift and others – Pandora has the album, as does iHeartRadio and other services that don’t enable listener to build playlists and request music by song, artist, album, etc.. There’s a growing perception that those services are being used as music collections and replacing song sales.

It may well be that artists, especially the big names, will continue to hold back their albums from services like Spotify for a while as part of their launch strategies. Or the services may find a way to be more relevant to those artists in their early song sales days, by providing data, promotion, sales support, in an effort to get back together again…

 

Study: Pandora Boosts Music Discovery But Not Song Sales

Internet radio services such as Pandora are increasingly important platforms for new music discovery, according to a report released by NPD Group last week. The study also found that listening to Internet radio – 27% over last year, while listening to on-demand streaming music platforms is up 18%.

As Internet radio and on-demand listening has risen, the number of consumers who reported listening to music on CDs dropped 16 percent, while the music audience for AM/FM radio fell 4 percent, and the number of consumers listening to digital downloads declined 2 percent.

“Although AM/FM radio remains America’s favorite music-listening choice, the basket of Internet radio and streaming services that are available today have, on the whole, replaced CDs for second place,” said Russ Crupnick, senior vice president of industry analysis at NPD. “We expect this pattern to continue, as consumers become more comfortable with ownership defined as a playlist, rather than as a physical CD or digital file.”

96 million Internet users listened to Internet radio or an on-demand service in the past three months. In an interesting chart of usage rates of Pandora listeners to other music sources such as AM/FM, CDs, and digital music files on computers, the report shows that Pandora listeners listen less to all of those over time, but continue to listen to AM/FM more than the others.

 

Women Like Listening Online

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Women like streaming music on the Internet, and are doing it more than they were a year ago, according to a new study by Alan Burns and Associates. The new study focuses on women’s usage and attitudes toward radio, among women 15-54 who listen to Adult Contemporary and Top 40 formats. The findings tell the story of the on-going shift online. Indicators of that trend include listening to streaming music up 15.8% over a year ago, and nearly 40% in total agreement with the statement that “Radio is kind of old, online music is hot now.”

On a daily basis more than one out of four women who listen to radio listen online – either to customized streams or streams of a radio station. 70% listen to radio on a radio. Which is a majority, but a long way from what that number used to be. In fact, in the last year, the percentage of women who listen to radio on a radio on a weekly basis dropped 8% – from 95% to 87%.

Women are shifting their listening online. Listening to radio is growing – but listening via AM/FM is not…

 

Now Adele Is Snubbing Spotify

Last week the world belonged to Adele, who won award after award at the Grammys. But you can’t hear 21, her award winning album, on Spotify. Adele’s pulled her music from the service.

 

Joining Coldplay, Paul McCartney and a few others, Adele – most likely with the encouragement of her record label, is boycotting Spotify, pulling her new album 21 from the service. This move is becoming more popular by artists looking to maximize sales of their new or newly award winning albums. There’s a growing opinion that giving listeners access to their new music on a service like Spotify, where listeners can select the song they want to hear whenever and as often as they would like, will hurt album sales, either digital or physical.

 

Apparently, Adele’s management was willing to license 21 to Spotify for premium, subscription paying listeners only, but this option was declined by Spotify. It’s not hard to understand why they declined it, as it could easily have a snowball effect on other artists.

 

There is a concerted effort by a growing list of popular artists to control the access that listeners have to their new music. Most of the recent moves have concentrated on limiting the kind of free, on-demand access that Spotify offers, although recently Paul McCartney reportedly blanked all streaming of his newly released album.

 

Note: Although there are multiple reports that Adele’s 21 is not available on Spotify, I do have access this morning to a “sampler” version of 21 in my Spotify library. I’m not sure if this is a new development, or a function of the fact that I have had it in my library for a while..

 

Digital Song Sales and Streaming Performances Were Up in 2011

For the first time, digital music sales are larger than physical sales; accounting for 50.3% of all music purchases in 2011. Digital track sales set a new record with 1.27 billion sales in 2011; an increase of 100 million sales (8.4%) over 2010. Total digital album growth was 20% in 2011 as well, according to Nielsen Soundscan.

Adele had the top selling digital song, but Lady Gaga was the most streamed artist with more than 135 million streams while “Super Bass” by Nicki Minaj was the most streamed songs with nearly 85 million streams (according to Nielsen BDS).

Meanwhile SoundExchange reported that they distributed a record amount of money to artists during the 4th quarter of last year -  $89.5 million with more than 18,000 payments, bringing year-end estimated royalty payments to $292 million (up 17 percent from the prior year). The royalties are paid by Internet radio, satellite radio and cable TV music-only channels for their use of sound recordings, and are distributed by SoundExchange to recording artists, record labels, and a non-featured artist fund.

The upward trends in both digital song and album sales and in streaming consumption and compensation are all evidence of a healthy online listening marketplace, something we can all be happy about.

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