Category Archives: downloads

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?

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.

 

Coldplay Gives Spotify The Cold Shoulder

Coldplay released a new album this week and didn’t license subscription services such as Spotify to play it, a strategy that is raising concern for on-demand services. There’s been a debate brewing about the wisdom of offering brand new releases through on-demand subscription services and whether that has an impact on song and album sales.

After withholding their new album Mylo Xyloto from Spotify, Coldplay sold more digital albums that ever before in the UK – something that doesn’t bode well for on-demand services like Spotify. DMN reports that Coldplay sold more than 200,000 units in the UK alone, 40% of which were digital sales. Figures from US sales were not yet available.

Services like Spotify, Rdio, Rhapsody and MOG offer on demand song plays for a monthly subscription fee. But artists have been unhappy with the payouts from these services, and some are removing their new albums, or even their entire catalog from the playlists of some streaming services.

In a story on this topic, CNET quoted artist and indie label owner Sam Rosenthal pointing out that 5000 song plays on Spotify would earn him $6.50. An artist would earn $.20 per song download on iTunes, or $1000 for the same number of song sales.

But does an on demand song play on Spotify replace a song download? That’s a good question and one that no one can really answer. In the CNET article, Jon Irwin of Rhapsody claims that rather than cannibalizing song sales, on demand services are cannibalizing piracy – that inexpensive subscription services appeal to the younger listener who used to download all their music illegally and now pay a monthly fee instead.

Unfortunately, higher song sales for Coldplay after holding back their new album from Spotify doesn’t help on demand services make that point…

MP3tunes Scores A Victory For Cloud Locker Services

Law Books

Image by ConanTheLibrarian via Flickr

This is a guest post by Angus MacDonald, General Counsel at Live365, Inc. regarding a recent court ruling that could have significant impact on the streaming audio industry.

Cloud-based music services can heave a sigh of relief. MP3tunes, the cloud locker service founded by Michael Robertson, scored a partial victory in the copyright litigation brought by EMI. In his August 22nd decision, Judge William H. Pauley III agreed with MP3tunes that the safe harbor provision of the Digital Millennium Copyright Act (DMCA) protected it against many of EMI’s infringement claims. The decision represents a significant victory for other cloud-based music services – such as Google, Amazon and Dropbox – who should have renewed confidence in operating their cloud services without a license. Though the decision sets a beneficial precedent for cloud-based music services generally, it is a mixed result for MP3tunes as the court also found both the company and Robertson liable for copyright infringement on some of EMI’s claims.

MP3tunes allows its users to store music files in personal online storage lockers and then to play those stored files from Internet-connected devices. MP3tunes also operates a second website, Sideload.com, that permits users to search for free song files on third-party websites and then “sideload” those songs, which would be saved to users’ lockers. EMI, along with fourteen record labels and music publishers, filed this lawsuit in November 2007, claiming a laundry list of violations of copyright and unfair competition laws.

Yesterday’s decision turned largely on whether MP3tunes is eligible for the DMCA’s “safe harbor” protection, which shields qualifying online service providers from copyright infringement for content uploaded (or “sideloaded”) by their users. To qualify, online services must follow the rules set forth in the DMCA, including expeditiously responding to takedown notices from copyright holders. The court found that MP3tunes – for the most part – complied with all of the DMCA rules and, therefore, was largely immunized from liability.

However, MP3tunes and Robertson did not completely avoid liability. Shortly before filing this lawsuit, EMI sent MP3tunes three takedown notices that identified specific song titles and URLs to be removed. Although MP3tunes disabled the links to those songs, thereby preventing more users from downloading them, it did not actually delete the songs from the lockers of its users who sideloaded the songs from those links. (MP3tunes claimed that it would be subject to lawsuits by its users if it removed property from users’ lockers.) The court held that MP3tunes did not do enough when it failed to remove the sideloaded songs from users’ lockers.

As for Robertson, the court ruled that Robertson was “directly liable for the songs he personally sideloaded from unauthorized sites.” This finding is somewhat confusing based on the court’s earlier statements that “there is no evidence that MP3tunes executives or employees had firsthand knowledge that websites linked on Sideload.com were unauthorized.”

There are several key-takeaways from this important decision. First, this decision provides significant legal cover for cloud-based music locker services to continue providing their storage and play-back services without obtaining a license. (When Amazon and Google launched their respective cloud services earlier this year, the record labels were “upset” and clamored that licenses were necessary.) While the decision does not specifically address the legality of MP3tunes’ music locker business model or other similar cloud-based services, it is clear that MP3tunes would have completely escaped copyright liability if it had removed the specific songs listed in EMI’s takedown notices from its users’ lockers.

Second, the ruling re-affirms the DMCA as a powerful shield against copyright holders, who claimed that the DMCA did not apply to MP3tunes. As the court observed, “the DMCA does not place the burden of investigation on the Internet service provider.”

Third, the decision appears to let MP3tunes off-the-hook for its storage process, which eliminated duplications of the exact same music files so that only one copy of a particular file would be stored on its servers and then streamed to its users. Google and Amazon took a different approach when they launched their respective services as both companies require every user to upload every song, regardless of whether other users had uploaded identical files, thereby resulting in an enormous consumption of bandwidth and storage space.

Finally, the ruling indicated that playing back songs stored in a user’s digital locker was not a “public performance” requiring a license, contrary to EMI’s contentions. This holding was a natural extension of an earlier decision – commonly referred to as the Cablevision case, which determined that a public performance license was not required for the play-back of television shows that were stored on a remote DVR at the direction of Cablevision’s subscribers.

The EMI v. MP3tunes case, however, is not over. While the decision disposes of some claims, several issues (such as damages) still will need to be tried – unless there is a settlement. The range of damages is $750 is $30,000 per work infringed, and can increase to $150,000 per infringed work if there is a finding of “willful” infringement. Because there are at least 350 works at issue, the damages could exceed $50 million dollars, though that result is highly unlikely. And, barring a settlement, one can certainly expect an appeal of this decision. But, in the meantime, the decision provides some important clarity and leverage for cloud-based storage services that may have been considering the daunting process of negotiating with labels (and other copyright holders) for the right to store and play-back their users’ lawfully-obtained digital files.

A copy of the decision is available here:

http://www.nysd.uscourts.gov/cases/show.php?db=special&id=125

Your comments are welcome below. You can reach Angus MacDonald at amacdonald@live365.com. 

Will Streaming Sell More Music For eMusic?

Image representing eMusic as depicted in Crunc...

Image via CrunchBase

eMusic has always had a slightly left of center approach to selling digital downloads. eMusic offers music consumers the opportunity to pay a monthly subscription fee for access to their song catalogs and download a certain number of songs per month – $12 bucks gets you 24 songs, $32 bucks a month allows you to download up to 73 songs a month. That’s a lot of music for a pretty good price – certainly a lot cheaper than your average iTunes song.

They used to be primarily focused on independent labels, lacking the deals to add the big four record label’s music to their catalog. But that has changed in the last couple of years and now eMusic has deals with all four. They also started selling audiobooks a few years back as well.

Now they are launching genre based Internet radio streams as well. Join the club! According to Billboard, eMusic will offer streams of music curated by eMusic’s editorial staff. There are a wide variety of offerings from punk and alt-country to electronica and “fresh jazz”. Streams are available to eMusic U.S. subscribers for free for up to ten hours of listening per month. Non-subscribers may get to try them out soon as well.

So eMusic wants to take on Pandora and Spotify? I doubt it. It sounds like eMusic – and perhaps the labels it’s partnered with as well – are noticing that streaming has a positive effect on music purchases. They’re planning to add a buy button to the player, and they certainly have the buy in of their record label partners. Though it hasn’t been quantified in a while, I’ve seen data out there that shows Pandora selling lots of songs for iTunes and Amazon to their listeners.

Carolla’s World Record: Most Downloaded Podcast

Adam Carolla has broken the record for most downloaded podcast, according to Guinness World Records, receiving 59,574,843 unique downloads from March 2009 to March 16, 2011. The previous record was held by the Ricky Gervais Show.

Carolla launched a pr campaign to boost awareness that he was closing in on the record, urging listeners and followers to download his podcasts so he could beat Gervais. “Be a part of history, and help us bring the World Record for Most Downloaded Podcast over to America—where it belongs.”  The broken record was announced during Carolla’s live appearance on the Jimmy Kimmel Show.

 

The most recent Arbitron/Edison Infinite Dial Study reported that 31 million Americans have listened to a podcast in the past month. That translates to 12% of the 12+ population, a share which has not increased in the last year.

While it’s not growing at the rapid pace that streaming audio is, podcasting seems to be holding its own as an audio delivery platform that is uniquely suited to Carolla’s style – personality driven programming. Carolla’s story is a great one – from out of a job at CBSRadio in LA, to building his own show, to podcast of the year, to Guinness World Record for most downloaded podcast.

RIAA Performance Royalties Up 60% in 2010

A CD Video Disc (playing side) produced in 1987.

Image via Wikipedia

According to 2010 year end shipment statistics reported by the RIAA, digital formats now comprise 47% of all music shipments in the US. That’s a large share, especially compared to the 9% share digital music held in 2005. Overall, the total digital music market in 2010 was $3.2 billion, a 3% increase over last year.

According to 2010 year end shipment statistics reported by the RIAA, revenue from downloaded tracks and albums increased 12% and 8.6% year over year. Sales from physical units were down 10.9%. Music video sales and ringtone sales slipped as well. Subscriptions grew in number, but revenues were down, meaning more subscribers paid less for those services.

Performance royalties are becoming a major source of revenue for the labels. Payments grew from $155 million in 2009 to $249 million in 2010 – a 60% increase in just one year. That’s on top of 55% growth the year before that. At the current pace, that number will top a billion in just a few more years…

Mason Tells RAIN’s Hanson: Digital Is Critical to CBS Radio’s Future

CBS RADIO President and CEO Dan Mason is excited about broadcasting’s digital future. In a keynote interview at RAIN Summit West last week, Mason shared his thoughts on radio’s future. During the 30 minute “fireside chat” with RAIN Publisher Kurt Hanson, Mason outlined his perspective that digital is now an essential component for success for broadcasters.

Broadcasters should embrace personalization and explore sidechannels, said Mason. He mentioned Phillies Radio as an example of a sidechannel (HD, not streaming) that CBS RADIO is pleased with. Mason touched upon some other investments that CBS RADIO has made and is planning. He encouraged the audience to find him on Last.fm, where he listens to the Yardbirds, among other things.

He also said that plans are in the works to relaunch mp3.com in May. That’s big news – mp3.com was a free music download site that got into legal trouble with the record labels over licensing. Its history includes a huge IPO and eventual sale to record label Vivendi Universal, where it eventually died. CNET picked up the url, but it’s been inactive for several years. Now Mason says CBS RADIO will relaunch the site next month. A look at the site this morning shows the structure of a platform that will offer downloads, interact with Last.fm, and tie in videos, podcasts, entertainment news and more. (In an ironic sidenote, mp3.com’s original founder, Michael Robertson, also appeared at RAIN Summit later in the day on a panel discussion of The Future of Music.)

Later last week, Mason sent a memo to CBSRADIO employees that echoed the digital excitement he expressed at RAIN Summit West, commenting  “never have I been more certain as to what an incredible opportunity we have before us.” and “the digital side of the business is just as important as our over-the-air operations.”

There were many impressive moments at RAIN Summit West, it was an event that in my opinion really exemplified the positive place that Internet radio is occupying. Listening to CBSRADIO President and CEO Dan Mason talk about the digital opportunity for broadcasters as a critical element to future success was one of those.

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