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…
This week the Boston Herald, one of two major newspapers in the city, announced that they will launch a new Internet radio station. Boston Herald radio will offer 12 hours of live local talk programming every day, featuring veteran local talk show hosts. In addition, all shows will be archived and available 24/7.
Boston has become a hotbed of live locally produced Internet radio.
Just about a year ago, we saw Boston.com, owned by the Boston Globe, launch RadioBDC, an alternative music format station, after Clear Channel flipped a format and fired the on-air staff ofWFNX. RadioBDC picked up the pieces and began streaming it online instead. The new Boston Herald Radio will enter to compete in an already healthy talk radio market where Entercom and CBSown strong talk stations with long heritages. Which you might see as stiff competition, or you might see it as an indication that Boston’s a market that likes to listen to talk programming.
So now Boston’s two major newspapers have both tuned in to the fact that Internet radio is where it’s at. “Internet radio is exploding and it makes sense that the Herald rounds out our multimedia platform with talk radio programming. It’s perfect synergy,” said Boston Herald President and Publisher Patrick Purcell.
I couldn’t agree more. Last spring, Boston witnessed a remarkable thing in the search for the Boston bomber. They shut the entire city down and launched a manhunt the likes of which has never happened before. Residents sat in their homes, searching for and sharing information online about the progress of the search, along with the rest of the country. They watched television and listened to radio as well, but they connected online. If you’re running a large newsroom at a major newspaper in the city, it makes perfect sense that you would want to use that newsroom to power a piece of that conversation as well, doesn’t it?
I can’t wait to see what happens next..
In North America, mobile advertising revenues grew 111% from 2011 to 2012, while at the same time netting 83% growth globally. Growth in Asia just slightly outpaced North America during the same period. Contributing factors to the growth are easy to identify – widespread smartphone adoption and more time spent on mobile devices, along with increasingly better monetization of mobile ad services.
Mobile ad services are figuring out better ways to optimize the advertising experience for advertisers. This is obviously the key to growing revenue. Something that Apple understands, as they are about to launch iTunes Radio as an ad supported platform. So here’s what I would do if I were in charge of monetizing that platform.
- iTunes has 500 million users across the globe. Those users are mobile, and they like to consume content, mostly music. But over the past few years they have decided that they don’t have to own that music, they’re happy to stream it instead.
- iTunes also has lots of information on those users – who they are, where they live, what devices they use, how old they are, and what they like to watch and listen to. That’s the stuff that advertisers really want. But that’s not the holy grail.
- iTunes has a credit card on file for all those users. Because they buy songs, video and apps from the ITunes store already. So if you are an advertiser, and you are selling something online, how would you like to sell it in Apple’s store, where users can purchase it with just one click? Sure, you’ll pay them something for that, but it’ll be worth it because it makes it so easy for the customer.
That’s how I think Apple could revolutionize mobile ad monetization…
I’ve been away on vacation for the past week and a half or so – a vacation where I barely got online and didn’t check my email at all. After the first few days, it was surprisingly easy to do, and very relaxing. It turns out, last week was a big news week for Internet radio, with Apple giving the first preview of it’s nicknamed iradio product, and Pandora purchasing an FM station in Rapid City, South Dakota. I spent my first day back reading a lot and trying to get some perspective on both announcements.
iTunes Radio, it appears, will simply be Apple’s entry into the space, long awaited. After reading about it and talking to a few developers who have seen the interface, I guess it’s an Apple-esque, graphically interesting web radio interface that does the same things that Pandora does. Not a lot of innovation, but a well done product – possibly less than I would have expected from Apple, since I’m aware they have been actively working on this entry into the markeplace for at least a year and a half, when they contacted me.
Don’t get me wrong, I think there will be innovation with this product, and I’m hopeful that it will expand the marketplace for everyone. According to one thing that I read, Apple is planning to sell ads on its streaming radio platform using iAd, its mobile ad business. Consider that Apple knows about its users, which provides for effective targeting, and has a credit card on file for each one of them, which most of them are accustomed to using already to purchase songs and apps. That’s a system that could translate to expansive online revenues for lots of advertisers.
I don’t think Apple will mean a lot of trouble for Pandora, although certainly they will begin to share audience. Pandora’s got a large user base and a lot of happy customers. They may lose some share, but the number of people using Internet radio will continue to grow, and they’ll still gain listeners. Meanwhile, they’ll benefit from another major player in the marketplace who will help build advertiser investment. Look at it this way: it would appear that Apple’s game is to solve the conundrum of how to monetize the mobile audience, in particular the streaming audio mobile audience. I’d say that’s good news for the industry.
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.
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…
Triton Digital is getting ready to launch an online ad exchange for audio ads that will be the first platform to enable automated buying and selling of online audio impressions. a2x is the first audio advertising exchange that enables advertisers to buy targeted online and mobile audio inventory in real-time. The solution provides a system for managing, buying and selling third party advertising campaigns. In addition, a2x facilitates the execution of digital advertising trades between third parties, providing an information database featuring lists of advertising bid and offer values.
To offer targetability, the a2x solution integrates consumer data from partner eXelate which provides data and insight on online purchase intent, household demographics and behavioral propensities that enable digital advertisers to make optimal marketing decisions.
Following this announcement came one from media buying division of worldwide ad agency behemoth WPP, which includes GroupM, that they would be partnering with Triton’s a2x platform to offer a real time audio ad buying technology to ad partners. According to coverage of this announcement in AdWeek, Triton Digital has access to digital audio inventory from publishers like Pandora, Cox Communications, NPR, and Slacker Radio, though not all publishers are yet on board for RTB (real time buying) advertising.”
While banner ad exchanges have been around for a long time, both the launch of an automated real time buying solution for streaming audio ads, and the partnering with a major worldwide ad agency buying group are major announcements that hold the promise of having a significant impact on the online audio marketplace. It will streamline cross platform integration of streaming audio ads which in turn will stimulate spending.
Fred Wilson, a partner in the investment firm Union Square Ventures, is a music lover and his company is invested in several companies in the streaming audio space including SoundCloud, Turntable.fm, and Targetspot. Wilson has been thinking and talking about monetization of streaming audio services, and his ideas are worth repeating.
In a recent interview, Wilson talked about advertising as a revenue model for streaming services. He sees the radio advertising market, pegged at $17 billion, moving online as listeners transition more and more to listening on smartphones. As that happens, services like Pandora, Rdio and Songza benefit, but so do artists.
In his blog post this morning, Wilson writes about online ad revenue models, and it’s a very interesting post for anyone in the business. He outlines the complexity of the online ad marketplace, and concludes that scale is a very important factor for success in the advertising revenue model. Dollars are limited, and with more and more services going after them, rates are dropping.
Pandora is certainly the service that is best positioned to test this out – they have the scale and are aggressively pursuing an ad revenue model. Each time they gain a dollar in advertising from the general $17 billion radio revenue pool, artists win too, because they get paid for music played by Pandora, but not for music played by broadcast radio. Right? So that means the artists and their labels should want online services which are pursuing ad revenue models to succeed, doesn’t it? Just sayin…
Coca-Cola’s efforts to target teens in South and Central America include a personalizable streaming platform, Coca-Cola.fm. While it is not available in the US, Coca-Cola.fm apparently targets teens, according to the press release: Coca-Cola.FM is a platform through which teens can also develop their own creations — a radio station in Mexico on which they can talk, be listened to and communicate with the world through their musical preferences.
The station is also available in Brazil, where an innovative new marketing effort has just been released. With the help of ad agency JWT, they’ve turned the cover of popular teen magazine Capricho into an ad for the streaming platform that turns into an iPhone speaker. Watch this…
Michael Robertson is a serial entrepreneur who has spent a lot of time thinking about on-demand streaming business models. An outspoken guy who is a perennial favorite at RAIN Summits, he’s often out in front with new ideas. Ubertalk, his latest online platform, is no exception.
UberTalk combines programming from thousands of radio stations into a fast, standardized, easy to use guide. Shows are crowd ranked so that the most popular shows are displayed at the top. Listeners quickly sort by category to dig deep into a particular content area they like (sports, politics, etc).
“Radio needs to be reinvigorated and making it easy to find shows and play them would be a tremendous boost to radio programming online.” says Robertson. “My goal is to bring the programmed radio business into the internet era and UberTalk is a big step in the right direction.”
Ubertalk lets the listener access shows as they are being played, or record them for time-shifted listening at other times. Robertson says mobile apps are coming soon.
This is a deep guide to talk radio programming, paired with a nifty time shifting tool that enables listeners to listen to that programming when and where they want it. It has the potential to bring talk radio into an on-demand space which could greatly increase its audience. May they thrive..
Internet radio stations that neglect to offer programming for hispanics are missing out, since of the leading demographics in terms of mobile usage, smartphone penetration and web radio listening. One in four Hispanics reported listening to Internet radio in the last 7 days, compared to about 18% for the general population (in a US based study by The Media Audit).
One streaming service that has been catering to that market for a long time is Batanga, which launched in 1999. I spoke with the guys who started it a few times about joining the Net Radio Sales network, but they always assured me that they were doing just fine on their own. In 2005 they merged with a company called Planeta out of Miami Florida. They recently announced upgrades to their platform that enhance interactivity - allowing users to build digital radio stations by adding the songs and artists they love, offering similar sounding songs, and excluding the music that they don’t want to hear. Other new features include lyrics and more songs.
Meanwhile Pandora has been paying close attention to the Hispanic portion of their audience, which accounts for 20% of their overall audience, according to AdWeek. Reporting on a discussion hosted during Advertising week recently, AdWeek quotes Pandora sales vp Priscilla Valls, who said that 80% of Pandora’s Hispanic users are on mobile devices. Pandora plays 7,000 latino artists in its offerings. While Pandora does not ask for race or ethnic background in its listener profile, but does conduct a yearly survey among listeners for supplemental information for advertisers. This info enables them to target Hispanics on behalf of advertisers.
“We have a variety of marketers who advertise to that audience in Spanish, Spanglish and in English,” Priscilla Valls, a vp of ad sales for Pandora…. “What we are finding is that brands are using their general budgets to also reach a Hispanic audience.”
With 20% of their audience speaking Spanish, Pandora is hip to hispanics…