A few weeks ago I was driving in my car listening to NPR during a pledge drive. As I listened to the announcer hawk mugs and even special solar/crank powered radios in exchange for signing up for a monthly “pledge” and heard him referring to donors as members, I realized that public radio is actually selling subscriptions, but calling it something else.
As we know, NPR is an audio service supported by its members (as well as some other revenue sources). In 2011, which was the most recent year I could find info for – NPR received an average weekly donation of just under ten bucks per listener per week. (That’s the total $ amount of pledges divided by listeners and weeks.)
While Pandora One and Spotify struggle to get users to pay less than $10 a month for their service, NPR manages just fine, netting 4 times that per listener.
Why is NPR is so successful at getting listeners to pay for programming? For one thing, they don’t call them subscription fees. Instead, they call them pledges – a far more honorable term, and they make every listener who donates a member, and send them a hat or a mug. It’s a clever marketing approach!
What else are they doing that online audio subscription services can do as well? Well, for one, they hold annoying on-air pledge drives, where they stop the programming, not for a few short commercials, but for highly intrusive on-air begging by personalities. It’s really obnoxious, and it works. Listeners respond.
Other tactics that NPR uses to extract donations – err, I mean pledges – from its listeners include bribery (as in the mug, hat, or solar powered radio mentioned above), flattery (our listeners like you are so smart), making listeners feel guilty, and – this is the best one – threatening to continue the on-air fundraising tirade unless everyone calls in with pledges right away.
So what can subscription services learn from NPR? I think the membership approach is a good one – remember the old American Express campaign “Membership has its privileges?” Creating a strong brand that people want to associate themselves with, and then selling that association – that seems to be a formula that works for public radio and a strategy subscription services may want to go to school on…
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.
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…
I’ve always known that my friend Sandy Smallens was smart and innovative, so it comes as no surprise that one of the most innovative ideas to come out of Spotify involves him. Smallens is co-producer of the new original content series Spotify Landmark, which is in-depth audio content that provides “the story behind some of the greatest moments in music, told by the people who made them.”
The first series went live in mid-September and tells the back story of the making of Nirvana’s “In Utero” album – to celebrate the 20th anniversary of the making of that album. The series is divided up into short segments, and “each show blends intimate interviews with artists, producers, industry figures and celebrities to create a listening history of legendary albums, concerts and events.”
This is the kind of innovative content that will set a streaming platform apart. Original content can expand that platform’s relationship with listeners as well as artists, benefiting the brand in many ways. It’s also the kind of programming that especially suits Smallens, Spotify’s head of artist marketing and original content and Spotify Landmark’s co-producer, who is both a musician and a natural born marketer with a passion for streaming. I worked with him years back when he was involved in early digital platforms at CBSRadio and then Entercom. It looks like he’s found a great way to spend his time at Spotify…
Amid all the iTunes Radio hype in September came an announcement from Songza that they have secured $4.7 million in funding. Among the investors was Amazon.com, which bought Amie Street, founded by Songza founder Elias Roman, in 2010.
Songza’s not the biggest streaming service, but they’ve been quietly innovative in the past few years, catching my attention a few times. Eric Davich, the other co-founder of Songza, recently joined the Streaming Music Trends panel at RAIN Summit Orlando and turned out to be a great addition, smart and spunky, with plenty of opinions.
Songza will use the new funding to develop its native advertising solution. “With this funding, we’re scaling our native advertising solution to make brand-to-customer interactions more engaging for customers and more successful for brands,” said Elias Roman, co-founder and CEO of Songza.
Songza’s approach to streaming music is to offer music based not on genre or artist, but on activity or mood instead. Going for a run, getting ready for a date, having a party, Songza’s got options for all of those and a lot more. The plan is to develop high impact 7 second ads that work well for both listeners and advertisers within the context of the programming.
Recent info says that Songza has 4.8 million active users. They have 24 million songs in their database, as well as a slick interface and a unique approach. And they’re concentrating on monetizing their audience in a way that benefits advertisers and listeners. All that makes Songza one to keep an eye on. For more, check out an interview that co-founder Elias Roman did on CNBC not too long ago..
Classic Rock tops the list of most popular genres in a survey of people who listen to online radio at work. Followed closely by Rock and Country music, Classic Rock songs are the ones that more than 1000 respondents said they listen to online and at work. The new info is part of an at work study done by Radionomy and Edison Research and released today. Based in Brussels, Belgium and San Francisco, Radionomy is one of the largest user-generated radio station platforms for producers, listeners and broadcasters around the world. This new study was designed to encourage producers of Internet radio stations on their platform by providing them with more information on what users want to hear.
The study finds that most people listen to Internet radio to hear songs they know – 86% tune in for that reason. But they also like to discover new music, as 72% pick that as a reason to listen as well. Fewer folks said they tuned in to hear DJs and local news online. More than half listen to 2 or 3 Internet radio stations a week, and more than three-quarters listen in other places outside of work as well.
“The desire on the part of listeners to simultaneously hear their favorite music and also be exposed to songs that they haven’t heard before but still appeal to their tastes creates an interesting opportunity for producers,” said Radionomy’s Thierry Ascarez. “We believe that those who can achieve a balance of giving people what they already want, and also new things that will appeal to them based on their established tastes, will more meaningfully connect with their audiences.”
You’ll be able to hear more about this survey at the Radio Show in Orlando next week. And you’ll be able to get a lot of very useful information about online radio and digital audio at RAIN Summit Orlando on Tuesday September 17th at the start of the show. For more info on RAIN Summit Orlando, or to register, click here. To save a few bucks use the promo code Audio4cast (you have to register before you get there to get the discount). Hope to see you there!
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.
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.
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..
Clear Channel’s iHeartRadio has added an interactive platform for talk radio to its offering. The newly announced iHeartRadio Talk will feature on-demand listener-created talk content alongside popular news, celebrity and entertainment “audiosodes.”
“Listeners who have been accepted into the iHeartRadio Talk library will be able to record and instantly share their perspective on any topic they choose – it’s basically like offering ‘audio Twitter.’” said Brian Lakamp, President of Digital, Clear Channel Media and Entertainment, “We are giving a voice to the everyman, and at the same time are enabling iHeartRadio users to discover and enjoy thousands of ‘audiosodes’ from the best talent around the country.”
Through a partnership with Spreaker, a platform that enables listeners to create personal radio broadcasts, iHeartRadio will also feature user generated content. iHeartRadio Talk will offer “Daily Pulse,” a customizable Talk channel featuring the most up-to-date news and culture highlights, which allows users to add content that is most important to them. The service will also enable listeners to search for their favorite talk programming from ABC News, American Public Media, TMZ, the Wall Street Journal and others, not to mention Clear Channel’s own featured talk show hosts like Ryan Seacrest, Glenn Beck, Rush Limbaugh, Sean Hannity and others. Local news weather and traffic reports can also be integrated into the offerings.
Adding talk programming and user generated content to the iHeartRadio platform greatly expands the offering and is a nod to several popular platforms like Stitcher, SoundCloud, and even NPR, which has a huge talk presence online. It’s a smart move for iHeart that greatly expands their service and probably makes them a more interesting standalone platform for dashboard integration as well – something that I’m sure was part of the plan..
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.