As you have probably heard, Google has put their newest streaming music offering into play, calling it (awkwardly) Google Play All Access. Personalizability, interactivity, it’s all here. It’s called “Radio without rules”, according to Chris Yerga, Google Engineering Director, Android, who debuted the new platform at Google I/O, a conference for developers in San Francisco.
Indeed, the new Google Music service is all things – offering a deep catalog of songs available on-demand, as well as all the interactive bells and whistles like new music recommendations, playlist building and sharing, the ability to integrate your own music into the mix. In fact, listeners can add their own music and albums from the service into one library, in one nifty interface.
On the web browser, the offering is the same, and available across all your devices. For $9.99 a month.
So the race to capture subscribers who are willing to pay a monthly fee for unlimited access to all music is on. Spotify has been trying to get folks interested in that for a while by charging a fee for mobile access to their on-demand platform, along with other services like Rhapsody and Rdio.
Google’s ability to integrate its service is of course much deeper – they’re already doing business with just about everyone. The interface looks good, and studies have shown that music lovers are willing to pay a fee for access to music. And people love listening to music online. It’s consistently one of the favorite online activities. So this could be a hit for Google. Could be. But I’m wondering about a few things as well. First, Google is the company that gives content away to consumers and monetizes the traffic – youtube, Gmail, Google voice, consumers are not exactly trained to think about their credit cards when they see that Google logo. Second, Google has had a few stops and starts when it comes to announcing amazing new online music platforms. Like Google Music take one (Discovery), and take two (Music Beta).
One thing that is consistent is Google’s inability to come up with a spicy, enticing name. Google Play All Access? It’s a horrible name for a pretty nifty streaming music interface…
It’s a week for streaming services to boast about the size of their audience, with both Slacker and iHeartradio making announcements that they have grown. Slacker, which relaunched with a new design and offerings in February, had a nice showing in the March ranker of Webcast Metrics that we saw last week. Now we’re hearing more details on that from a press release which reports that six million new listeners have signed up since that relaunch in Feb, with 3.5 million of them on mobile devices. Slacker has also picked up 100,000 paying subscribers since their relaunch, a 1.6% conversion rate.
In the release CEO Jim Cady says that “Slacker is the only digital music service that is gross margin positive on every listener – whether they’re ad-supported or a paid subscriber.” Gross margin positive is good – an indicator that a business is operating efficiently and shows promise. So this is a good thing. I’m not sure how Cady can be sure that they are the only digital music service that can say that – given that only Pandora’s accounting data is public. Some other cranky folks might argue that satellite services are digital as well.. But nonetheless, Slacker says they are doing well, and that’s good for them and the industry. (Now if only they would change their name..)
Not to be outdone, iHeartradio told us yesterday that they have reached the 30 million mark in terms of listeners, which is a very big number especially given the fact that they were at 20 million 7 months ago. iHeartradio has enormous capacity to ramp up its audience via its extensive network of AM/FM listeners.
Mobile was the fastest growing segment of streaming audio consumption in the March 2013 ranker just released by Triton Digital. Mobile listening accounted for 56% of all audio consumption in March 2012. According to the report, we have crossed the threshold where over half of all listening is consumed on mobile devices.
In March 2013, Pandora began capping mobile listening at 40 hours per month. As a result, we see a 3% drop in mobile listening for Pandora during the Monday through Sunday 6:00am to midnight daypart from March to February. During the same time period, we see a 23% increase in Pureplay mobile listening and a 5% increase in listening to AM/FM streams.
Slacker meanwhile picked up 18% during the February to March period, which could be a result of the capping by Pandora. In mid February Slacker launched a new interface with more personalized tuning options, as well as a tv ad campaign aimed directly at Pandora, which was timed perfectly with Pandora’s decision to cap mobile listening at 40 hours per month.
RAIN: Radio and Internet Newsletter points out that “While Pandora did slip 4% overall from February, its AAS is still 39% more than 12 months ago. Among broadcast streamers, Univision had a strong March (up 22%), as did the NPR Member Stations group (up 16%).” Read more of their analysis here.
While these numbers refer to US listening, streaming audio measurement, as well as Mobile streaming strategies, will be panel topics at our upcoming RAIN Summit Europe in Brussels two weeks from today. Hope to see you there!
RAIN Summits, the premiere educational and networking events for the Internet radio and online audio industry, have announced the agenda for RAIN Summit Europe on May 23 in Brussels. The largest gathering of its kind in Europe, RAIN Summit Europe’s speaker list features a diverse list of web radio professionals from most countries and provides an excellent opportunity for the industry to share expertise.
RAIN Summit Europe will take place at the award-winning Hotel Bloom! in Brussels. The pan-European conference will be a day-long event, including thought provoking panels and presentations, insightful speakers, and engaging networking opportunities. Executives from many different European countries will share thoughts and ideas on the future of radio in the digital world.
RAIN Summit Europe will feature a list of speakers who are experts on various aspects of the field of streaming radio. Featured speakers at the conference in May include:
- David Deslandes, Deezer, France
- Simon Gooch, SBS Radio Sweden/Radio Play, Sweden
- James Cridland, Media UK, United Kingdom
- Ali Abhary, Spectrum Medya, Turkey
- Kjartan Slette, WiMP, Norway
- Christian Schalt, KISS FM/Radio Service Berlin, Germany
- Jan-Willem Brüggenwirth, 538Group, Netherlands
- Jean Pierre Cassaing, Havas Media, France
- Alain Reyes, NRJ Audio, France
- Joel Ronez, Radio France, France
- Steve Whilton, Last.fm, United Kingdom
- Caroline Grazé, NRJ, Germany
- Lubor Zoufal, Lagardère Active ČR, Czech Republic
- Paula Cordeiro, RTP, Universidade Tecnica de Lisboa, Portugal
“This agenda features an excellent complement of speakers from across Europe for a full day of panels, presentations and networking that endeavors to advance the business prospects for online audio,” said Jennifer Lane, President of RAIN Summits.
“In Europe today, Internet radio is an extremely vibrant and fast-growing media segment, with many of the top AM/FM broadcasters actively participating in the category along with a number of innovative entrepreneurs,” said Kurt Hanson, Publisher of RAIN: Radio and Internet Newsletter. “Last year’s RAIN Summit Europe, in Berlin, attracted a very high caliber of both speakers and attendees. This year, we’re excited to bring RAIN Summit Europe to the business capital of Europe, Brussels, and our agenda is shaping up to be our best yet!”
For more information on the agenda and speakers, visit the RAIN Summit Europe website
New research presented by Russ Crupnick of NPD Group at RAIN Summit West underscores the promotional value of AM/FM radio relative to song sales. More than half of the folks surveyed named “announcements on AM/FM radio” as the primary thing that would make them shop more for new music.
Given the drastic drop in song sales revenue in recent years, that’s an important fact. In 2005, 73% of the US Internet population bought at least one cd, and in 2012 that number was 35%. Some of those purchases were replaced with song downloads, which jumped from 9 to 23% in that same period.
Meanwhile, the same population said that they stopped illegally downloading music because they could listen to it on the radio – online (45%) or on the air (33%).
So what does all this mean? One way to look at it is that radio – both on-air and online is one of the most important weapons the music industry has for driving revenue…
Rain Summit Europe is Thursday May 23rd in Brussels. Join us for a great day of panels and presentations, plus excellent networking at the largest gathering of online audio professionals in Europe. Hope to see you there!
On the heels of a highly successful RAIN Summit West in Las Vegas last week comes the announcement of the agenda for RAIN Summit Europe on Thursday May 23rd. Web radio professionals from across Europe will gather to discuss all facets of Internet radio and online audio. Executives from all the key businesses in the industry will participate in panel discussions, make presentations, and advance the development of the business of online audio across Europe.
Topics on the agenda will range from business to technology to programming and include best practices for measurement of online audio, multiplatform content distribution, mobile streaming, sales strategies, and programming for audience growth. Presentations will be presented by James Cridland of Media UK, David Deslandes of Deezer, and Simon Gooch of SBS Radio Sweden/RadioPlay.
The confirmed speaker list includes an impressive mix of Internet radio and online audio executives, with more being added:
- Ben Drury, 7Digital
- Hakan Kostepen, Panasonic
- Matthew Carver, EGTA
- Kjarten Slette, WiMPmusic
- Jan-Willem Bruggenwirth, 538.nl
- Christian Schalt, rs2 and KISS FM, Berlin
- Jan Poelmann, RMS
- Alain Reyes, NRJ
- Jöel Ronez, RadioFrance
- Ali Abhary, Spectrum Medya
- Robert Proctor, Audioboo
- Steve Whilton, Last.fm
- Patrick Roger, Triton Digital
- Holger Weiss, Aupeo
Registration is limited for this event, which was sold out last fall in Berlin. To register for the event using either Eventbrite or Amiando, click here. To submit a speaker proposal, send me an email (email@example.com). Hope to see you in Brussels in May!
The following is a guest post by Angus M. MacDonald, a digital media attorney.
Last week, SoundExchange publicly released its Annual Report (Draft) for 2012. According to the report, SoundExchange’s 2012 collections from all statutory services amounted to $502.2 million – yes, a half-billion dollars! And it was another impressive year-over-year increase in royalty collections for SoundExchange. For 2011, SoundExchange collected $372.2 million, meaning that it collected $130 million (or 35%) more in 2012 than it did in 2011. See SoundExchange’s Annual Report (Draft) for 2012, p.7.
However, as discussed below, Pandora accounts for all of SoundExchange’s revenue growth. In its most recent 10-K filing (released a few weeks ago), Pandora paid 55.9% of its revenues to SoundExchange for the fiscal year that ended January 31, 2013. See Pandora’s 10-K, p.22 (“For our fiscal year ended January 31, 2013 we incurred SoundExchange related content acquisition costs representing 55.9% of our total revenue for that period.”). According to the same 10-K filing, Pandora’s total revenues last year were $427.1 million.
Based on the above figures, Pandora paid SoundExchange over $238.7 million ($427.1 million multiplied by 55.9%) in the 12 months that ended January 31, 2013. That $238.7 million figure represents 47.53% of SoundExchange’s total royalty revenues ($502.2 million) in 2012. [NOTE: Because SoundExchange uses the calendar year for accounting purposes while Pandora uses a fiscal year that ends January 31, this estimate may be slightly off. Using an alternative method that attempts to estimate Pandora’s revenues for the calendar (instead of fiscal) year likely yields a higher percentage – just about 50% – in term of Pandora’s share of SoundExchange’s total collections for 2012.]
While it appears to be an impressive feat for SoundExchange that its royalty collections increased in 2012 by $130 million, it is important to note that Pandora’s royalty payments to SoundExchange also increased in 2012 by about $132 million – i.e., $136.3 million in FY2012 vs. $238.7 million in FY2013. Therefore, ALL of SoundExchange’s increased revenues for 2012 can be attributed solely to increase in royalties paid by Pandora. Another interesting fact: Pandora paid nearly as much in royalties for its FY 2013 (i.e., $238.7 million) as it made in total revenues for the previous year (i.e., $274.3 million for FY 2012).
Pandora clearly represents a large share of SoundExchange’s business and, more broadly, the total streaming royalty revenue collected in the U.S. (which was estimated to be $1.032 billion in 2012 according to a recent report by RIAA). As such, Pandora’s market share has important implications for the upcoming royalty rate negotiations and proceedings, known as Webcasting IV, which will commence in January 2014 before the Copyright Royalty Board. With Pandora’s ever-surging listening hours and royalty payments, SoundExchange (as well as the record labels and artists who split the royalties collected by SoundExchange) need a healthy Pandora as much as Pandora needs a reasonable Pureplay-like rate for the next royalty term (2016-2020).
There are several other semi-interesting tidbits from SoundExchange’s Annual Report, including its continued increase in headcount over the past few years (55 employees in 2010, 72 employees in 2011, and now 97 employees in 2012) – probably necessary to process those whopping monthly checks from Pandora! However, despite the additional headcount, SoundExchange has successfully lowered its administrative rate over the past several years (6.7% in 2010, 5.3% in 2011, and 5.0% in 2012), indicating increased efficiencies by SoundExchange in collecting, processing and distributing the royalties over the years.
 SoundExchange collects statutory royalties from many different types of services – including noninteractive Internet radio (Pandora, etc.), satellite (Sirius XM), cable subscription services (Music Choice), and business establishment services (DMX). Therefore, this 47.53% figure certainly would be much higher – I’d bet close to 75% – if you look only at SoundExchange’s Internet radio revenues, which are not separately broken out in SoundExchange’s Annual Report.
The views expressed in this article are solely Mr. MacDonald’s and should not be attributed to his employer or clients.
RAIN Summit West this Sunday in at the Las Vegas Hotel will host a panel discussion called The Song Plays On, a discussion of royalty issues, including Brad Prendergrast, SoundExchange; David Levin, BMI; Artist Patrick Laird, Break of Reality; Rusty Hodge, Soma fm; Ted Cohen, TAG Strategic; and moderator David Oxenford, WBKLaw. Hope to see you there!
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…
The competitive landscape of online music services had a busy week, with everyone out and about in Austin at SXSW wooing press and fans. Just 3 months after announcing that they had reached 5 million subscribers globally, Spotify announced this week that they now have 6 million paying subscribers, and declared themselves the fastest growing music service ever. Their presence in Austin featured a house, painted Spotify green, where they hosted live bands.
Rdio announced this week that they are expanding to still more countries. Their service, which new subscribers can hear ad-free for the first six months, is now available in United Kingdom, Australia, Belgium, Canada, Denmark, Estonia, Finland, France, Netherlands, New Zealand, Norway, Portugal, Spain, Austria, Iceland, Ireland, Italy, Latvia, Lithuania, Mexico, Sweden and Brazil, in addition to the US.
Pandora hosted a “Discovery Den” that featured many well known artists, some of which also made an appearance at iHeartRadio‘s SXSW party. Rhapsody had a party, and hosted a panel as well: ‘Streaming Music: A River of Cash or up the Creek.’ The panel will bring together perspectives from all sides of the issue to examine what roles streaming music services can play for artists today and in the future. Hats off to them for that.