Yesterday SiriusXM launched their new personalized streaming platform MySXM, a streaming option available to its subscribers for an add-on fee. The service features 50 channels that can be adjusted using “slider bars” to suit the listener’s personalized tastes. It’s described as more interactive than Pandora, with on-demand features that go beyond what Pandora offers. Backend music intelligence platform The Echo Nest provides the service with its personalization, and Omniphone provides cloud based services.
Make no mistake, SiriusXM is still a satellite company, and this new offering is all about protecting its subscriber base. With an estimated 120 million folks in the US listening online in the past month, streaming is the fastest growing radio platform. Offering that as an option is a way to preserve its subscriber base.
According to year end reports, SiriusXM had close to 24 million subscribers at the end of last year, while Pandora has 200 million subscribers, 70 million of whom are actively monthly users. SiriusXM does not provide information other than subscribers.
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 (firstname.lastname@example.org). 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!
Forty Five percent of Americans now listen to online radio occasionally, at least once a month, according to the newly updated Infinite Dial Study by Arbitron and Edison Research. That translates to 120 million Americans, and it’s a number that grew 6% over last year. The weekly number – Americans that listened to online radio weekly – grew 4% to 33% and roughly 86 million.
What’s more, those weekly listeners reported spending an average of 12 hours a week listening to radio online. Arbitron defines online radio as listening to AM/FM radio stations online and/or listening to audio content available only on the Internet – a definition that I concur with, since I think that’s how consumers define it.
But here’s the big news of the study: Consumers reported spending more than two hours more listening online than they did a year ago! Weekly listeners spend an average of 12 hours a week listening to online radio, versus close to ten hours last year.
The Infinite Dial Study is the best comprehensive snapshot of the growth of online listening. Arbitron and Edison Research have been updating this yearly study for more than ten years, providing the industry with cold hard data chronicling the growth of listening online. Arbitron VP Bill Rose and Edison Research President Larry Rosin will present their study at the upcoming RAIN Summit West on this Sunday April 7th. Hope to see you there!
With more than 5000 stations and 260 genres of music, Live365 may well be the most diverse streaming audio platform on the planet. Live365 offers a platform where folks who want to start their own radio station can do that for an affordable monthly fee that’s all inclusive – streaming, programming tools, royalty coverage, etc.. Monthly costs range from under $5 bucks a month for a station that you and just a few friends can listen to, to $99 or more for larger reach and even the ability to run commercials.
They’ve recently upped their game by offering a new app called Studio365 that lets their broadcasters to manage their radio stations from their mobile device. Among other things, it features a nifty tool called ShoutOut that enables the capability to go “live” on the microphone whenever and wherever a broadcaster may choose. Available for iPhone and Android devices, the Studio365 mobile app lets users create, preview, and manage Shout Out voice messages, set and update station ID and pre-roll messages, update station profiles including title, image, description, review current and historical station listening stats, as well as monitor their station.
Live365 has been around a long time, since 1999, enabling the long tail of Internet radio, with more than 5000 individual stations, including some nifty curated stations by the likes of Carlos Santana, Pat Metheny and Jethro Tull. They’re one of the true pioneers in the space. CEO Hong Lau will join a panel discussion on International Trends in Online Audio at RAIN Summit West, which is just a couple of weeks away – so if you haven’t registered, I hope you will. More info here…
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.
There’s been a lot of talk lately about car dashboards, and connectivity, and the threat that new technologies like streaming may pose for AM/FM, which currently owns all of that real estate. For those of you who read this blog, or attend RAIN Summits, it’s not news that connectivity in cars is impacting dashboards, with more listening options available. Nearly all the car manufacturers have announced partnerships with streaming platforms. Just yesterday Volvo released news that its new connected dashboard, with a 7 inch touch screen and voice activation, will feature TuneIn and Spotify.
The dashboard of the future won’t eliminate AM/FM, instead it will offer more options. Connected, interactive options that enable listeners to choose stations from a mix of delivery platforms. Streaming options alongside HD options alongside AM/FM options, alongside – dare I say it – maybe even satellite options. All-in-one dashboard players.
No one (okay, maybe someone) said, or thinks, that AM/FM will be eliminated from car dashboards. The NAB would never let that happen. More than 90% of the population listen weekly. (Although, that number may drop as other options become available).
After that article appeared came letters and statements from car manufacturers, eager to assure broadcasters that they are not eliminating AM/FM from cars. General Motors Chief Infotainment Officer Phil Abram told Radio Ink that:
“While we are excited about the possibilities of Internet radio services and other emerging services, we understand that AM/FM radio is still a significant source of news and entertainment. In fact, it is an expected feature. We can’t speak for other automakers, but to be clear, GM has no near term plans to eliminate AM and FM from GM vehicles. We are committed to providing consumers innovative services that dramatically enhance the driving and riding experience. We expect AM/FM radio to be one of the choices consumers have in our vehicles.”
There, now doesn’t that make you feel better?..
Dial Global this week announced a partnership with SoundHound that will offer advertisers more interactivity with broadcast radio listeners. SoundHound is a music app that listeners can download to their mobile devices and use to identify songs. Now, advertisers can offer listeners access to exclusive offers and branded audio, video, and Web content delivered on their mobile device through SoundHound.
With this new technology, advertisers will have the ability to provide additional information to consumers via a “second screen” portable device – enhancing the interactivity of their radio campaigns. Reportedly, the consumer does not have to interact with a commercial immediately in order to tap into the “second screen” offering because the information will remain available for a period of time.
As lifestyle shifts toward mobile continue, technology that enables radio campaigns to benefit are essential. eMarketer forecasts the number of mobile shoppers in the US will increase by 24% in 2013 to 118 million consumers and represent 62% of digital shoppers. Over the next four years, the overlap between mobile and digital shoppers will steadily increase as the number of mobile shoppers grows to 174 million in 2016, 80% of all online shoppers.
Mobile interactivity both increases the impact of a campaign as well as the ability to quantify effectiveness. “Until now, radio has struggled to keep pace with the kind of measurable engagement offered by newer digital marketing platforms. Together with SoundHound, we have created a marketing solution that delivers trackable engagement between listeners and brands.” said Ken Williams, President of Dial Global.