Last week Microsoft began offering updates to the popular Xbox Live gaming system that included, among other things, Last.fm connectivity. That integration has gained CBS owned Last.fm one million new subscribers in one week.
It’s the biggest gain in listeners yet for the social music service. The new listeners have already listened to 120 million minutes of music.
This could be the kind of boon for Last.fm in terms of audience growth that Pandora saw with its iPhone app. According to an eMarketer interview with Pandora’s Jessica Steel last May, Pandora was the most downloaded iPhone app ever, and they had picked up 4.5 million listeners from the mobile platform. Last spring there were 20 million Xbox Live units sold, and around the same time Apple had sold 30 million iPhone/iTouch.
This news comes as one more example of the fact that people want to listen to streaming music on their connected devices, whatever they may be. It’s an enhancement for Xbox that turns out to be a boon for Last.fm – and Internet radio…
News Corp owned MySpace will purchase independent online music service Imeem, in a deal which is reported to be $1million in cash. Imeem has been in financial trouble for a while, and has run through an estimated $30million in investor dollars.
Among the investors, all four major record labels, although earlier this year Warner Music wrote off its investment in the service. In 2007, Imeem became the first ad supported on-demand online music service to negotiate deals with all four major labels. Those deals included equity which made partners of the four major labels. MySpace also has partnership deals in place with the four major labels.
A few months ago MySpace acquired online music service iLike, with 50 million registered listeners, for a reported $20million. Comscore estimated that Imeem had 16 million unique visitors in September. It’s impossible to compare these two numbers except to say that it doesn’t sound like Imeem is a lot smaller than iLike to me.
MySpace now owns two of the five online music services that announced partnerships with Google’s new music platform. The way that works is that Google drives traffic to partner sites who play the music and pay the royalties.
Recently Spotify delayed their US launch due to problems negotiating a license for ad supported on demand streaming with the record companies. Plug that info into the fact that Imeem was about to get acquired by MySpace for so little, and it’s easy to understand why Spotify is meeting with some opposition. Seems like the record companies want to limit their exposure on the ad supported revenue model…
Music sales have been changed by the Internet. That’s perhaps the most obvious statement I’ve ever written on Audio4cast. Nonetheless, it’s interesting to look at how the Internet has impacted music sales, and a post on Nielsen’s blog recently did just that, discussing a recent article in Billboard magazine.
Individual tracks accounted for 57% of all digital music sold in 2008. More intriguing is the fact that the top 200 tracks accounted for 14.5% of sales in 2004 and rose to 15.8% in 2005, 17.1% in 2006 and 2007 and 17.2% in 2008. Through October 25, 2009, the top 200 tracks’ share stood at 18.7%.
Not exactly what you were thinking, right? We all think of the Internet as fostering diverse listening and independent artists. So why are sales concentrating more on the most popular songs, not less?
It turns out that popular tracks may be benefitting from a “herd effect due to the viral nature of the Internet. The awareness generated by that small number of songs could drown out less popular songs.” In other words, top 40 playlists are still driving music sales. In any week, one of out four songs sold belongs to that top 200.
On the other hand, Album sales are trending in the other direction. “The top 200 digital albums have accounted for a smaller share of total digital album sales since 2004.” “The top 200 digital albums have shown an opposite trend in market share, steadily dropping to 21.9% in 2008 from 28.7% in 2004.”
Listeners that purchase albums online are listening to fewer hit albums and more eclectic album offerings, while those that purchase single tracks are concentrating on the top 200 songs more and more. The numbers show that it’s not exactly the expansive and expanding marketplace many have imagined. While the Internet has become the place to find and listen to music by independent and unknown artists, the diverse offerings have yet to impact digital song sales, which remain concentrated on the hits.
One category that is not suffering this year is entertainment subscriptions, according to new information released by NPD Group. According to their new study, overall per capita spending on entertainment subscriptions rose by nearly 7% this year.
As of August 2009, 81 percent of U.S. households subscribed to a television service (satellite TV, basic/premium cable, or fiber-optic television service). A similar percentage of households (76 percent) paid for Internet subscriptions. Seventeen percent subscribed to an online music service or satellite radio; and 14 percent subscribed to online gaming subscription services.
While subscriptions to newspapers and magazines have declined, the rapid growth of smartphone sales has driven an increase in mobile data plan subscriptions: 9 percent of U.S. consumers had mobile data subscriptions this year, versus just 6 percent last year.
It’s not just limited to online or connected content delivery either. Fourteen percent of consumers subscribed to a home-video subscription service, like Netflix, this year, which is 2 percentage points higher than last year.
Recently, several Internet radio station owners have quietly told me the same thing. Listeners are willing to pay for content, particularly if it comes with a premium such as better sounding delivery, or no ads. It’s becoming a decent revenue stream for those that have suitable content and a loyal listener base…
Clear Channel has launched a new streaming channel on iHeartRadio for the new film Pirate Radio. The movie, about renegade rockers in the 1960s off the coast of England, is full of great music by The Beatles, The Stones, Beach Boys, Dusty Springfield, The Who, Jimi Hendrix, Smokey Robinson, David Bowie, Otis Redding, Cat Stevens and more.
The movie is about a group of DJs who “go rogue” and start a radio station on a boat in the middle of the Northern Atlantic, playing rock records and breaking the law all for the love of music. The songs they played united and defined an entire generation and drove the British government crazy.
It’s a great concept for a station and a perfect promotion of the film. The station has a website where you can listen, watch movie trailers and video clips, check out pictures and buy the soundtrack of the movie. I love the integration of on and offline media used to promote a real station based on a fictional retelling of a story about a real station….
NOTE: For still more irony, Rusty Hodge from Soma.fm let me know that the real station, Radio Caroline, is still streaming online.
Spotify, the European on-demand music streaming service that has taken Europe by storm, will apparently delay a US launch. For several weeks now there have been reports that the major labels were putting pressure on Spotify to abandon a free, ad-supported streaming model. The New York Times recently reported that major labels, already involved as backers with free ad-supported services like MySpace and Imeem, aren’t eager to license their catalogs to Spotify on that basis.
And they have a lot to say on the matter. “On-demand services have to negotiate private deals with the labels – there is no compulsory license, and the deals are not public.” according to David Oxenford a legal expert in streaming audio licensing.
But how much is the new Google music platform impacting this? Google Music is now driving listeners to Imeem and MySpace/iLike – the two services that are licensed by the record labels to stream on-demand. With that deal in place to support the two services that the record labels are already invested in, would they want to see Spotify come in and disrupt the market for on-demand services? Given some time, and the preference they’re getting from Google Music, Imeem and iLike (owned by MySpace) should be able to build their brands as destination sites for on-demand music.
Instead, the record companies would like to see Spotify offer their service on a premium basis, to those that subscribe. “We like Spotify as our partner in Europe, but we would like them to move more toward a paid subscription environment,” said Thomas Hesse, president of global digital business at Sony Music, as reported by the New York Times. Word is, Spotify is not happy about coming to the US with a paid-only model, hence they have delayed their launch.
Late last week AndoMedia released audience data for their universe of measured Internet radio stations, debuting some new definitions and two rankers, one defining domestic US listening. The changes were greeted with disapproval from the advertising community, particularly the radio ad community. Ando, it appears, had misjudged that segment of the buying community’s attachment to traditional radio audience metrics such as AQH and Cume.
“The changes were made with the best of intentions,” according to Mike Agovino, Chief Operating Officer, Triton Media, who owns AndoMedia, “but they should have been better communicated. Now people are confused and upset, and they should be. We have to do a better job of communicating with buyers and agency people.”
To that end, AndoMedia hosted a 45 minute webinar today to review the new metrics and the thinking behind them. Patrick Reynolds, Sr. VP at AndoMedia took us slide by slide through the new terms and definitions, emphasizing several times that these new metrics have been added to the measurement terms already provided by Ando. AQH and Cume are still available for stations and agencies to use if they prefer (this was definitely not effectively conveyed in the release.)
I agree with Agovino that this could have been avoided with better communication upfront. I think Ando’s intentions in adding new measurement terms were good – they’re seeking to enhance the data to reflect the fact that they’re providing active actual data rather than estimates. Reynolds says they are seeking to make their measurement platform fair, accurate and consistent for all stations. Unfortunately, they missed a step in releasing the information, failing to presell it properly to key parties. I think they were also the target of some mud slinging by their competition, those who have favored less accurate, estimated ratings.
I hope the industry will resume its focus on developing an easy to understand and use single measurement platform for the industry. Let’s move on…
Big news for HD Radio this week is that it’s available on iPhone. While the HD Radio app for iPhone is free, listening requires the purchase a Gigaware HD Radio receiver accessory, which costs $80 and is only available at Radio Shack.
In this interview with wsj.com, iBiquity chief executive Bob Struble mentions that first HD Radio went portable with Microsoft’s Zune, and now extends its mobile offerings to Apple’s incredibly popular iPhone. In addition to being able to listen to your favorite stations digitally, the app enables you to tag songs that you hear and like for future purchase.
HD is simply a brand name for the digital upgrade to AM and FM, says Struble. AM/FM is the last analog medium in the US, and HD is the digital version of those offerings.
The question is, will listeners adopt the new HD technology and move to HD devices and listening, or will they shift directly to an alternative like Internet radio? Streaming Pandora, for example, is free for everyone on iPhone. The reason to purchase the HD Radio iPhone accessory, according to Struble, is that it will allow listening to HD Radio stations on your iPhone even when you don’t have a wifi connection. (but your purchase of the iPhone required you to pay for a monthly data plan that gives you unlimited broadband…)
He hopes they will convince Apple to build HD Radio receivers directly into iPhones and iPod Touch devices, which would eliminate the need for additional hardware. It sounds far fetched to me, but a while back I was betting against FM on iPhones…
It doesn’t take a crystal ball to know that the web is moving to mobile devices. The US mobile web audience grew by 1/3 in a year, according to Nielsen Online. Pandora’s Joe Kennedy recently revealed that Pandora sees half a million listeners a day just on its iPhone and BlackBerry applications, tuning in for an average of an hour and 45 minutes a day. Bill Goldsmith, founder of Radio Paradise, another online station with substantial following, said 8 to 10 percent of his station’s audience is listening on mobile devices.
The new battlefield of online radio is streaming to mobile devices, according to Vincent Grenier, VP of Marketing for Stream The World. With a mobile app, you can build a new environment around your brand and leverage new ways to monetize says Grenier.
Recent studies have shown that consumers are interested in receiving location based advertising on their mobile devices. Restaurants, weather, clearance sales, and pizza all qualify as items consumers would like to hear about on their mobile devices. Delivering locally relevant ads is a perfect fit for radio, says Grenier. “Stations should become a reliable source of information … by providing on-time, on-place advertisements as SMS, direct messages, and displays….delivering mobile alerts as a service. It’s a perfect fit for your local advertisers.”
It’s important for stations to have mobile platforms in place that can deliver audio programming, interactive elements, and advertising. As the mobile audience surges over the next few years, mobile web spending will outpace online ad spending. Radio – particularly online radio, is poised to grow exponentially as a medium that is as mobile as the devices themselves. It’s never been more important to have a mobile strategy to take advantage of this imminent growth.