Rhapsody’s IPod Killer
While big online music services like Pandora, Spotify and others (Last.fm, Guvera, MOG…) are getting a lot of attention these days, Rhapsody is often overlooked. Rhapsody has been around longer than the others – they launched in 2001 as the first music service to offer streaming on-demand access to a large library of digital music. Prior to 2001 they were a service called Listen.com.
In 2007 Rhapsody America became a joint venture between RealNetworks and Viacom. In February 2010, Rhapsody’s owners announced their intention to restructure the company into a fully independent corporation, a move that took place last week with Viacom and RealNetworks, as well as Universal Music Group, maintaining positions in the new company.
Over the years, Rhapsody has tried lots of things, from offering songs that had to be played in their player to DRM free all-you-can-eat offerings. They’ve partnered with Verizon, Yahoo, and iLike/Facebook. The service has over 9 million songs in its library, and for a monthly fee of ten bucks they’re available for unlimited on-demand streaming. Yet, according to the LA Times, its paying subscriber base dwindled from 800,000 in early 2009 to 675,000 by the end of the year.
This week, on the heels of their reorg, Rhapsody launched a new iPhone app that should spur a bunch of new subscriptions. In addition to unlimited on-demand streaming for ten bucks, subscribers can download their favorite Rhapsody playlists to their iPhone, iPod touch or iPad so they can listen anytime — even when they’re not connected to the Internet. From their blog: “Simply launch your Rhapsody app, open the playlist and click the Download icon. You’ll need either a 3G or WiFi connection to do this initially, but once the songs are saved to your device, you can rappel into the deepest crevices of the Grand Canyon and still be able to play them back.” For ten bucks you get to do this on one device, for $14.99 you can download your playlists to up to 3 devices.
Access to 9 million tunes, streaming on demand plus untethered downloads of my favorite songs onto a mobile device. It’s the kind of thing that could make listeners trade in their ipods. (And there’s talk that Apple bought Lala to launch something similar). It really puts Rhapsody in a whole new category, but will the listeners follow? Only their history makes me wonder..
Jacobs Media: Pandora’s A Threat To Broadcasters
In the Internet radio game, Pandora’s the one to beat. So says Jacobs Media’s new Tech Survey of 26,000 rock radio listeners in the US. According to Fred Jacobs, President of Jacobs Media, Pandora is “a threat to terrestrial radio.”
The study finds that within the pool of surveyed people who listen to Internet radio, 37% tune in Pandora. 43% of Pandora listeners are tuning in more often, meaning the service has momentum as well (15% are listening less). More than half of Pandora listeners like it more than terrestrial radio while only 5% like it less.
While many Pandora listeners had no complaints (37%), some listeners did. Gripes about the service included not allowing them to skip enough songs (hardly a complaint that terrestrial stations can take to heart). But one out of every five listeners also misses hearing real people and local info – something that terrestrial stations should take note of.
Pandora is emerging as the leader in the online music game in much the same way that Facebook and YouTube have dominated their spaces, says Jacobs. It’s true – at least in the US, which is the only place that listeners can hear Pandora. In other parts of the world, services like Spotify have had lots of time to build their brands. Facebook and YouTube both have global audiences.
With the new Facebook Open Graph feature, lots more listeners will be hearing about Pandora – earlier this week I noted that their integration into Facebook will be much bigger than the iPhone was for helping them to build awareness. But Facebook’s 400 million users are spread out all over the world. I’m guessing it won’t take long for Pandora to open up streams to folks in other parts of the world as well.
So what does this all mean for streaming broadcasters and smaller online stations? In addition to building their brand, Pandora is building awareness and fondness for Internet radio and connected listening. They’ve done more to build audience for Internet radio than anyone else, both on a desktop and even more so on mobile devices. They’re the face of Internet radio – as I said early and say often, they are the Kleenex of the industry. There’s plenty of ways for other services to focus on their audience and develop best ways to give them what they want. As a brand leader, Pandora is a good service. Others should sharpen their swords and aspire to make their offerings as popular with their own audiences…
RadioTime: Internet Radio’s Portal
As demonstration of the growing popularity of Internet radio on mobile and other connected devices, RadioTime’s online portal to Internet radio stations saw a jump of 40% in the number of times listeners tuned in during the month of March. The number jumped to 45 million – up from around 27 million sessions the month before. Most of that listening is done on mobile and other devices that use RadioTime’s tuner.
RadioTime is a company that develops tuners that enable mobile and other devices to easily tune in to Internet radio stations. The increase reflects more users visiting the RadioTime.com Web site and accessing the RadioTime guide from more than one hundred different connected home audio devices, mobile smart phone, and other applications.
According to RadioTime’s Dan Halyburton, the growth spurt is thanks to some new mobile apps like WunderRadio, which are seeing lots of downloads by iPhone and Blackberry users, and TuneIn Radio for iPhone users. Adding to the growth is the increasing popularity of tabletop wifi connected devices by companies like Sonos and Logitech, both powered by RadioTime tuners.
“RadioTime is turning computers, home entertainment devices and smart phones into worldwide radio tuners, helping radio better compete with online music services for listeners and advertising revenue.” says RadioTime Founder and CEO Bill Moore. Listeners download mobile apps or purchase new equipment to listen and they all pass through the RadioTime portal.
RadioTime’s portal is playing a more and more important role in Internet radio’s landscape. I truly believe that Internet radio needs a strong portal to unify the dial and make listening easy for listeners.
RadioTime is meeting the challenge by offering a portal where listeners can sort stations by region, format and call letters and enabling listening on mobile and other devices. If you’re a streaming station, I have two recommendations – make sure you’re on their radar, and find out how you can be a good business partner to them – your success is tied to theirs..
Pandora Gets Social With Facebook
Last week Facebook implemented a new phase of integrations with other sites that allow people to share things they like on their favorite sites throughout their Facebook network. The “Open Graph” is Facebook’s new game, and Internet radio darling Pandora is a big winner in it.
“Pandora is mapping out the part of the graph that relates to music,” said Facebook CEO Mark Zuckerberg during his announcement this week. “If we can take these separate maps of the graph and pull them all together, then we can create a Web that’s smarter, more social, more personalized
Listen to Pandora CTO Tom Conrad in this interview with Robert Scoble as he explains how Facebook came to them several months ago and offered a glimpse of their next phase in order to engage Pandora in becoming a launch partner.
What’s so cool about this, says Conrad, is that Pandora was already personalized and easy – “one button, you lean back and you’re done” he says. Now, as songs are playing, friends who like the same music will pop up on your screen where you can see what stations they like and what songs they have bookmarked, even leave messages for your friends.
It’s a way to make Pandora more social right within the product. Until now, notes Conrad, Pandora’s been social because people talk about it – sharing songs and bands they found on Pandora over drinks or Thanksgiving dinner.
With 400 million users, Facebook is the social internet. The Open Graph, as this new integration is called, puts them at the center of the web’s social infrastructure. I think this is a huge step that will spur even more exponential growth for Pandora. A couple of years ago (almost) the launch of iPhone spurred millions of Pandora app downloads and a huge jump in awareness of the music service as well as Internet radio. I think this is bigger than that…
Jetcast’s New Platform Rewards Listeners For Streaming
Streaming solutions provider Jetcast has partnered with Lenco Mobile and announced a listener loyalty program for Internet radio stations. RadioLoyalty will reward Internet radio audiences for using their favorite stations’ Internet broadcasts.
Jetcast provides streaming solutions to television and radio broadcasters, including streaming, ad insertion and network ad sales. Clients include Buckley Radio, Grupo Radio, 1.FM and 977music.com as well as others.
“Our RadioLoyalty™ loyalty program is focused on helping Internet broadcasters succeed in the digital marketplace,” said John Williams, CEO of Jetcast. “RadioLoyalty™ contains all the tools necessary for a broadcaster to dramatically increase the usage of their Internet broadcasts, enhance audience satisfaction, and grow the station’s monthly recurring revenue. It is a win-win situation because RadioLoyalty™ rewards the listener and the station at the same time.”
Once a listener registers with RadioLoyalty™, they automatically earn points for various activities including listening to, or watching, a participating station’s Internet broadcast, referring friends to the station, and other activities. Loyalty Points can be redeemed for goods and services inside the RadioLoyalty™ store.
Bridge Ratings Sees Internet Radio Revenue Accelerating
Internet radio revenues will accelerate faster than terrestrial revenues, according to new data presented by Bridge Ratings President Dave Van Dyke at RAIN Summit West last week in Las Vegas. According to his report, revenues will increase a modest 12% this year, from $288 million in 2009 to $324 million this year, then jump 240% over the next five years to more than $800 million in 2015. By 2020, Internet radio revenues will top $1.6 billion. 
“The data points for the revenue projects came from interviews conducted earlier this year with buyers, sellers and clients,” says Van Dyke. “We discussed their interest in the internet radio space, their budgets for the past two years and what their intended spending would be going forward for the next 2-3 years. From there we extrapolated growth based on these interviews with people who have their fingers on the pulse of the business.”
The revenue projections are based only on streaming ads, pre-roll and banner advertising in the player, and does not include ads on the website or other monies derived from a station’s digital platform.
Study: The Future Looks Good For Internet Radio
There were many highlights in the full day of programming presented at RAIN Summit West last monday during the NAB Show in Las Vegas. Two research studies were presented that provided excellent data on Internet radio and digital audio’s growing audience.
Radio Futures 2010 is an independantly funded study on audio platforms and usage in the US, UK and Canada done by Vision Critical. Senior VP and Managing Director Jeff Vidler presented the study, which makes a strong case for the future of Internet radio in the US. Nearly a quarter of the respondents (22%) indicated that Internet radio is playing a bigger role in their lives in the past couple of years.
Radio Futures 2010 Study by Vision Critical
When asked to list the features of online services that are most appealing to them, 53% said streaming songs on demand was most important, followed by radio with customizable features such as selecting and deselecting artists. Radio that streams music mixes designed by music experts was the least popular feature with listeners.
Also of interest, smartphone users are more likely to use a web based app to listen on their device than a broadcast service on the same
device. 31% of smartphone users in the US listened on a web only app, while only 19% tuned in with a broadcast radio app on their smartphone, causing the study to conclude that IP delivery is a preferred audio platform for mobile smartphone users.
Last.fm To Google Music: Not So Fast
Last week CBS owned Last.fm announced that they would stop streaming songs on demand. They’ll also stop hosting videos for on demand streaming. Instead, according to the Last.fm blog, they’ll focus on connecting listeners to services that provide “jukebox-in-the-sky” on demand services, such as Spotify, MOG, and Hype Machine for songs, and VEVO for video.
Last.fm will also continue its personalized radio station streaming services, which provide listeners with the ability to interact, but not request specific songs.
This seems to be another step in CBSRadio’s 2010 journey to profitability in the streaming space. After a few years of streaming everything everywhere, this year CBSRadio is fine tuning its streaming business model and brand identity. Not long ago, CBSRadio began blocking its non-US listeners from streaming in order to control streaming and royalty expenses.
This move last week indicates that CBSRadio intends to focus on what it has determined are Last.fm’s core competencies. “Our scrobbling data shows that, for some time now, people have been using multiple music services and devices, then coming back to their Last.fm profiles to answer the question “what should I hear next?” and to see / show off all their listening united in one place.”
Some recent research has shown that free on demand streaming services are bad for online music sales. Here in the US, the record companies have blocked Spotify from entering the market with their free on demand service by refusing to license it. Instead, Spotify will likely turn to a monthly subscription model like MOG.
The new vision for Last.fm is perhaps even broader than it was: “our vision is for Last.fm to efficiently connect any user to ALL of the relevant streaming options in their country for every track we know about, as well as being able to personalise listening preferences Last.fm-wide.”
This seems to me like a smart move for Last.fm. CBSRadio has identified the best strength of Last.fm in that it connects listeners around and about music. They can do that, provide channel streaming services, and leave the tricky on-demand stuff to other services. It’s actually what Google Music is doing with Pandora and a few other services, except that Last.fm will be providing its own streaming option as well. Which Google Music is not doing (yet).
2010 Infinite Dial Study Offers Clear Direction for Streaming Broadcasters
According to the newly released Infinite Dial study, listening to Internet radio didn’t increase much from 2009 to 2010. Last year’s study pegged the audience at 69 million, this year it’s 70 million, both netting a 27 share of the population.
That’s because broadband is nearly ubiquitous, says the study. As organic growth of broadband has nearly stopped, growth for online mediums such as online radio, podcasting and online video have slowed.
The audience is 55% male, 45% female and tends to be employed, educated, and have higher incomes. They like the interactive options that online radio offers, along with variety and fewer commercials. When asked to name an online only station, Pandora was the clear winner. Pandora is has taken the brand position for online radio. (See my post here about Pandora becoming the Kleenex of Online radio).
The study found that more people listen to online only brands than AM/FM streams. This should be a clear impetus to AM/FM broadcasters to offer more and different options in their online streams. According to this information, listeners are turning online to find offerings that are different than what they can hear on their AM/FM radios. To compete, broadcasters must expand their offerings to include side channels and options that give listeners ways to control and interact with the streams.
Arbitron Updates Benchmark Infinite Dial Study
Last week, Arbitron and Edison Research released their updated yearly survey of radio and associated digital platforms, The Infinite Dial. It’s an extremely comprehensive study that has over the years become the benchmark of the continued redistribution of radio’s audience onto alternative digital audio platforms.
For the first time, this year’s study finds the Internet surpassing TV as the most essential medium for those surveyed. 42% of those surveyed stated that the Internet is most essential to their life, compared to TV (39%), radio (14%), and newspapers (5%). The number of people that claimed the Internet more than doubled from a year ago. But even though the headline for this data point is that the Internet beats TV as most essential for the first time, it was not TV that lost a lot of ground – only 3% fewer people claimed TV than last year. Radio and newspapers were the big losers, each losing close to 50% of the share they had a year ago when respondents were asked this question.
In part, this trend identifies a shift to online listening. More and more Americans are listening to online radio and are also relying first on the Internet for music discovery. Another first this year – among 12-24 year olds, the Internet is now the place they turn first to hear new music. 62% of 12-24 year olds go online to hear new music, a number that has doubled in the past year, while just 32% turn to radio first. While radio still wins that data point with respondents of all ages, it lost a lot of ground in one year. My guess is that by next year the Internet will be the first source of new music for all ages in this study.
These are conclusions that more sharply than ever identify that radio’s audience is rapidly and relentlessly moving online. This year’s study pegs Internet radio ‘s monthly audience at 70 million – 27% of the population.
