News this week makes it clear once again that Slacker has turned its attention to becoming a content aggregator. Slacker has been building its network for a while now. In March of this year they announced a deal that added ESPN Radio in the form of an interactive channel. Last summer they added ABC News in segments that listeners can add into their music listening experience, or listen to as a channel with the ability to skip through segments. Now they will add AOL Radio in an interactive offering as well.
RadioInk is reporting that all of the audience and associated royalties will belong to Slacker. The two companies will work together on developing ad dollars, no doubt there is a revenue share in place.
What’s interesting about this is that it’s the first content partnership that adds music content from an outside brand that is remarkably similar to what Slacker already has. It’s this fact that makes me think this signals a business model shift for Slacker. I think they’re deciding to be a content aggregator, or Internet radio network of branded content rather than a creator of content.
Slacker does create lots of content itself, in recent months they have announced the launch of some new Hispanic channels, and they have offered comedy channels for several years.
Nonetheless, it looks like Slacker’s new strategy puts focus on bringing content from bigger brands into its network of offerings. They can offer those brands a nice infrastructure – they have a strong mobile offering and developed relationships withwireless carriers. At a recent conference in California, Slacker CEO Jim Cady said that Slacker would be pre-installed on 52 million mobile handsets this year alone as a result of those deals. Listeners can upgrade easily and pay the monthly fee with their phone bill. I suspect that’s very attractive to AOL Radio.
Cady said that Slacker has 26 million listeners, by which we can assume he was referring to registered users (which is not the same as listeners). With this deal with AOL Radio, Slacker VP Jonathan Sasse said their audience will double. That’s a lot more listeners and a big win for Slacker..
In an interesting twist, AOL has joined partners with Slacker to offer a more interactive service to listeners. This appears to involve the departure of AOL from an agreement with CBSRadio which assigned AOL’s audience to CBSRadio for revenue purposes. CBSRadio has been including AOL’s audience as part of its network in Webcast Metrics rankers, along with Yahoo Launchcast.
The new AOL Radio, now part of AOL owned by Huffington Post, will offer an enhanced radio experience with fewer ads, new personalization features and premium subscription offerings. The new service will deliver three product tiers to users: the free AOL Radio service, along with ad-free and feature-rich radio and on-demand premium subscription tiers with personalization and customization powered by Slacker.
“Slacker Radio is the perfect partner to significantly increase the quality of our offerings, said Lisa Namerow, Head of AOL Radio. By combining AOL Radio’s reach with the success of Slacker in mobile, we are increasing the distribution of our brands and further identifying AOL Radio as a leader in delivering superior radio experiences.”
There’s apparently some co-promotion built in as well, the two services will pair up on ad opportunities. RAIN reports that Slacker should double their audience as a result of this partnership.
It looks like AOL has decided, likely with guidance from their new owners at Huffington Post, to step up their online radio game. Huffpo is definitely a content focused operation and the recent success of Pandora has gained Internet radio lots of buzz. AOL has always had a good sized audience and it makes sense that they put some focus on making that service more interactive and interesting to listeners and advertisers.
Pandora’s stock price, much to the dismay of most of the broadcasting world, was back over its IPO price as of close of the market on Monday. It turned out that Pandora’s IPO hit the market the day before the (most recent) bad news about Greece. It wasn’t just a bad time for Pandora, it was a bad time for Apple, and lots of other stocks as well.
Nonetheless, last week some radio trades were gleefully reporting on Pandora’s tanked stock price and failed IPO. Which is exactly what many broadcasters wanted to hear. So my question is this: Why was the broadcast marketplace generally so delighted at the failure of the first significant IPO in Internet radio?
After a week mulling this over I have to conclude that it’s because radio broadcasters are so determined that their FCC licenses and their towers retain value that they cannot see the vast opportunity that lies in front of them. They are so invested in their status quo that they are ignoring the fact that listeners want to listen online. And they’re cheering for the failure of companies like Pandora rather than watching their progress as a signal of their own opportunity.
We have lots of research and reason to believe that listeners want to listen to Internet radio. Pandora’s success is just one example of that. The Arbitron/Edison Research Infinite Dial Study tells us that Internet radio’s audience is doubling every five years. But despite the empirical data that shows listeners wanting to listen online, many broadcasters won’t believe it. They think that if they close and lock the doors their listeners won’t be able to escape to other listening platforms.
It’s simply not true. Listeners can listen to whatever they want. Limiting access will cause them to look elsewhere. Delighting in a failed Internet radio IPO won’t make Internet radio go away.
In fact, Pandora’s IPO wasn’t a failure. They succeeded in raising almost $235 million in their IPO. And due to bad timing, their stock price dipped afterwards like many others. Like the emperor who was delighted to hear that his new clothes looked so smart, broadcasters are pleased to hear that Pandora’s IPO failed and Internet radio is doomed…
A new company with some not so new faces has launched a platform designed to enable advertisers and stations to easily buy and sell on-air and online ad inventory. Called The Media Dash™ Local (www.themediadashlocal.com), the digital platform provides an easy way for small- and mid-sized businesses to buy advertising on local radio stations.
Rob Williams and Drew Hilles launched The Media Dash, which is designed to help broadcasters sell premium on-air and streaming commercials to both new and repeat advertisers. It’s not their first adventure together, the two paired up as the team that launched Goom Radio in the US, but left not too long after that. Williams comes from a Clear Channel based background in broadcast management, while Hilles was with dMarc, a broadcast traffic platform company that was acquired by Google, where Hilles then spent a few years.
This project resembles attempts Google has made to make radio ad inventory buying and selling more digital. Google’s goal was to make it easy for local and smaller advertisers who were already spending ad dollars with Google on things like search and adwords to add audio to that mix. The plan failed when many broadcasters, wary of Google’s intrusion into their territory, refused to participate. Since then, a few other companies have tried it – Bid4spots is an auction based online marketplace for radio inventory. Targetspot offers a similar “self service advertising platform” that enables local advertisers to get an audio ad made and select a target area and budget.
“Due to limited resources, local radio stations typically focus their sales efforts on their largest customers, failing to address a broad market opportunity of under-served local advertisers,” said Drew Hilles, CEO of The Media Dash. “Our goal is to make it as easy to buy local radio as it is to place Internet advertising. The Media Dash Local is designed to bring new advertisers to radio and generate incremental revenues for stations.”
Targetability is the other key feature to being able to compete for digital dollars, and this system enables advertisers to select local markets where they want their ads to run. Available markets are limited, but will presumably increase. Ultimately, as Google learned, the service will have to be able to offer lots of inventory from lots of markets in order to succeed.
The platform also allows you to decide whether you want to run creative that you may have, or offers to produce audio ads for free, something that will no doubt add to the success of the plan as it tries to bring new digital advertisers into the radio marketplace. Watch the video below for more info.
Broadcasters looking for a comprehensive solution to their digital streaming needs may find what they need with Radio Loyalty. Radio Loyalty has put together a universal platform that provides stations with streaming and ad insertion, a mobile app, loyalty program for listeners and revenue opportunities.
“We are providing internet radio stations of all sizes the opportunity to be profitable and to be able to grow their audiences with predictable online revenue without having to make more investments in technology, personnel, or third party services.” says Jeff Pescatello, EVP at Lenco Mobile, the company that owns Radio Loyalty.
Pescatello says they are seeing a lot of success selling video prerolls and mid-rolls on audio streams. Revenue is assigned to stations based on the number of listener hours they stream. Stations can generate as much as .03 to .05 per US listener hour on the platform if they are using the company’s streaming and universal player services. Stations can assign all of their online inventory to the program for Radio Loyalty to sell, or sell some themselves as well.
So what about video mid-rolls within an audio stream, is anyone watching? Pescatello says that’s one of the great things about their universal player which encourages listeners to interact. Listeners can rate songs, search, share music and more, which makes the video impressions worthwhile. In fact, they see 7 or 8 interactions per listener per hour. Listeners can register and then earn points for listening as well, something that translates to longer listening for stations.
For more information on Radio Loyalty’s offerings, visit their website here.
Based on a new plan recently approved by ICANN, there will soon be a new domain for radio on the web. ICANN, the Internet Corporation for Assigned Names and Numbers, has approved a plan to dramatically increase the number of Internet generic top-level domains. This clears the way for BRS Media, who has been working with ICANN on the development of a .RADIO extension.
BRS Media Inc. will apply for the .radio top level domain through the ICANN gTLD application process, once the window for new gTLD opens. Applicants will be subject to approval by ICANN’s governing board. BRS Media already manages .fm and .am and is optimistic about the prospects for the .radio extension.
“Within our Industry, the online future is vibrant. From cell phone streaming applications to new In Car and In Flight Wi-Fi access, Internet Radio is now being consumed literally everywhere!” said George Bundy, Chairman and CEO of BRS Media Inc. “DotRadio will allow us to offer the most complete selection of domain extensions to interactive media companies worldwide.”
Indeed, Bundy knows what he’s talking about. He launched the .fm and .am extensions in 1998 and has been actively selling those web addresses. His company was named a top 5000 fastest growing private companies by Inc magazine. You can see him discuss the new .radio top level domain in this video:
Jacobs Media has updated their annual survey of radio listeners tech likes and habits. TechSurvey 7 reports on radio listeners use of “media, gadgets and digital relationships.” Broadcast radio plays a major role in the lives of those surveyed, in fact, the respondents were sent the survey because they have a relationship with a radio station and are in a station’s database. Some 70 stations participated in the survey. As in past years, the study focused on stations with Rock, Classic Rock, Alternative and Triple A formats.
The survey found that while listeners continue to have relationships with their broadcast stations, they have expanded the relationship across various media channels. For example, 24% now listen to the station online, 30% visit the station’s website, and 20% are connected with their station on Facebook. In fact, 77% of all respondents have a Facebook profile.
Almost half – a solid 45% of those surveyed – listen to Internet radio on a weekly basis. They listen to broadcast stations, and to Pandora. The survey says Pandora was in third place, but that was behind “the station that sent them the survey” and “other local stations.” I suspect that if Pandora were compared to any single station’s showing in the survey it would be on top.
Other noteworthy findings: satellite radio is not gaining listeners among this group, although HD Radio gained slightly moving from 4 to 6% who listen. You can read more about it here.
I spent a few minutes talking with Tim Westergren today while he chatted his way through what must have been dozens of press calls. He told me he’s been surprised over and over again by Pandora‘s success and the passion people feel about the service. “Music is such a passion” he told me, and “people really love the way they can create their perfect personalized listening experience at Pandora.”
A sharp focus on what they have to do each day along with a dedication to their long term view are the things that have brought them to this point, and he doesn’t expect that to change now that they are a public company. What’s the long term view? A global service where billions of listeners can consume and connect with music and artists can find and develop audience. Westergren talked about the shift in radio listening from broadcast to personalized radio and the way that can accomodate many more artists. As a musician, he knows that’s a good thing.
He’s not worried about Spotify or Google Music Beta, or other on demand or cloud services taking listeners away from Pandora either. “Any service that is about listening to your collection is complimentary to Pandora.” he said, adding “People listen to their music collections and still listen to radio and that’s not going to change.”
I asked him if today marks his most significant accomplishment, to which he firmly told me it did not. He said he’s happy to pause and appreciate the win that today represents, but he was mostly feeling gratitude today – for employees, advertisers, investors, musicians and listeners. All part of the Pandora story.
By the time I spoke with him, Westergren had no doubt been on calls just like mine for several hours, answering the same or similar questions over and over again which is probably why he sounded a little rehearsed. I didn’t mind, in fact I was happy to chat and congratulate him and celebrate my own visions for the industry.
Pandora raised $234.9 million in its initial public offering, according to Bloomberg. They sold 14.7 million shares at $16 each. The shares, which were offered by Morgan Stanley, JPMorgan Chase & Co. and Citigroup Inc. will trade on the New York Stock Exchange – probably tomorrow.
Pandora had set a price of $10-$12 for their initial offering, so out of the box and before the stock actually trades publicly they’re realizing a premium. That will likely escalate tomorrow as buyers who could not participate in the IPO start to purchase shares. Last week Pandora increased the number of shares as well as its target price to accomodate perceived demand for its highly popular Internet radio service.
With 90 million registered users, more than 20% of persons 12+ in the US using it, and the best brand recognition in its class, Pandora has timed its public offering exceedingly well. Despite many naysayers who claimed that the streaming service’s music licensing obligations are too burdensome to make it a smart investment, Pandora has plenty to celebrate. May they thrive…