Monthly Archives: July, 2011

Internet Radios Selling Well In Auto Aftermarket

Six percent of automotive aftermarket car radios sold this year will be Internet radio capable, according to the Consumer Electronic Association. That number will increase to 14% by 2015 based on projections from the CEA.

In sync with that trend, Ford will no longer put cd players in the dash of their cars, opting instead for their connected dash approach, according to Digital Music News.  “In-car entertainment technology is moving digital more rapidly than almost any other element of the vehicle experience,” said Sheryl Connelly, global trends and futuring manager at Ford Motor Company.  “The in-car CD player – much like pay telephones – is destined to fade away in the face of exciting new technology.”

The automotive aftermarket is hot for Internet radio, and most notably, Pandora enabled devices. Seattle-based Car Toys’ Jim Warren said, “Pandora products are selling through quite well. Typically, the Pandora feature is packaged in with other step up features so it is difficult to isolate the impact of the feature by itself. Regardless, we love seeing our suppliers adding step up features that connect the smartphone to aftermarket car audio.”

This year has seen a lot of interest by automotive aftermarket companies in introducing Internet radios. Alpine says that 60% of their 2011 radios have Internet radio features. Pioneer, Kenwood, Livio Radio and other manufacturers have introduced devices as well. “When we first started selling Internet radio products in 2008, we were cold calling customers and the main question we had to answer was “What’s Internet Radio?” Now customers are calling our office and asking us what products we have that can add Internet Radio to their cars.” says Jake Sigal, Founder of Livio Radio.

No doubt Pandora’s big brand helps to create the kind of buzz that sells these radios. Functionality that leaves the listening choices to the listener will be important to the industry as a whole. I look at the way that Sirius and XM drove the success of satellite radio’s expansion into cars and wonder who – other than Pandora and to some degree Clear Channel – is driving online radio’s automotive future?

Dollars Are Flowing Into Music Startups This Year

A few weeks back Digital Music News published a chart of all the investments into Music related startups this year. The amount totaled almost $400 million dollars. The big winner was Spotify, with bragging rights to a $100 million investment.

I’m not agreeing that Eventbrite is a music related startup, I think counting their $50m is a stretch. But Internet radio’s very own Targetspot is on the list, as well as others like MOG, Shazam, Rdio.

A couple of companies related to streaming have received undisclosed amounts of funding. Airkast, a mobile streaming tech company that builds apps for lots of online radio entities, and Livio Radio, a company that designs and sells Internet radio devices have received investments from Angel Street Capital. Late last year bandwidth and streaming tool provider Abacast took in a $500k as well.

For those keeping score it’s a fun list…

Song, Album Sales Are Up For 2011

2011 is turning out to be a good year for the record industry, which is seeing growth year over year sales for the first time since 2004. Digital album sales are leading the way in terms of growth – they’re up 19% over 2010. Digital track sales are up 11%. Overall music sales are up 8.5% to $821 million.

In early July Eminem‘s Recovery became the first digital album to sell more than a million units, with Adele‘s 21 not far behind. Earlier in the year the Black Eyed Peas made themselves the first to sell more than 7 million digital song downloads of I Gotta Feeling.

Emmis To Stream WRXP

New York broadcast rock station WRXP, which Emmis recently agreed to sell to Merlin Media, will continue to stream online and “strengthen Emmis’ presence in the digital space, as well as preserve the identity of RXP, which has become a leading alternative rock brand within New York City and national markets since the current format launched in 2008.”

Well, there’s some irony for you. Emmis CEO Jeff Smulyan is one of the most vocal broadcasters when it comes to busting streaming’s potential as a business model. A huge advocate for FM chips in cell phones, he’s gone to great lengths to argue against streaming as a viable mobile distribution channel for radio due to its large expense. He’s stated repeatedly that there is no money in streaming for his company.

Did he forget to inform his staff of his position?  

“Emmis has some big things in the works to continue expanding our digital footprint,” said Chase Rupe, Vice President of Programming & Operations for Emmis. “As competitors are moving in on the land rush to grab the next bit of real estate focused on delivering audio content on multiple platforms, we are fortunate to have big brands with impressive local and national followings that we can continue to serve and expand upon.  RXP is one of our strongest brands and we are excited to keep it alive in the hearts and ears of its loyal followers in New York and around the world.”

Oh, I get it, it’s all for the listeners:

“We recognize that RXP passionate fan base loves the station and we look forward to continu(ing) to deliver a quality product to these listeners.” said Patrick Walsh, CFO/COO at Emmis.

I’m glad that WRXP will live online. It’s a smart move to take a station with an established brand and move it online. Listeners will follow. But I don’t believe for a second that Emmis and CEO Jeff Smulyan made this decision because they think they’re going to lose money…

Eye On Spotify

Last week was a busy week for Internet radio. Clear Channel shook things up at the beginning of the week with their announcement of the coming “New iHeartRadio”, later in the week Spotify launched its US based service. While I think Spotify’s entrance here is interesting, I don’t think it will have an enormous impact on free streaming radio options.

Spotify’s on-demand service is more competitive with other highly interactive services that are looking to replace personal listening collections. Those include services like MOG, rdio and Rhapsody. Cloud based services that allow a listener to sync their own music files and stream from multiple devices are a competitor to on-demand services as well. Premium Internet radio services, such as Pandora One and Slacker’s premium ad-free option may also be affected, as I think they will compete for the same dollars.

More than 2/3’s of Internet users here in the US have paid for digital/online content already, according to The Pew Internet and American Life Project, 1/3 have paid for digital music online. That information validates the consumer subscription model. But how many different services will the consumer pay for? Probably not more than one or two.

In addition to all the streaming on-demand services competing for digital dollars, there are subscription based podcasts such as Adam Carolla, Bubba The Love Sponge and others.  In fact, I think Sirius XM, with its monthly subscription fee, is ultimately competing for the same monthly listening subscription dollars.

The arrival of Spotify, long heralded by themselves, has been anticipated by industry watchers aware of their large listening share in Europe. But the general public is largely unaware of them so far. Interest in earlier Euro based services has been weak – GOOM Radio launched and quickly fizzled, and UK born Last.fm, which CBSRADIO picked up a few years back, has not been able to build a massive following.

It’s an interesting case study from the get go, one that I’m looking forward to tracking..

Spotify Launches In The United States

The Swedish service went live around 8am e.t. this morning. The service offers on-demand music at a premium no-ads price of $9.99 per month, or a service with ads for $4.99 per month. There’s also an initial free sign-up period with some limitations of the number of times a listener can hear a song for free.

Spotify‘s launch in the US had been promised several times before over the last couple of years, but they struggled to obtain licensing deals with the four major labels, who don’t take kindly to on-demand services that enable listening to any song or artist anytime and can therefore threaten actual physical or download sales.

Spotify has taken Europe by storm, with over 10 million users, more than 1.6 million of those paying subscribers. In Europe, they offer a free ad-supported on demand service that will not be offered here in the US.

While ten million is a big number, it pales in comparison to the 100 million that Pandora recently announced as their registered user base, or even the 26 million users that Slacker has registered. Those services offer free streaming channels that are highly interactive, but not to the level of any song, any artist on demand that Spotify offers.

Spotify’s service resembles much more closely that of Rhapsody, which has 800,000 users here in the U.S. and offers on demand streaming, playlist building and caching for some offline listening.

So, it’s game on Spotify. A big move by a big European player that should shake a few things up.

New Data Shows Targeting Is Critical For Internet Radio Ad Campaigns

Triton Digital has reported, via Inside Radio, that on average about half (51%) of a streaming broadcast station’s audience is outside its Designated Market Area (DMA). In fact, according to Triton COO Mike Agovino, quoted in the article, the larger the market, the higher the percentage of out of market listening. He says a lot of the out of DMA listening is from nearby markets, such as listening in Connecticut to New York stations’ streams. 

The problem is, few stations are separating their in-market versus out-market audiences when they are selling to advertisers or when they are counting up delivered impressions. In fact, most national streaming ad campaigns are targeted geographically based on choosing call letters in the markets that the advertiser wants to target, according to the article in Inside Radio, which checked in with Eyal Goldwerger, CEO of Targetspot and Brian Benedik, president of Katz360. If national advertisers are buying streaming ads on broadcast stations and believe they’re geotargeting by doing so, that’s a problem, since this new info from Triton reports that only half the people who hear the ads are in that market.

Since online stations like Pandora and Slacker are registering their listeners, they have actual impression by impression geotargetability. Advertisers that are measuring the results of their campaigns are going to see an improved return by those stations and that will drive the price up for them. Broadcasters that stream and fail to improve their targeting capabilities will see the opposite.

The reality is that targeted ads are good for the station, the listener and the advertiser. Listener registration lies at the center of ad targeting capabilities. Pandora, Slacker, CBSRADIO, iHeartRadio, and others have been registering their listeners for a long time because they understand that the game has changed and targetability is essential to an ad based streaming audio ad model.

Clear Channel, iHeartRadio Are In It To Win It

Clear Channel and Bob Pittman are going all out with the launch of their “New iHeartRadio.” For months Pittman has been promising a new and improved Clear Channel streaming platform. The New iHeartRadio will deliver to users the nation’s most popular broadcast radio stations as well as the ability to create custom stations with even more songs and more control than the leading custom radio station services.

The new service will launch with a bang – Clear Channel is using its clout and record label relationships to promote the launch The New iHeartRadio with “the largest concert event in radio history.” The event will take place at the MGM Grand in Las Vegas on two consecutive nights, September 23 and 24.

The lineup for the concert event is truly impressive, including many big names such as Lady Gaga, Steven Tyler, The Black Eyed Peas, Jane’s Addiction, Carrie Underwood, Kelly Clarkson, Rascal Flatts, Jennifer Lopez and more. It will be hosted by Ryan Seacrest, the popular host of American Idol. In fact the lineup has a distinctly “Idol” flavor, probably thanks to Clear Channel’s relationship with Simon Fuller, creator of that show.

“This underscores Clear Channel’s transformation to a dynamic integrated media and entertainment company with an unmatched reach in the US,” said Bob Pittman, Chairman of Media and Entertainment Platforms for Clear Channel Radio. The New iHeartRadio will offer users a much broader, more integrated and customized digital listening experience than any other service available – and it’s all in one product.”

Live audio and video streams of the iHeartRadio Music Festival will be available online and listeners will be able to enter to win tickets as well. “This is a once in a generation gathering of artists and fans from all over the country for a true, must-see music event,” said Ryan Seacrest, host of American Idol and Clear Channel Radio Personality.

While I haven’t seen the platform, I have to agree that the launch is impressive. It’s the kind of thing that a company like Clear Channel, with established recording artists relationships and an expansive network of broadcast and digital offerings, should be doing.

Pittman has made no bones about his ambitions with regard to Internet radio, he’s had his sights set on Pandora for a while. The new service will reportedly offer more interactivity than Pandora in terms of song skipping, something that Pandora currently limits to 2 songs an hour. iHeartRadio will also offer its service ad-free through the end of the year.

A very interactive Internet radio service with a high caliber kickoff is something I’d expect from a major media giant who thinks Internet radio is looking pretty good. I’m thinking Clear Channel and iHeartRadio just might be in it to win it…

Internet Radio Audience Data Released For May

Triton Digital has released its ranker of the top 20 stations or networks measured within its Webcast Metrics audience measurement platform for May. At the top of the ranker, Pandora picked up another 30,000 or so Average Active Sessions, some of this a result of missing data from the last several months, which had been noted in previous data releases.

Other services were fairly stable, with CBSRadio losing a little in their AAS and Clear Channel picking up a few thousand. We’ll see a bigger loss assigned to CBSRadio in the coming months as the AOL audience number moves onto the Slacker platform and becomes part of that number. Slacker has said that their number will benefit by doubling with the addition of AOL’s measured audience. On their own, they have actually been losing a little ground on the ranker, their AAS dropped about a thousand from last month and roughly two thousand from March.

I’ve begun to think that a monthly microscope on each station or services ups and downs is overkill, so I’m reluctant to recite the minor changes that occur with every new data release. I think what’s more interesting is growth over several months and trending as it relates to big changes (like the AOL shift from CBSRadio to Slacker.)

I’m also hoping to see more and more information on listening patterns – how much is on a desktop versus mobile within these audiences? Where is the audience concentrated in terms of dayparts as well as geography? And what’s the universe looking like? I’m hoping that we’ll see more and more of that as the Webcast Metrics service matures and measures more and more of the Internet radio landscape..

AARP Wants Older Americans To Listen Online

AARP, with the help of Concord Music Group and Slacker, has launched a compliment of streaming music channels designed to  help adults find the music they love in the digital age.  AARP Internet Radio, a free music player provided by Slacker, features 18 free streaming channels of handpicked music catering to the musical tastes of Americans age 50+ and is the initiative’s centerpiece. Its aim: to make enjoying music intuitive and fun—especially for people who have been largely underserved by conventional music sources.

 

AARP serves a distinctly older portion of the population but is hardly just for retired persons – anyone over 50 is eligible to join. They reportedly have over 40 million members who join to enjoy benefits and support their collective efforts on the behalf of older Americans.

And they are now encouraging their listeners to enjoy Internet radio! Visitors to the AARP website can open AARP Internet Radio in a separate window displaying the music player and a list of stations to choose from. Users will have the option to play, pause or skip songs, and easily change stations. Slacker has apparently created a “simplified radio player” to make it easy and attractive for folks unfamiliar with online radio to give it a try.

AARP’s music site also features lots of news and information for music fans, as well as chat rooms. Mobile apps are in the plans as well.

This is a great idea, and a big win not just for Slacker, Concord Music and AARP but for Internet radio as well. Who better to drive new listeners online than AARP? I love it…

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