Monthly Archives: August, 2011

Mobile Payment Marketplace Is Expanding

97.3 million Americans currently access the web using their mobile phones. That number represents nearly a third of the population and will increase to 156 million and almost half the population by 2015, according to eMarketer. Much of that usage is thanks to the expanding usage of smartphones. Nearly 30% of the population will use smartphones by the end of this year, by 2015 it is projected that 150 million Americans will use a smartphone.

Streaming is a popular smartphone activity, as evidenced by research reported by Arbitron/Edison’s Infinite Dial Study which found that 8% of smartphone users listen to Pandora daily, and 5% listen to the streams of AM/FM stations. Another study recently found that streaming music from mobile devices has grown significantly in the past year. comScore just released new data showing that listening to music on a mobile phone (smartphones and non-smartphone) grew more than 2% in 3 months to 20.3% of users.

But many reports also show that the US lags other countries in terms of the way we use mobile devices to make purchases. While the mobile payments market has surged 76% in the past year globally, only a small portion of that activity comes from the US. While estimates of the size of the marketplace vary, research firms all agree that it’s going to grow. 

I’m thinking about the ways that streaming audio on smartphones and making purchases either online or in person using a smartphone go together and wondering if there’s some ways that streaming audio campaigns can integrate mobile payment options to prompt immediate responses and boost the effectiveness of ad campaigns..

Pandora’s 2Q Call Impressive

Last thursday during an earnings call Pandora reported $67 million in revenues, a 117% increase over a year ago. They also reported impressive increases in listening – 1.8 billion listening hours, an increase of 125% over a year earlier. The report was the new public company’s first quarterly earnings report and it reported on earnings delivered during its fiscal Q2 – which ended in July.

This was a sturdy earnings report in the face of investment banker expectations that expected to see a report of $60 million in revenues.

The company also reported that mobile ad revenues accounted for approximately half of all ad revenues. This was good news as analysts have been focusing on Pandora’s ability to monetize an audience that is rapidly shifting to mobile device listening. During the call there were many followup questions regarding Pandora’s ability to monetize its mobile audience. Pandora CEO Joe Kennedy said that they have found that most mobile ads are part of “multi platform” ad campaigns, and that Pandora is optimistic that they will be able to leverage more and more of those dollars.

Kennedy also spoke about Pandora’s increasing ability to monetize audio at the local, regional and national levels. He said that while they were seeing audio ads from national ad campaigns, they are now expanding their base and developing audio based revenues from local and regional sources.

To a question about the revenues they are seeing from song download revenue sharing with iTunes and Amazon, Kennedy revealed that Pandora is one of the top 3 biggest link sources to iTunes. He said that is strong evidence that listeners are discovering music and purchasing it after hearing it on Pandora.

So, as the experts from RAIN: Radio and Internet Newsletter pointed out in their analysis on friday, Pandora had a strong 2Q earnings call where they managed to exceed revenue expectations and offer some excellent prospects for continued growth.

 

MP3tunes Scores A Victory For Cloud Locker Services

Law Books

Image by ConanTheLibrarian via Flickr

This is a guest post by Angus MacDonald, General Counsel at Live365, Inc. regarding a recent court ruling that could have significant impact on the streaming audio industry.

Cloud-based music services can heave a sigh of relief. MP3tunes, the cloud locker service founded by Michael Robertson, scored a partial victory in the copyright litigation brought by EMI. In his August 22nd decision, Judge William H. Pauley III agreed with MP3tunes that the safe harbor provision of the Digital Millennium Copyright Act (DMCA) protected it against many of EMI’s infringement claims. The decision represents a significant victory for other cloud-based music services – such as Google, Amazon and Dropbox – who should have renewed confidence in operating their cloud services without a license. Though the decision sets a beneficial precedent for cloud-based music services generally, it is a mixed result for MP3tunes as the court also found both the company and Robertson liable for copyright infringement on some of EMI’s claims.

MP3tunes allows its users to store music files in personal online storage lockers and then to play those stored files from Internet-connected devices. MP3tunes also operates a second website, Sideload.com, that permits users to search for free song files on third-party websites and then “sideload” those songs, which would be saved to users’ lockers. EMI, along with fourteen record labels and music publishers, filed this lawsuit in November 2007, claiming a laundry list of violations of copyright and unfair competition laws.

Yesterday’s decision turned largely on whether MP3tunes is eligible for the DMCA’s “safe harbor” protection, which shields qualifying online service providers from copyright infringement for content uploaded (or “sideloaded”) by their users. To qualify, online services must follow the rules set forth in the DMCA, including expeditiously responding to takedown notices from copyright holders. The court found that MP3tunes – for the most part – complied with all of the DMCA rules and, therefore, was largely immunized from liability.

However, MP3tunes and Robertson did not completely avoid liability. Shortly before filing this lawsuit, EMI sent MP3tunes three takedown notices that identified specific song titles and URLs to be removed. Although MP3tunes disabled the links to those songs, thereby preventing more users from downloading them, it did not actually delete the songs from the lockers of its users who sideloaded the songs from those links. (MP3tunes claimed that it would be subject to lawsuits by its users if it removed property from users’ lockers.) The court held that MP3tunes did not do enough when it failed to remove the sideloaded songs from users’ lockers.

As for Robertson, the court ruled that Robertson was “directly liable for the songs he personally sideloaded from unauthorized sites.” This finding is somewhat confusing based on the court’s earlier statements that “there is no evidence that MP3tunes executives or employees had firsthand knowledge that websites linked on Sideload.com were unauthorized.”

There are several key-takeaways from this important decision. First, this decision provides significant legal cover for cloud-based music locker services to continue providing their storage and play-back services without obtaining a license. (When Amazon and Google launched their respective cloud services earlier this year, the record labels were “upset” and clamored that licenses were necessary.) While the decision does not specifically address the legality of MP3tunes’ music locker business model or other similar cloud-based services, it is clear that MP3tunes would have completely escaped copyright liability if it had removed the specific songs listed in EMI’s takedown notices from its users’ lockers.

Second, the ruling re-affirms the DMCA as a powerful shield against copyright holders, who claimed that the DMCA did not apply to MP3tunes. As the court observed, “the DMCA does not place the burden of investigation on the Internet service provider.”

Third, the decision appears to let MP3tunes off-the-hook for its storage process, which eliminated duplications of the exact same music files so that only one copy of a particular file would be stored on its servers and then streamed to its users. Google and Amazon took a different approach when they launched their respective services as both companies require every user to upload every song, regardless of whether other users had uploaded identical files, thereby resulting in an enormous consumption of bandwidth and storage space.

Finally, the ruling indicated that playing back songs stored in a user’s digital locker was not a “public performance” requiring a license, contrary to EMI’s contentions. This holding was a natural extension of an earlier decision – commonly referred to as the Cablevision case, which determined that a public performance license was not required for the play-back of television shows that were stored on a remote DVR at the direction of Cablevision’s subscribers.

The EMI v. MP3tunes case, however, is not over. While the decision disposes of some claims, several issues (such as damages) still will need to be tried – unless there is a settlement. The range of damages is $750 is $30,000 per work infringed, and can increase to $150,000 per infringed work if there is a finding of “willful” infringement. Because there are at least 350 works at issue, the damages could exceed $50 million dollars, though that result is highly unlikely. And, barring a settlement, one can certainly expect an appeal of this decision. But, in the meantime, the decision provides some important clarity and leverage for cloud-based storage services that may have been considering the daunting process of negotiating with labels (and other copyright holders) for the right to store and play-back their users’ lawfully-obtained digital files.

A copy of the decision is available here:

http://www.nysd.uscourts.gov/cases/show.php?db=special&id=125

Your comments are welcome below. You can reach Angus MacDonald at amacdonald@live365.com. 

It’s About TIME To Look At Some Other Great Streaming Music Sites

Time Magazine updated its list of the 50 best websites recently with their 2011 list of sites that make the Web so useful, entertaining and just plain indispensable. Rather than ranking the sites all in one list, they’re grouped into categories such as Music and Video sites. Two streaming sites make that list, including 8Tracks, which not only appears first in that category, but is the first site that shows up on the entire list online.

Time likes the fact that  on 8tracks, “members pick at least eight songs (hence the name) from their own collections, upload them and share them as handcrafted mixes that seem like a happy throwback from the cassette era.” 8tracks is not new to the streaming music scene – it has been around for a few years, I’m guessing since around 2007. I met CEO David Porter when he was working on his concept and talking about it in broad terms. He’s formerly of Live365. 8tracks calls itself “handcrafted Internet radio” and its combination of personalized music and sharing seems to be striking the right chord with listeners, and with Time.

The latest media darling in the streaming music world is Turntable.fm and it made Time’s list as well, they called it “joyously social.” I wrote about the site a couple of weeks back. It’s not open to everyone yet, but you can get a listen if you have a friend who’s in.

I’m glad to see Time picking 8tracks for this list because they’ve stepped way outside the list of trendy streaming sites and picked one that has a nice unique offering for listeners. Despite all the media attention, there is more to the Internet radio scene than Pandora and Spotify, thanks to Time for helping to point that out..

Digital Revenues Becoming More Important To Radio

Broadcasters saw relief from declining spot revenues by selling more digital in the second quarter, according to new figures reported by the Radio Advertising Bureau. Digital revenues, including activity generated by websites, Internet/web streaming and HD Radio including HD2 and HD3 stations, was up 18% over the previous year’s second quarter. Those digital revenues are up 19% over last year.

Overall, spot revenues meanwhile are down – by 1% versus second quarter 2010, and flat for the year. There’s a stronger decline in national spot sales, with national radio rep Katz reporting a decline of nearly 3% in second quarter sales over a year ago separately last week.

Meanwhile, Katz 360, the digital sales arm of the Katz Media Group, has launched Katz 360 Local Media, a new online display advertising vehicle that offers advertisers premium placements on radio, television and newspaper publisher sites. That division will sell an aggregated network of nearly 50 million unique monthly visitors and one billion page views, according to July’s Comscore report.

Putting more focus on digital in general and mobile in particular is exactly what Borrell Associates recommends. Their latest report projects mobile audio ad spending will reach $667 million by 2016 — up from $161 million in 2011, with the bulk of that spending coming from local advertisers. Borrell thinks that radio has been missing the boat when it comes to using their local market knowledge and sales forces to capitalize on digital and mobile ad sales opportunities.

Siriusly Streaming

Sirius XM has been streaming its programming and offering it as an add-on of $2.99 for subscribers to the satellite music service. Apparently that has been going well because now Sirius XM will enhance that service by adding programming that is not available via satellite to their streaming platform, including BBC Radio 1, programming that just last week was cancelled by Sirius XM as a satellite channel.

Rather than discontinuing its relationship with BBC Radio 1, Sirius XM is clearly using the channel to build more audience online. It will time shift the live programming to enable US listeners to listen in the same daypart that the programming is intended for. Sirius XM will also expand its coverage of BBC Radio 1’s programming and will also broadcast concerts from the extensive and wide-ranging BBC Radio  archive, many of which are not commercially available. by artists such as Led Zeppelin, U2, Lady Gaga, AC/DC, Pink Floyd, Duran Duran, Queen, The Cure and other music legends.

“We are happy to continue our valuable relationship with the BBC and thrilled to now be able to give our listeners access to BBC Radio 1 programming on our expanding internet platform as well as deliver special concert performances to a variety of our satellite radio channels. The additional programming ranges from legendary music icons to today’s rising stars whose exclusive performances for the BBC are featured regularly,” said Scott Greenstein, President and Chief Content Officer, SiriusXM.

In addition to adding BBC Radio 1 to its online offerings, Sirius XM will now offer other channels online only as well, including The Groove, CSpan, Neil Diamond Radio, Simon & Garfunkle Radio, Rosie radio, and more.

While this all kind of leaves me scratching my head, I think it’s safe to draw the conclusion that streaming is going well for the satellite broadcaster. How well is anyone’s guess, but it sure looks to me like they’re interested in keeping more than a toe in the Internet radio game…

Radioio’s Revenue Rises

IO World Media, the parent company of Radioio, has announced second quarter results that reflect revenue gains over a year ago. The company reports revenue of $473,321 in the second quarter of 2011 as compared to $191,544 for the same period in 2010, and a net loss of $197,774 as compared to $274,323 for the same period in 2010.

The company press release notes that the revenue growth is attributable to the very successful launch of RadioioLive and the Early Enlistment Program for the Bubba Army. This revenue will be recognized pro rata over the thirty-six month life of those subscriptions.

Early this year Bubba The Love Sponge joined Radioio after leaving Sirius XM last year. During an early campaign on his new station, many loyal listeners signed up for long term subscriptions, giving them access to both live and archived content as well as Radioio’s music channels.

The company’s stock, trading as IWDM, has ranged from $.05 to $.68 in the last 52 weeks and is currently at $.11.

Play It Again Sam

I’ve got my eye on Dar.fm because I think it’s a service that could really have an impact on the way that people listen to Internet radio. Dar.fm is a service that enables subscribers to record any Internet radio program. It’s one of the latest creations by Michael Robertson, one of the space’s most entrepreneurial people.

I recently got an email from Dar.fm talking about the latest improvements. The service now catalogs over 15,000 radio shows on more than 6,000 broadcast radio stations’ streams. Visit the site to search by personality, music genre, geographic location and more. Find what you want, click to record it and store it in your personal listening locker.

Robertson has recently added a new feature which takes note of all the listening choices and ranks programs in terms of popularity. Something I think will be very interesting as the service grows. Right now they’re recording over a million minutes of programming a day (more on weekdays and less on weekends).

So what are folks listening to? Talk shows are topped by NPR’s Fresh Air and All Things Considered, with Rush Limbaugh in third. In terms of popular music shows, it’s NPR at the top once again with its World Cafe, followed by KCRW‘s Morning Becomes Eclectic and one I’ve never heard of Exploring Music.

DAR.fm is essentially a DVR for radio, as reflected in its name. It’s not a new idea – Tunein, formerly RadioTime, has the same functionality built into its platform as RedButton.

Adding on demand interactivity to radio could bring lots of new listeners to stations that stream. It could be a stimulus for growing audience. It may also be a tool that makes streaming more interesting for broadcasters, particularly those who are creating good, unique content. While stations are prohibited by the DMCA from recording their programming, users are not, so it seems like a third party platform that enables the recordings is a good idea.

Will Streaming Sell More Music For eMusic?

Image representing eMusic as depicted in Crunc...

Image via CrunchBase

eMusic has always had a slightly left of center approach to selling digital downloads. eMusic offers music consumers the opportunity to pay a monthly subscription fee for access to their song catalogs and download a certain number of songs per month – $12 bucks gets you 24 songs, $32 bucks a month allows you to download up to 73 songs a month. That’s a lot of music for a pretty good price – certainly a lot cheaper than your average iTunes song.

They used to be primarily focused on independent labels, lacking the deals to add the big four record label’s music to their catalog. But that has changed in the last couple of years and now eMusic has deals with all four. They also started selling audiobooks a few years back as well.

Now they are launching genre based Internet radio streams as well. Join the club! According to Billboard, eMusic will offer streams of music curated by eMusic’s editorial staff. There are a wide variety of offerings from punk and alt-country to electronica and “fresh jazz”. Streams are available to eMusic U.S. subscribers for free for up to ten hours of listening per month. Non-subscribers may get to try them out soon as well.

So eMusic wants to take on Pandora and Spotify? I doubt it. It sounds like eMusic – and perhaps the labels it’s partnered with as well – are noticing that streaming has a positive effect on music purchases. They’re planning to add a buy button to the player, and they certainly have the buy in of their record label partners. Though it hasn’t been quantified in a while, I’ve seen data out there that shows Pandora selling lots of songs for iTunes and Amazon to their listeners.

Yep, Martha’s Vineyard Is Heaven

Martha's Vineyard

Image by Katerina Voutsina via Flickr

This is a cute, funny story about how mystifying new technology can be. A few years back, new cars were just starting to arrive with car radios that could show song and artist identification – called RDS. At the time, I was managing a group of radio stations, including one on Martha’s Vineyard (WMVY) and we were just getting the RDS system going at the station.

And an artist named Mindy Smith was out with a song called “Come to Jesus”.

So a local listener on the island climbed into her new car one day and looked at her radio to see those words, “Come to Jesus” scrolling across the screen of her car radio. And she thought her time had come.

Tee Hee…

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