This morning in my email, one from Spotify offering me a bunch of ready made playlists for New Year’s. The Top 100 Songs of the Year on Spotify, Most Popular artists, Most Popular Female Artists, Most Popular Male Artists…you get the idea. All waiting for me to listen to and share with my social networks to celebrate the arrival of 2013.
This is very smart marketing by Spotify. The biggest party night of the year and they’re offering up easy soundtracks for the party. It’s an excellent use of playlist based streaming, and a great way to highlight their music library. I’ll bet they get a lot of traction and new listeners from it.
Pandora is offering a slate of End of the Year genre stations as well, including 2012 Top Pop, Adult Rock, College, R&B and Hip Hop, and New Years Eve Party Radio. Built in soundtracks for your party. iHeartRadio is offering one channel, called Party 2013 Radio.
In 2013 streaming audio services will continue to look for ways to grow audience by making their offerings as enticing as possible. Personalizable channels that can be tailored for special events are an easy way to highlight interactive features and hook listeners. In fact, those channels are quite possibly a platforms best marketing tools..
Happy 2013 to you and yours, may you enjoy the streams of your dreams in the coming year…
News that Nielsen will purchase Arbitron is good news for online radio services like Pandora. Nielsen, which measures many media segments, already has a strong foothold in digital and cross platform measurement, not only in the US but globally. Yesterday’s announcement that they will purchase Arbitron was quickly followed by statements that they will measure online radio services like Pandora as well.
I call this excellent news. Arbitron, which has dallied in Internet radio measurement several times in the past, recently denied Pandora a place at the table when they sought to be measured alongside broadcast radio counterparts. Pressure from those broadcasters, who spend a lot of money with Arbitron, certainly appeared to be one of the reasons that the company decided to measure streaming only as an adjunct to broadcasts. That decision enraged advertising agencies as well as online only services.
I think Nielsen’s entry into radio and digital audio measurement would be an excellent thing for the marketplace. Their multi-media measurement platform and global footprint likely mean that broadcasters won’t be able to flex their muscle to influence company decisions that are better made with a broad perspective. Nielsen is a company that understands that today’s advertisers need measurement tools that can enable accurate media placement across many platforms and technologies. Folding radio into that mix can benefit radio as advertisers are able to view it as an important part of a larger multi media landscape.
While online radio battles publicly for lower performance royalties lately, satellite radio learned on friday that their rates would increase slightly, but remain remarkably lower than those paid by streaming services. All of these royalty payments are paid to SoundExchange. Beginning in 2013, satellite radio will pay 9% of its revenues to SoundExchange, a 1% increase over this year. The rate will increase by .5% each year after that until 2017.
Webcasters like Pandora meanwhile pay approximately 50% of their revenues to SoundExchange, and attempts to lower that fee have been met with fierce condemnation by record companies and artists. The Internet Radio Fairness Act calls for lower rates for streaming that would be closer to those of satellite radio. Broadcast radio in the US does not have a performance royalty obligation.
This announcement that the Copyright Royalty Board has reviewed all the information and chosen to maintain low percentage of revenue royalties for satellite ratio can only help to validate the argument that streaming royalty rates for webcasters are unfairly high. While I won’t pretend to understand all of the ins and outs of the legal case that was presented at the CRB hearing on this matter, I think I do know enough about the lay of the land to be concerned about the future of Internet radio. It would certainly appear that record labels, and possibly even the CRB have set it sights on the industry, arguing fiercely for much higher rates than other technologies pay, and refusing to budge in negotiations. Now this has been validated by a government agency, meaning this was no mistake…
This morning’s Inside Radio reports that Hubbard owned WTOP will no longer insert ads in its streams, opting instead to simulcast 100% of its broadcast programming online. This is a decision made earlier this year by small market broadcasting group Saga Communications, who at the time blamed imperfect ad insertion technology for its decision.
The biggest reason that a broadcast company would opt to simulcast 100% of its programming rather than inserting different ads into its stream would be that Arbitron will only measure the online audience and the on-air audience as one if the station simulcasts the exact same thing on the stream as it broadcasts. There’s nothing wrong with Arbitron’s thinking in this regard – it would be flawed for them to represent the two audiences (streamed and broadcast) as one if the programming were not completely identical. That would be misleading to advertisers who might look at the combined audience number and conclude that their commercials achieved that reach when they had not.
WTOP is up front about the reason for its move. Inside Radio quotes SVP/GM Joel Oxley : “Since WTOP is now a simulcast, those listeners can now be added to our Arbitron ratings,” he says. “For WTOP even a slight move up in ratings can mean a significant rise in revenue.” For the top billing radio station in the country, that can make a big difference.
This move by WTOP signals a growing interest by broadcasters in blending their audiences into one to create ratings uniformity. It’s a clear decision to sell the audience as one, rather than two separate audiences. It makes sense in some ways, but there are problems as well. Ads created for over the air listeners often have a call to action like “Call this number” while ads that are streamed should have an online call to action. As well, streaming ads have more targeting and tracking capabilities than broadcast ads do. But times are tough and revenues are down. Broadcasters, like everyone else, are forced to take a hard look at their options and in a case like this prefer the one that promises a more immediate uptick for revenue.
Fred Wilson, a partner in the investment firm Union Square Ventures, is a music lover and his company is invested in several companies in the streaming audio space including SoundCloud, Turntable.fm, and Targetspot. Wilson has been thinking and talking about monetization of streaming audio services, and his ideas are worth repeating.
In a recent interview, Wilson talked about advertising as a revenue model for streaming services. He sees the radio advertising market, pegged at $17 billion, moving online as listeners transition more and more to listening on smartphones. As that happens, services like Pandora, Rdio and Songza benefit, but so do artists.
In his blog post this morning, Wilson writes about online ad revenue models, and it’s a very interesting post for anyone in the business. He outlines the complexity of the online ad marketplace, and concludes that scale is a very important factor for success in the advertising revenue model. Dollars are limited, and with more and more services going after them, rates are dropping.
Pandora is certainly the service that is best positioned to test this out – they have the scale and are aggressively pursuing an ad revenue model. Each time they gain a dollar in advertising from the general $17 billion radio revenue pool, artists win too, because they get paid for music played by Pandora, but not for music played by broadcast radio. Right? So that means the artists and their labels should want online services which are pursuing ad revenue models to succeed, doesn’t it? Just sayin…
Are you using Soundcloud? Lots of people are – 180 million users per month in fact. Soundcloud likes to think of itself as the Youtube of audio, it’s a platform that enables users to share, listen, and upload tracks. They recently announced an upgrade that offers social enhancements and an improved user experience.
Users upload ten hours of audio every minute to Soundcloud, according to new stats recently revealed by Eric Wahlforss, Founder and CTO of the Berlin based company. Audio content creators connect directly with their audience and offers social tools that enable sharing and discovery. Users do not need to register to listen, but registered listeners can build playlists, share playlists, and more. It’s an easy way for musicians to share music, radio stations and/or personalities to share programming, and of course, families to share recital performances.
Soundcloud is also making specfic efforts to cultivate content partnerships that would expand their audience. Last summer they hired a producer from WNYC, an NPR affiliate, to pursue partnerships with audio providers. There’s not much info on the revenue model at this point.
Recent moves by Katz360 and Triton Digital indicate that the streaming audio marketplace may be heating up, with new players signing up to have those firms sell their inventory.
Triton Digital recently announced a big deal with Microsoft to sell audio ads on their Xbox Music streaming platform. Microsoft intends Xbox Music to be the platform that their customers use to listen to music, calling it a 30 million-song global catalog powered by the one service that integrates your music experiences across your tablet, PC, phone and tv. Triton Digital will sell ads and provide analytics for the service.
Now, this is a big deal for Triton, one that could easily change the focus of their entire sales organization, not to mention the streaming audio marketplace, creating a lot more highly targetable inventory.
At the same time, Katz360 is changing things up as well. First came the announcement that Brian Benedik was leaving, followed by an announcement that Mort Greenberg would be the new President. Greenberg, who was formerly head of sales at Nokia, apparently brought a deal to sell Nokia ad elements, and at least some of his sales team from Nokia, with him to Katz360. According to his Linkedin profile, the plan is to rebuild and rebrand this digital unit (Katz360) as a leading global local & location interactive ad Network and representation firm.
So, a couple of big deals that could have a huge impact on the streaming audio ad marketplace, increasing the inventory, level of targetability, and opportunities for advertisers, not to mention the level of sophistication of the sellers. I’m thinking this is all a very good thing indeed…