Electronic dance music, EDM, is getting a lot of buzz lately. Clear Channel’s iHeartRadio launched an EDM channel called Evolution in November with quite a bit of fanfare, including mixes curated by famous DJ’s like Pete Tong and a party in NYC hosted by Afrojack, another world famous EDM style DJ. Evolution quickly became the most popular online only channel on iHeartRadio. Next Clear Channel flipped its new station in Boston, WHBA, to the format.
As still more evidence of the popularity of the format, Billboard decided last week to start a new Dance/Electronic Songs Chart.
But EDM is not a new radio format, nor is it newly popular. It’s been a huge hit online for years, as stations like Digitally Imported know. DI.fm is the biggest electronic music station in the world, with more than 50 channels and more than a million listeners, according to Ari Shohat, Founder of the station. He says that EDM is a very broad category of music and the new stations and chart are focusing on the pop acts. One of the first Internet radio stations, DI launched in 1999 and plays “addictive electronic music” and offers listeners the long tail, with 50 channels of everything from House and Hardcore to Techno and Trance.
DI has had a large listener base for a long time. The new wave of more mass appeal stations online and on-air, as well as the new attention to the format from Billboard are benefitting from a format that has been alive and well online for a long time. EDM may be the first format to actually take hold online and then move on-air, but it probably won’t be the last..
If venture funding is a measure of the success of online music then things are going well, according to a recent article which claims that music industry ventures raised $621 million in 2012. The article also points out that funding to music ventures is up 34% while funding across all sectors has dropped 10%. You may want to take some of this with a grain of salt however, an article in Billboard a few weeks ago points out that some of the companies counted in that big number are actually not music services at all.
Nonetheless, there were a number of services that got big dollars last year, including Spotify, Deezer, TuneIn, SoundCloud, Senzari, Soundrop, exfm, Songza, Jelli and The EchoNest, all services that are directly related to the streaming marketplace. According to my tally, streaming related services took $328 million in funding last year, with Deezer and Spotify leading the charge.
Triton Digital is getting ready to launch an online ad exchange for audio ads that will be the first platform to enable automated buying and selling of online audio impressions. a2x is the first audio advertising exchange that enables advertisers to buy targeted online and mobile audio inventory in real-time. The solution provides a system for managing, buying and selling third party advertising campaigns. In addition, a2x facilitates the execution of digital advertising trades between third parties, providing an information database featuring lists of advertising bid and offer values.
To offer targetability, the a2x solution integrates consumer data from partner eXelate which provides data and insight on online purchase intent, household demographics and behavioral propensities that enable digital advertisers to make optimal marketing decisions.
Following this announcement came one from media buying division of worldwide ad agency behemoth WPP, which includes GroupM, that they would be partnering with Triton’s a2x platform to offer a real time audio ad buying technology to ad partners. According to coverage of this announcement in AdWeek, Triton Digital has access to digital audio inventory from publishers like Pandora, Cox Communications, NPR, and Slacker Radio, though not all publishers are yet on board for RTB (real time buying) advertising.”
While banner ad exchanges have been around for a long time, both the launch of an automated real time buying solution for streaming audio ads, and the partnering with a major worldwide ad agency buying group are major announcements that hold the promise of having a significant impact on the online audio marketplace. It will streamline cross platform integration of streaming audio ads which in turn will stimulate spending.
In a nod to the increasing share of music that is getting listened to via streaming platforms, Billboard has added a Streaming Songs Chart to its weekly listings. Last spring Billboard started charting top songs played by On Demand services, this list will cover those and add the songs played most by streaming services. Macklemore & Ryan Lewis holds the top spot on Streaming Songs with 1.45 million total streams in the U.S. Services included in the reporting are “such services as Spotify, Muve, Slacker, Rhapsody, Rdio, MySpace, Xbox Music and Guvera.”
The data comes from Nielsen Soundscan and Nielsen BDS data – Nielsen SoundScan measures U.S. point-of-sale of recorded music product. Nielsen BDS tracks U.S. radio airplay and music streams. Both systems power many of the Billboard charts. Nielsen recently reported that music purchases are at an all time high, up 3.1% over last year, driven by digital sales. For 2012, sales of albums and track equivalents are down slightly at -1.8% vs. 2011. Digital Albums are up 14% and Digital Tracks are up 5%. CD sales declined 13%.
Pandora meanwhile has posted a recap of sorts of last year on its blog, noting that last year listeners to Pandora created 1.6 billion stations and listened to more than a million different songs by 100,000 different artists. I’m thinking that data is probably at least as deep in terms of sample size as the stuff Nielsen is collecting…
Royalty payments from SoundExchange set a record in 2012, and exceeded the previous year by 58%. Payments to artists for performance made by Internet radio, satellite radio and cable radio services hit $462 million. Payments for performances made by subscription services are not included in these figures.
“SoundExchange’s increasing annual royalty payments are a positive indication of where the industry is heading. As digital radio continues to grow, so should the amount that performing artists and rights owners receive for the use of their content,” said SoundExchange President Michael Huppe. “Our distribution represents another record-breaking year for SoundExchange, but more importantly, it means more money in the pockets of the creators of music. We’re optimistic about the industry’s future, and look forward to maximizing digital performance royalties for the people we serve and finding new ways to propel the music industry forward.”
To be accurate it’s important to understand that not all of this money ends up in the hands of “creators of music.” According to Billboard, first, SoundExchange takes 5.3% off the top for administrative fees. After that, the “net” figure gets divided up as follows: record labels, or owners of the sound recording, get 50%. Performance artists get 45% and session musicians and backup singers get 5%.
Earlier this year it was estimated that Pandora was responsible for 37% of that record breaking number collected by SoundExchange. While SoundExchange doesn’t specifically report the figure they pay for performance royalties, they do report a “content acquisition fee”, which topped $182 million through their Q3 of 2012.
eMarketer says that this will be the year that smartphone usage in the US will cross the 50% threshold, meaning that half of all mobile users will be using smartphones. Standing at the front of the line of services that benefit from this massive shift to online mobile access are Pandora and Twitter. These two platforms have as many, or in the case of Pandora, more users accessing them via mobile than via desktop.
Late last year comScore released a beta report of their Media Metrix Multi-platform measurement report, which merges usage data via web, smartphone and tablet into one number. providing an excellent snapshot of a service’s user base. It then assigns a multi-platform ranking that can be compared to the standard Media Metrix ranking. Sites with a higher multi-platform ranking are the ones that have lots of mobile users.
Google is number one on both rankers, and the top ten sites don’t shift much, meaning that they maintain their user base when mobile usage is factored in. But Pandora benefits greatly from this multi platform measurement approach – their rank moves from 61 to 23. No other site on the top 30 enjoys such significant lift from adding in mobile to the ranker.
Streaming news at CES 2013 last week was all about integration into cars, with big announcements from Ford and JacAPPS, Pandora and Chrysler, Livio, Tunein, and lots of others. The news about Sprint and Nextradio is big as well.
Connected cars are a reality now, and Pandora has played a large part in that evolution. Pandora’s been concentrating on getting their service integrated into connected devices for a long time, and their efforts have had a very large impact. They’ve led a coordinated effort which can take a lot of credit for the high level of interest in connected cars at this year’s CES. Sure, lots of companies are enjoying the advantage of that increased buzz, that’s how it works – pioneers lead the way, open the doors, and others follow, and hopefully flourish.
I’ve said it before and I think it bears repeating – the Internet radio industry has benefitted enormously from having a giant like Pandora in the space. They’ve generated lots of buzz and innovation that others have and will continue to benefit from in terms of listeners as well as technology. This Techcrunch interview with Pandora CTO Tom Conrad offers a nice overview of where they have come from, and how they do it.
The big audio news out of CES yesterday wasn’t about streaming as Sprint announced that it will begin enabling FM chips on select Android and Windows smartphones during the next three years. This makes them the first US wireless carrier to make a deal with broadcasters to deliver FM radio on some of their phones. Broadcasts will be delivered through the NextRadio tuner, a receiver application for FM and HD smartphones developed by Emmis.
NextRadio accesses broadcasts of local FM stations and uses the phones data channel to integrate interactive elements from song and artists id, social tools to advertising info and messaging, creating a hybrid radio experience that is much more similar to an online radio experience – because it is partially online.
Fared Adib, senior vice president, product development and operations at Sprint, stated, “We look forward to bringing Sprint customers another entertainment choice through NextRadio. This new, easy-to-use service adds another dimension to the versatility of our wide array of smartphones and will deliver a new avenue for thousands of local radio stations across the country to reach our customers.”
With smartphones being used by more than 50% of consumers in the US and growing, this is big news for radio broadcasters. The NextRadio tuner, which provides an enhanced listening experience, has no doubt been a critical part of the strategy to get Sprint on board. Apparently, according to Inside Radio, the deal also includes a commercial spot bank for Sprint. There’s still work to be done – Apple, At&t and Verizon are not involved in this deal, but it’s a good day for FM radio, that should have a positive impact on HD as well. I’m looking forward to seeing that data on who listens.
Sprint’s announcement came out of CES yesterday. It’s interesting to note that broadcasters and NAB have been at odds with the Consumer Electronics Association, who produces CES, because CEA opposed broadcaster attempts to mandate FM chips in mobile devices.
It’s CES week, something that you probably aren’t aware of only if you live in a cave, because digital and devices news coming out of Vegas is fast and furious. There are always interesting announcements about the streaming audio space from CES. The first one to grab my attention came from a press release from JacAPPS, a radio focused app builder that will be the recommended mobile app development house for their new Ford Developer Program.
This is a big deal. Ford announced yesterday that they will “launch an open developer program that enables software developers to directly interface with the vehicle and create apps that will enhance the driving experience.” They become the first car manufacturer to offer an open api platform and invite anyone to create apps for it.
In particular, Ford is putting the focus on voice activated apps. “Offering voice control so drivers can keep their hands on the wheel and eyes on the road has proven to be popular with our customers. Now, with an even faster adoption rate of smartphones, there is a need for a renewed focus on voice control for the unique capabilities of these devices, especially for the use of apps.” said Hau Thai-Tang, vice president of Engineering, Ford Global Product Development.
Developers who have a great idea for an app but need some help building it can turn to jacAPPS who will be the recommended mobile app development house for the Ford Developer Program. The company has been chosen to provide development and technical support to third-party developers wanting to create voice-activated smartphone apps for Ford SYNC AppLink.
jacAPPS will provide support for all developers interested in integrating their apps with the SYNC© AppLink™ system for voice commands and other functionality. “We have been training and testing apps on the system for several months and we’re available to help the radio industry and all mobile app developers become major players on the connected car dashboard,” says president Fred Jacobs, while at the same time announcing that Greater Media stations will be the first fully integrated in the new platform.
- Ford Launches App Developer Program Marking New Course for Customer-Driven Innovation and Value Creation (sys-con.com)
- jacAPPS Chosen To Support Ford Developer Program; Debuts Mobile Apps For Greater Media Stations (allaccess.com)
- Ford introduces 9 new apps for the car at CES 2013 – @CNET (ces.cnet.com)
In casting around online I found this website. Whymusicmatters.com was created by NARM and RIAA as a resource to help consumers find authorized online music services. The site also features videos by various artists singing about the value of music.
“For the first time, in 2011 digital music revenues surpassed those generated from physical sales and that marker was reached because of a breathtaking array of services and platforms embraced by music companies.”said RIAA Chairman & CEO Cary Sherman. ” We understand that with so many options for accessing music online, users are eager for more information about which services are legitimate and what kinds of functionality they offer. That’s why we’re excited to be partnering with NARM and digitalmusic.org to launch whymusicmatters.com, which will hopefully make it easier for fans to access and discover sites that offer their favorite music.”
I’m glad to have found a resource where I can determine if a service is authorized, since it’s one of my personal policies to avoid promoting services that are not. But I’m disappointed in the site – apparently it’s really a site to help consumers find RIAA/NARM’s preferred online music services. It’s really hard to find Internet radio stations because they are listed as “statutory services” under streaming. All the premium subscription services are listed and linked to individually, with logos and descriptions, on that page, and then at the very bottom there’s a box that says “Statutory Services” which opens a new page where the listener has to click through hundreds of alphabetized radio stations (no logos, no descriptions, no links) to find one.
Unfortunately, this site is a glaring in-your-face example of a bad business partnership. Internet radio services, Pandora in particular, are paying a lot of money in royalties to SoundExchange, the royalty collection arm of the RIAA, and in return they get a listing buried deep in the site with no logo or link. Is there any other business you can think of where the vendors treat their retailers so badly? Because that’s what this is, it’s streaming services buying the rights to content and offering it to consumers. And clearly the RIAA and NARM are bad business partners for Internet radio…