In the UK, royalties from online services jumped by 32% last year, according to a report from PRS for Music, the Performing Right Society in the United Kingdom for composers, songwriters and music publishers. In fact, royalties from online services (including both streaming and downloading) now produces more revenue than radio, according to the new report.
The growth figure reported by the UK body is very similar to the percentage increase recently reported by SoundExchange, the licensing and collection organization for performance royalties in the US. The 2012 reported figure for royalties collected in the US in 2012 was $502.2 million, a 35% increase over the 2011 number.
What’s different of course is that in the US, performance royalties are not paid by broadcast radio services, so a comparison of online versus royalties from radio sources cannot be made.
On May 23 in Brussels we’ll be discussing the business of Internet radio and online audio at RAIN Summit Europe. View the speaker list and agenda here.
In the marketplace of streaming music services, rdio is one to keep an eye on. The on-demand service was launched last year by Skype founders Janus Friis and Niklas Zennström. Last week they revealed a new round of funding worth $17.5 million.
Rdio’s main selling point is its on demand feature that allows you to build playlists with any artists, albums, or songs that you want to listen to. Once you’ve built a playlist, you can stream it from your computer or other connected devices, and share it with your friends. You can also sync playlists to your mobile devices and listen during times when you are not connected.
On demand access to Rdio’s 5 million song library wherever you want it comes with a price – after a one week free trial Rdio charges $4.99 for access on your pc only, or $9.99 for web, mobile and other connected devices such as Sonos, a tabletop connected device that Rdio recently announced a partnership with.
Rdio’s integrated with facebook, so you can sign in with your facebook account and share music and playlists with your network of friends. In addition to playing music that you have placed in your collection or in playlists, you can choose to listen to Artist stations, or stations built from your Heavy Rotation or Collection. There’s also a recommendation feature that you can turn on or off.
Rdio’s got a lot going for it, with a nice combination of on-demand streaming as well as features that let you sit back and listen when you don’t feel like actively driving your listening experience. With kinda famous founders and the new money they’ve just rounded up, they’ve got staying power as well..
One of the easiest ways for stations to expand their programming to please their audience is with Christmas music. Tis almost the season, listeners will be looking for their favorite versions of White Christmas and Jingle Bell Rock before you know it.
AccuHolidays, the holiday music version of AccuRadio, offers an incredibly deep assortment of channels – Old Fashioned, Classical, Rudolph Radio, Jazz and Reggae channels, they even have a channel that only plays the songs Blue Christmas and White Christmas (in every rendition available). Now AccuRadio has launched Chicago’s Christmas Channel, available on the Chicago Radio Online website.
Chicago is the homebase of AccuRadio, Chicago Radio Online is an online station similar to AccuRadio in technical features, but local to Chicago in its programming. The station features many well known Chicago personalities and is programmed by veteran radio air-personality and programmer Tommy Edwards.
There are several easy ways that stations can stream a holiday side channel. Slipstream Radio and Custom Channels are two companies in the business of building and managing a holiday channel that stations can add to their online programming options.
There’s definitely a trend among online behemoths (like Google, Apple) to purchase hip streaming music platforms (like Simplify, Lala) as tools for an upcoming entree into the streaming music marketplace.
Amazon will be shutting down the service and reportedly focusing on Songza, a recommendation based streaming service purchased by Amie Street in 2008. Customers who have credit at Amie Street can use it before September 22.
The company was started by several students at Brown University in 2006. Amazon invested in them in 2007. They’ve been kind of struggling since then, trying to be innovative, and work with the big labels, and hold true to independents, and make some money.
So now Amazon joins in the race to launch the perfect streaming music platform. There’s plenty of room in the pool..
JL NOTES: There are some reporting that Amie Street founders will remain independent and working on Songza and that Amazon takes over only Amie Street the download platform.
Sony has announced that they will launch an online cloud based music service called Music Unlimited before the end of the year. The service will stream music to Sony’s TVs, Blu-ray players, and connected mobile devices, which will also be able to cache and store songs for offline listening as well.
Cloud based music services that store music online and stream it on demand are the next coming for the digital music industry. Google is reportedly planning to release its own version before the end of the year, Apple purchased Lala with a similar intent, and several other services are already available.
Sony’s version, Music Unlimited, will include common playlist building features along with Sony’s SenseMe technology which can detect personal music preferences and suggest music based on those criteria. Music Unlimited is based on the Qriocity platform, Sony’s cloud based streaming delivery platform.
Smartphones and other Internet radio devices have increased Internet radio’s mobility and moved Internet radio into much closer competition with broadcast radio, according to a briefing of the Station Resource Group. Wireless Internet radio will not completely replace broadcast radio, however it will continue to expand.
Handheld devices are becoming a popular mobile Internet radio listening device, and although easy listening is complicated by the need for specialized applications per station or service and device operating system, that will likely change with updates to browsers and technology. New interest and developments are heating up for connected automotive devices, which will grow listening to Internet radio as well. However the study notes that these in-car listening stations will also offer AM/FM receivers and won’t replace broadcast technology in cars.
An important aspect of radio’s new delivery systems is the screen that many devices have that can deliver graphical displays and even video. So as not to be considered deficient on these devices, broadcasters must develop alliances and strategies for offering visual content compatible with their audio content.
It’s an interesting briefing that acknowledges the increasing impact the Internet radio is having on broadcast radio stations. There’s wisdom in the recommendations that radio begin to identify itself as a visual medium and develop visual content solutions that can entice listeners. This video by Slate Magazine gives an overview of some Internet radio stations’ visual approaches and also made me think a little more about videos as well…
Late friday the New York Times reported that Apple had acquired online streaming music service Lala. Lala is a service that allows listeners to either buy and download songs for 79 and 89 cents, or stream the songs an unlimited number of times for 10 cents.
Apple obviously was not interested in the music download portion of Lala’s business, since they already have iTunes, the leader in that marketplace. What this acquisition gives them is a streaming platform, for listeners who prefer streaming music on demand rather than downloading and transferring music to personal devices.
Streaming music has become increasing popular with the growth of connected mobile devices. The growing popularity of streaming music from mobile devices has spurred interest in on-demand streaming from a music cloud that can be accessed anywhere from any device and is easier than downloading music and syncing with multiple devices. Some believe that cloud based streaming will eventually replace music downloading.
Apple appears to be at least hedging its bets with Lala – on the one hand, promoting cloud based streaming to replace downloads would hurt iTunes song sales, but give them a place in the on-demand streaming game.
Lala recently announced deals with Facebook and Google Music which promise to grow traffic and awareness of the service. The service had been reported to be in trouble financially. No word on the price that Apple paid on the deal.
NPR’s digital platform is diverse and often sets the standard for ways that broadcast stations can expand content online. As evidence of that, this week they debuted the new album by Norah Jones. Debuting this album as part of their “Exclusive First Listen Series”, NPR offers a huge value proposition to listeners who can go online and listen to Norah Jones new album The Fall song by song, or in its entirety.
The album, by Grammy award winning Jones, features songs written by Ryan Adams, Jesse Harris and other noteworthy musicians. It will be released on Blue Note Records on November 17th, which means that for two weeks you can hear it exclusively on NPR. Previous albums debuted in this series include Bjork, Moby, Regina Spektor and Leonard Cohen. A pretty diverse bunch for a brand that used to be primarily associated with news or classical music.
I’m listening to Norah’s album now and loving it. The start of the album was preceded by a preroll for Bose. Apparently, NPR is not shying away from an ad supported model online…
There’s enormous buzz about Spotify, the European streaming music platform that promises to launch before the end of the year here in the US. I wish I could say I’ve tried it, but can’t unless I fly over to Europe for the weekend. Spotify is a music service that allows listeners to browse and stream songs on demand from a library of 3.5 million songs. Listeners can also build playlists, and their interface is supposed to be very intuitive and fun to use.
According to CEO Daniel Ek, Spotify aims “to provide the world’s biggest catalogue of music that’s quick, simple and fun to use.” He says they’ll compete with Napster and Rhapsody here in the US (among others) but that only Spotify offers both an ad supported and subscription ways to enjoy the music.
Two main things about Spotify make it a good bet for success. On demand song streaming is appealing to music fans. Recent research has shown that as on demand streaming of songs increases, illegal song downloading goes down. Music fans are content to legally listen and share their music via an on demand streaming service rather than illegally download the music. Research also shows that fans would consider using an ad supported platform to get their music for free. Spotify’s platform gives music fans the chance to hear what they want when they want it, without paying for it. Legally.
Everything I’ve read mentions their nifty platform, which requires a download onto your computer. They do not yet have an iPhone app, and they have a Google Android app that has not been released.
Already valued at $242 million, Spotify will be under enormous pressure to generate both advertising revenues and premium subscriptions to appease both their VC investors as well as pay royalties to the labels. In an article in Techcrunch over the weekend, guest author Michael Robertson is skeptical that they can make it given current royalty rates.
I have to admit I’m curious – both to see the service and to see how well they can monetize it. It will be an interesting test of both the ad supported and premium subscription marketplaces. May they thrive…