Tag Archives: rdio

Painting The Town Spotify Green

The competitive landscape of online music services had a busy week, with everyone out and about in Austin at SXSW wooing press and fans. Just 3 months after announcing that they had reached 5 million subscribers globally, Spotify announced this week that they now have 6 million paying subscribers, and declared themselves the fastest growing music service ever. Their presence in Austin featured a house, painted Spotify green, where they hosted live bands.

Spotify's big green house #sxsw

Rdio announced this week that they are expanding to still more countries. Their service, which new subscribers can hear ad-free for the first six months, is now available in United Kingdom, Australia, Belgium, Canada, Denmark, Estonia, Finland, France, Netherlands, New Zealand, Norway, Portugal, Spain, Austria, Iceland, Ireland, Italy, Latvia, Lithuania, Mexico, Sweden and Brazil, in addition to the US.

Pandora hosted a “Discovery Den” that featured many well known artists, some of which also made an appearance at iHeartRadio‘s SXSW party. Rhapsody had a party, and hosted a panel as well: ‘Streaming Music: A River of Cash or up the Creek.’ The panel will bring together perspectives from all sides of the issue to examine what roles streaming music services can play for artists today and in the future. Hats off to them for that.

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Streaming’s Top Songs Chart

English: The logo for the Billboard magazine.

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…

Streaming Royalties To RIAA Topped $500 Million Last Year

2011 revenues for the record industry from streaming music royalties jumped to more than half a billion dollars, according to a year end report by RIAA. Revenues from subscripton services (like Spotify, Pandora One, Rdio, MOG, Slacker) jumped 13.5% to $241 million, and Digital Performance Royalties, paid by all other streaming services (including Pandora) rose 17.2% to $292 million.

Bread and butter

In its fiscal year ended January 2012, Pandora paid out more than $285 million in “content acquisition”, the bulk of which is performance royalties to SoundExchange. The time periods don’t match up perfectly because the RIAA report is calendar year, but you get the picture — Pandora’s paying a huge amount to SoundExchange.

Which should make for an interesting next round of negotiations for streaming royalty rates. Tim Westergren has always been very vocal on this topic, stating over and over again that he’s not against a royalty, but that the current costs are too high. With the next round of CRB hearings looming, he’s talking about it again. But this time, he’s coming to the table with over a 100 million registered users. And he’s SoundExchange’s biggest customer.

Pandora’s also got a lot of investors, and they’re working that crowd as well, including this statement in their recent SEC filing:

“Since our inception in 2000, we have incurred significant net operating losses and, as of January 31st, 2012, we had an accumulated deficit of $101.4 million.  A key element of our strategy is to increase the number of listeners and listener hours to increase our market penetration. However, as our number of listener hours increases, the royalties we pay for content acquisition also increase. We have not in the past generated, and may not in the future generate, sufficient revenue from the sale of advertising and subscriptions to offset such royalty expenses.”

This new revenue report from the RIAA shows very clearly that the recording industry is becoming increasingly dependent on the streaming industry as a very real source of bread and butter.

 

Facebook Users Like Streaming Music

When facebook introduced its music discovery platform with a list of streaming partners at its f8 developers conference in September, we knew there would be some big winners among the partnering services. Now, from a post on facebook’s own developer blog we learn that since that announcement on September 22nd, facebook users have shared songs 1.5 billion times using those services integrated apps. 

Facebook wanted to integrate music sharing and discovery and make it a more meaningful part of the facebook experience. It’s certainly been that for their partner services, which have experienced growth ranging from doubling their active users to increasing their user base 2 – 10 times.

Here’s a list of highlights, pulled from the post, of the growth some of the services have seen:

  • Spotify: Already one of the defining social music apps on the web, they expanded to the US this summer and added well over 4 million new users since f8.
  • Earbits: Y Combinator-funded startup built by a team of musicians saw a 1350 percent increase in the number of users becoming fans of the band they’re listening to.
  • MOG: Their uniquely social business model has led to a 246 percent growth in Facebook users since f8.
  • Rdio: Their strong social ecosystem has expanded with a 30x increase in new user registrations from Facebook.
  • Slacker: Available across mobile, TV, auto and web, Slacker saw a more than 11x increase in monthly active users in the month following f8.
  • Deezer: Based in France, they’ve added more than 10,000 users per day since finalizing their Open Graph integration.
There is no mention of iHeartRadio, Clear Channel’s streaming portal, which is also a partner. There’s also no mention of Pandora because they are not a partner in this integration with facebook, although they do offer their users the ability to share music on facebook through their own interface.
Elevated status in the facebook platform is not without cost – those services have to force listeners to have a facebook account in order to join. Spotify and iHeartRadio, among others, have taken some flack for this twist, and this is likely the thing that kept Pandora on the sidelines. But it appears there are already big winners in facebook’s new streamed song sharing platform, despite the high cost to services who decided to play..

Coldplay Gives Spotify The Cold Shoulder

Coldplay released a new album this week and didn’t license subscription services such as Spotify to play it, a strategy that is raising concern for on-demand services. There’s been a debate brewing about the wisdom of offering brand new releases through on-demand subscription services and whether that has an impact on song and album sales.

After withholding their new album Mylo Xyloto from Spotify, Coldplay sold more digital albums that ever before in the UK – something that doesn’t bode well for on-demand services like Spotify. DMN reports that Coldplay sold more than 200,000 units in the UK alone, 40% of which were digital sales. Figures from US sales were not yet available.

Services like Spotify, Rdio, Rhapsody and MOG offer on demand song plays for a monthly subscription fee. But artists have been unhappy with the payouts from these services, and some are removing their new albums, or even their entire catalog from the playlists of some streaming services.

In a story on this topic, CNET quoted artist and indie label owner Sam Rosenthal pointing out that 5000 song plays on Spotify would earn him $6.50. An artist would earn $.20 per song download on iTunes, or $1000 for the same number of song sales.

But does an on demand song play on Spotify replace a song download? That’s a good question and one that no one can really answer. In the CNET article, Jon Irwin of Rhapsody claims that rather than cannibalizing song sales, on demand services are cannibalizing piracy – that inexpensive subscription services appeal to the younger listener who used to download all their music illegally and now pay a monthly fee instead.

Unfortunately, higher song sales for Coldplay after holding back their new album from Spotify doesn’t help on demand services make that point…

rdio: 5 million songs, $17.5 million bucks

Rdio

Image via Wikipedia

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..

Lots of Talk About Digital Music Clouds

flickr: MiiiSH

Digital music buzz is all about cloud based streaming services these days. Apple bought Lala and Microsoft launched a new “entertainment vertical” for Bing that ties in full song streaming from Zune. Two weeks ago HP acquired Melodeo. And Google is supposedly readying a mobile music platform that will launch with Android 3 and include anywhere access, paid downloads and subscription aspects. The big tech companies seem to be scrambling to gain position in the cloud based streaming music space.

Meanwhile Forrester has released a report that finds that cloud based streaming on mobile devices is still more buzz than reality. The new study “360 Music Experiences: Use the Cloud to Target Device Use Orbits” focuses on the impact that cloud based services have on the devices consumers choose to listen on. 41.6% of Adults 18+ are still tied to their pc as their primary source of digital music. MP3 players ranked second at 32.5%, music-enabled phones at 12.1% and home streaming devices at 11.1%. Mobile access to music services through smartphone apps, while certainly an area of great activity, has yet to have a substantial impact.

Keep in mind that these findings are based on 3Q 2009 data, and many (but not all) cloud based services are either still in the works or have launched since then. But the report expects listeners to stick with a device of choice for cloud based streaming even with the option to listen anywhere on any connected device.

In addition to the question of what device listeners choose to listen with, there’s the issue of how the space will monetize. MOG, Rhapsody, Rdio, and others are betting on a subscription model that enables listeners to pay a monthly fee for on demand streaming. MSpot and MP3tunes offer storage space or “music lockers” for your personal music collection – free for small amounts of storage, monthly fees for larger amounts. Google will likely pursue an ad based strategy in keeping with its other platforms, while Apple may create a hybrid that expands on its iTunes (pay for downloads) brand, and incorporates its new mobile ad platform iAds.

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