Mobile music service Thumbplay has signed up over half a million trial accounts since it launched in March. Thumbplay offers unlimited music streaming for a monthly subscription fee of $9.99.
The downloads are for an initial free trial period, and although Thumbplay won’t say what their conversion is, Techcrunch points out that even at just 10% conversion that is $500,000 a month in revenues.
That sounds like a business model to me.
Some more interesting info on the service. Ninety percent of the use is on smartphones, although Thumbplay does offer a desktop app as well. Most of the subscribers are male, 25-34 years old. 39% of smartphone listening is on iPhone, 36% on Blackberry, and 25% on Android. Thumbplay’s one of the top 100 free apps in the iPhone app store.
And their promotional video/take off on an infomercial is amusing too.
The service is not yet available in the US, but they expect to open up to beta testers in the next month or two here in the US. It offers free streaming or downloads.
In addition to lots of funds, and the most curious name I’ve heard for an online music service, Guvera has a unique revenue model. Something that, to my knowledge, has not been tried thusfar.
Guvera will sell channels to advertisers, who will sponsor channels with content that gets selected by the brands (or the agencies representing them) based on “personality”; there’s an assessment tool companies can use to determine which artists or specific songs fit their brands and target audiences best. (The actual songs are not chosen by the advertiser, but are tagged for use reaching certain target customer criteria.) Advertisers can add other criteria such as location and then set a price they are willing to pay per listener on their channels. The revenue generated is shared between Guvera and the music labels (of course). Techcrunch reports that advertisers include McDonalds, Johnson and Johnson, and Harley Davidson.
Guvera plans to do deals with all the record labels as well as movie studies and television networks, and offer all the content using the same ad-sponsored channel delivery model. They just announced a deal with Universal Music Group. David Ring, executive vice president of business development & business affairs at Universal Music Group’s eLabs, said the hope is that Guvera will attract people who simply won’t pay for music online. “What I think is incumbent on us in the new world that we’re living in is to make sure we try to segment the market,” and have something to offer the segment that’s getting its music free — and illegally — online,”
In a recent interview, Guvera CEO Claes Loberg explained that this ad model is not about cost per click or cost per thousand impressions, instead it’s about the cost of engaging a target customer. He says the service is an engagement tool for advertisers.
Engagement is the elusive goal of most advertiser’s campaigns. CPMs and CPCs are definitely inadequate standards for measuring engagement and the idea of putting the focus more on buying a customer’s attention is a good one. The challenge will be in teaching the old dogs new tricks – agency media folks like their metrics just-the-way-they-are-thank-you. Nonetheless, letting advertisers participate in selecting and pricing their audience? I’m definitely intrigued…
Spotify, the European on-demand music streaming service that has taken Europe by storm, will apparently delay a US launch. For several weeks now there have been reports that the major labels were putting pressure on Spotify to abandon a free, ad-supported streaming model. The New York Times recently reported that major labels, already involved as backers with free ad-supported services like MySpace and Imeem, aren’t eager to license their catalogs to Spotify on that basis.
And they have a lot to say on the matter. “On-demand services have to negotiate private deals with the labels – there is no compulsory license, and the deals are not public.” according to David Oxenford a legal expert in streaming audio licensing.
But how much is the new Google music platform impacting this? Google Music is now driving listeners to Imeem and MySpace/iLike – the two services that are licensed by the record labels to stream on-demand. With that deal in place to support the two services that the record labels are already invested in, would they want to see Spotify come in and disrupt the market for on-demand services? Given some time, and the preference they’re getting from Google Music, Imeem and iLike (owned by MySpace) should be able to build their brands as destination sites for on-demand music.
Instead, the record companies would like to see Spotify offer their service on a premium basis, to those that subscribe. “We like Spotify as our partner in Europe, but we would like them to move more toward a paid subscription environment,” said Thomas Hesse, president of global digital business at Sony Music, as reported by the New York Times. Word is, Spotify is not happy about coming to the US with a paid-only model, hence they have delayed their launch.
A new study from RTDNA (Radio Television Digital News Association) sheds light on the challenge local stations have maintaining their websites. Only 38 percent of news directors responded that they’re comfortable that their stations are on top of new technology. TV Web sites have increased the number of live newscasts and audio streaming compared to a year ago. Radio stations have increased the use of pictures, audio, streaming, video clips and podcasts.
While the study finds that most local broadcast stations have added staff this year for their online efforts, it also finds the stations lacking in management level expertise for those platforms. “The latest RTNDA/Hofstra University study holds a mirror up for us to see the immediate need for more editorial supervision and management vision when it comes to our news web sites,” said RTNDA Chairman Stacey Woelfel. “These sites have never been as important as they are now and are, of course, a primary path for us to deliver news to our audiences — now and even more so in the future. This research gives every news director in America something to examine in his or her own newsroom.”
Meanwhile, NPR has identified a similar craving for local news online. They recently received $3 million in funding to launch a new journalism project that will focus on providing in-depth, hyper-local coverage on community-specific issues on an online platform. According to a report in Techcrunch, certain stations will pilot projects to provide hyper-local news of interest in their communities, by hiring journalist bloggers to gather news and info on specific topics. In addition, the pilot stations will have access to video from PBS’s The NewsHour with Jim Lehrer and other PBS programs, and will be able to share their content as well.