There appeared to be an overabundance of digital music streaming services before Apple’s iTunes Radio became a reality last week, so it stands to reason that a shakeout—if it wasn’t already on the horizon—could now be only a matter of time.
Well-positioned players such as Pandora, Spotify and Clear Channel-owned iHeartRadio are probably going to be able to absorb hits from the new Apple competition, said Paul Verna, eMarketer analyst, though names like Rhapsody, Rdio, Slacker, Mog and others could be in trouble during the coming months.
"ITunes Radio is going to disrupt the space," Verna explained. "People’s phones are their MP3 players these days."
Indeed, since consumers are becoming rapidly more mobile with their digital consumption, Apple could be in the cat bird’s seat with the iPhone. Per ABI Research, 294 million consumers will utilize Apple’s mobile iOS system—just updated last week with iTunes Radio packaged in—by year’s end. And to Verna’s point, a big chunk of those users are already listening to a digital streaming service on their iPhones, giving Apple marketers device-level opportunities to push iTunes Radio that competitors simply don’t have at their disposable. To compare, 13-year-old Pandora has some 200 million users, leading the pack, while younger Spotify, on the other hand, has more than 24 million.
Marketers for the Rdios and Slackers of the world suggest that Apple will create more awareness around streaming music—benefitting players on the scene from end to end.
"Across streaming services, you are seeing a tremendous amount of momentum," said Carter Brokaw, chief revenue officer for Slacker. "And I think Apple’s announcement has contributed to it. It’s brought a lot more notoriety to the idea of streaming radio being a very big and viable business."
Verna from eMarketer added, “An all-boats-rising scenario is possible. At the same time, it could be that Apple’s huge presence will take business away from others.”
Mark Simpson, president of digital marketing firm Maxymiser, was blunt when predicting iTunes Radio’s impact.
"It cannot fail to affect the space just because of audience," he said. "Any radio station is about audience. iTunes has a massive user base. Even if only 5 or 10 percent sign up, they are going to affect the on-demand radio stations that exist right now. I think we’ll see a shrinkage in the number of players, while iTunes Radio grows into a significant player quite quickly."
Apple can also put big advertising dollars behind iTunes Radio, Simpson noted.
"It is obviously in their best interest to make it be as big as they can," he said. "A TV commercial might not be totally dedicated to iTunes Radio, but the service might be part of a larger Apple ad that highlights various products. And through their other products and services—they can promote the hell out of this if they want to."
Yet the big winners could be brands that purchase digital radio platforms’ audio and display ads, said Lauren Russo, svp, director audio and promotions at media buyer Horizon Media.
"Greater competition in the space will lead to better pricing and/or value," she said. "But the digital audio platforms with the best content, user experience and scale will prevail."
While iTunes Radio may reshape the digital streaming business, the Apple product is far from a no-brainer at this point, other observers say. For instance, James McQuivey, principal analyst at Forrester Research, doesn’t expect iTunes Radio to race past Pandora or Spotify to the No. 1 position.
"Remember, even on its own devices, Amazon Kindle books are the most read eBooks despite Apple’s attempt to come in a change that business," he said. "That said, music is Apple’s original customer relationship, and it does a decent job of it so the service should be at least modestly successful, if not dominant."
Source: AdWeek (by Christopher Heine)
Like many app developers, Slacker has been eagerly awaiting this, the day of the unveiling of Apple iOS 7, which brings a sharp, flat new interface to Apple’s iPhone, iPod Touch, and iPad, plus new multitasking features and other improvements and tweaks — around 200 of them, by Apple’s count.
Slacker’s overhaul for iOS 7 is more than cosmetic. The company has rebranded and reorganized its programmed stations as “My Vibe”, which provide music for certain situations, the way Songza’s “music concierge” does.
“Millions of songs and a search box isn’t a great listening experience – it’s work,” said Slacker chief product officer John Hayase. “Slacker’s team of passionate music curators has spent years creating hundreds of stations, countdowns, original programming and playlists to take the effort out of finding great music. And our new app for iOS 7 has been completely rebuilt to connect our users to the best listening experience anywhere, faster and easier than ever.”
Slacker, which launched out of stealth mode in 2007, began as a standalone device before finding a larger audience on the smartphone.
Songza, with over 4.8 million users each month, has shown that there’s a healthy demand for the sort of activity-oriented stations Slacker rolled out today as “My Vibe.”
In order to use the new version, users of the free, ad-supported Slacker or one of its many subscription options need to install iOS 7, and then grab the new Slacker app.
ARTISTS / LABELS: Distribute your music to Slacker Radio through ONErpm. Get started now!
Source: Evolver.fm (by Eliot Van Buskirk)
Today, the Bubble Wrap officially comes off of iOS 7, and with it iTunes Radio.
For consumers, iTunes Radio might feel like little more than a Pandora clone with different guts and a polished interface. For Apple, that’s all it needs to succeed.
Apple’s entry into the Internet radio space makes good business sense for the company, especially as the mere concept of selling digital music files is challenged by the rise of all-you-can-stream subscription upstarts like Spotify. Make no mistake about it: iTunes Radio isn’t about dethroning Pandora as much as it’s about getting you to buy more music.
Apple is set to launch its iTunes Radio streaming-music service in the US in September, with brands including McDonald’s, Pepsi and Nissan among its advertisers.
Announced in June at the company’s WWDC event, iTunes Radio’s exact launch date has not yet been announced by Apple, beyond promising a debut in “Fall” as part of the release of the company’s new iOS 7 software for its iPhone, iPad and iPod touch devices.
Advertising industry site AdAge claims that September will be the US launch for iTunes Radio, though, which claims McDonald’s, Pepsi, Nissan and Procter & Gamble have committed to 12-month campaigns ranging in cost from “high single-digit millions of dollars to tens of millions of dollars”.
Its report claims that these plus one or two more brands will have exclusive deals for their industries until the end of 2013, before iTunes Radio adverts are opened up more widely to brands who agree to spend at least $1m with Apple.
Ads are expected to run across iPhones, iPads, computers (within iTunes) and on televisions via the Apple TV set-top box, with listeners played one audio ad every 15 minutes and one video ad every hour, although iTunes Radio will be ad-free for people who pay for Apple’s iTunes Match cloud music service.
iTunes Radio will be US-only at launch, with not even a vague launch date confirmed for the service to roll out to the UK and other countries. “We’re starting in the US, and we’ll be adding other countries over time,” said Apple’s senior vice president of internet software and services Eddy Cue when he announced the service in June.
iTunes Radio will not be a direct competitor for streaming music services like Spotify, Deezer, Rhapsody and Rdio. It will not provide on-demand access for people to choose individual songs and albums to listen to.
Instead, it will compete directly with “personal radio” services like Pandora in the US, with listeners able to create streaming stations of music based on individual artists, songs and genres, or choose from those curated by Apple and guest artists.
Pandora is the most successful service in this space, reaching 71.2m active listeners in July 2013, and accounting for just over 7% of total US radio listening during that month, according to the company’s monthly audience metrics.
In its last full financial year, which ended on 31 January 2013, Pandora reported revenues of $427.1m (£272.3m), with advertising accounting for $375.2m of those revenues. 79% of the company’s listening happens on mobile devices, hinting at the potential for iTunes Radio, but also the threat it may pose to Pandora.
Personal radio-like features are becoming standard elements in the on-demand streaming services, though. Rdio’s recent launch of its Stations feature was just the latest example, while Spotify’s personal radio features are available for free in the US through its mobile apps, to attract people to its full, subscription-based service.
Meanwhile, another soon-to-launch digital music service, Beats Music, is making curated music playlists a key feature, fulfilling a similar role to the personalised stations on iTunes Radio, Pandora and other services.
GigaOm reports that Beats Music – an offshoot of headphones brand Beats – is getting artists and freelance music writers to create “thousands of playlists” lasting up to 70 minutes ready for its launch later in the year.
The closest direct equivalent to iTunes Radio in terms of features, however, is the Nokia Music app that is preloaded on that company’s Windows Phone smartphones. That service is ad-free, however, with the business model a combination of helping to sell more handsets, and persuading some users to upgrade to the subscription-based Nokia Music+ version.
Source: The Guardian (by Stuart Dredge)
Mainstream music fans don’t want to constantly choose what to listen to, so streaming services are embracing radio. The latest is Rdio, whose new Friend FM turns your friends’ listening activity and social connections into non-stop streams. It’s also added a traditional Pandora-style You FM station thanks to data from The Echo Nest. Together they could let you productively leave Rdio on in the background.
While Pandora popularized adaptive online radio, it’s becoming an essential feature for all music services. Spotify added radio at the end of 2011, and Apple is gearing up to launch iTunes Radio alongside iOS 7 this fall.
The fact is that people listen to music in different ways. Sometimes you want to hear that one particular song or album, sometimes you want to dabble and discover something new, and sometimes you want to just fire-and-forget a radio station while you work. The more use cases a music service can cover, the more likely people will stick with it, endure ads, or pay for a subscription.
Usually, adaptive radio stations build themselves off of your listening habits. That includes what you played, thumbs up or downed, and saved. This is how Rdio’s new You FM works, though it also factors in your Facebook Likes and Twitter Follows.
Rdio’s overhaul of Stations also lets your tune into any of yours friends’ You FM stations. Friend FM could get you out of your comfort zone and stumbling upon new artists you can then cue up on-demand. Maria FM could score me some new yoga music, while Alex FM would rock my bones with the latest new metal. Rdio says “It’s like flipping on the car radio and knowing every DJ.”
The cross-platform streaming service has also built a more immersive player for Stations, a better navigation system, Stations for genres, and an Auto-Play radio based on the last song or artist you were last listening to.
Rdio has some catching up to do. It doesn’t reveal its user counts but some peg it as much, much tinier than direct competitor Spotify which has 24 million active users, over 6 million paying subscribers, and brought in $533 million in revenue in 2012. While many say Rdio’s design is better, its marketing hasn’t been as aggressive and it fractured its attention to launch the video streaming service Vdio.
Rdio needs to lock in more casual listeners before iTunes Radio comes out or Spotify gets any bigger, otherwise it could be stuck with its stylish but small user base. You can’t make a business just selling to hipsters unless you’re Pabst Blue Ribbon.
Source: TechCrunch (by Josh Constine)
Apple is working on a new kind of “audio hyperlink” technology that would use audible or inaudible signals embedded in a music or other audio track to link out to other media, or to perform some function on the device when encountered. This would allow for devices like iPhones to perform a number of different functions upon encountering said hyperlinks, just like a user would when browsing the Internet and finding traditional ones.
Here’s a practical example: A podcast could embed said audio hyperlink, and then pause playback of the primary track when one hits, in order to either call back a specific segment from earlier in the podcast itself, or to open a second audio stream stored on the web and play that back, or even to open another app or call up a video or other website from the web. It could even be used to call up another application and activate a purchase activity, embedding e-commerce opportunities into audio, which would be perfect for deriving affiliate revenue from podcasts or for directing iTunes Radio users to app and music purchase opportunities.
Currently, Apple’s “enhanced podcast” format can do some of this, but it still requires that metadata be added and that the file be recorded in AAC format. This would put the relevant links directly into the audio stream itself, which would make it much more portable. The audio hyperlink can also be tied to some kind of input trigger, so that uses would have to tap their device, use voice input or otherwise activate a link before it actually works.
The invention has the potential to make audio files into something truly interactive, and better-suited to the multimedia-rich mobile platforms that exist today. Its obvious benefits would be for audio podcasts, but the tech could also be applied to things like music, video and even ringtones or other notifications.
This is one of those media format technologies that, even were it introduced tomorrow, would take quite a while to gain wide adoption, and might face challenges become very popular unless it were made into an industry standard. But it’s also an exciting invention that could change the way we interact with our computing devices at a fundamental level, so it’s definitely an area worth watching for future developments.
Source: TechCrunch (by Darrell Etherington)
Do you ever wonder what portable MP3 player was the first to come into the market? Many think it was Apple’s innovative, iPod; however, you would be sorely mistaken if you believe this to be true.
The MPMan music player, manufactured by the South Korean company SaeHan Information Systems, debuted in Asia in March 1998, and was one of the first mass-produced portable solid state digital audio players.
The internal flash memory could be expanded, but there was no support for external memory. It was delivered with a docking station. To put music into the device, the music first had to be encoded in the mp3 format by an encoder provided by the user, and then transferred via the parallel port to the docking station that connected to the portable player device.
On May 2, 1998 in Japan, the Akihabara ”Akiba ~ us” stores in Chūō, Tokyo started selling 32 MB and 64 MB models, the prices of which were 39 800 yen (ca 400 USD) and 59 800 yen, respectively.
In North America, the South Korean device was first imported for sale by Michael Robertson’s Z Company in mid-1998. Around the same time, Eiger Labs, Inc. imported and rebranded the player in two models, the Eiger MPMan F10, and Eiger MPMan F20.
The Eiger MPMan F10 was a very basic unit and wasn’t user expandable, though owners could upgrade the memory from 32 MB to 64 MBby sending the player back to Eiger Labs with a cheque for 69 + 7.95 USD shipping. Measuring at 90 mm tall by 70 mm wide by 16.5 mmthick and weighing a little over 65 gram, it was very compact. The US price in 1998 for the F10 model with 32 MB flash memory was circa200 - 250 USD.
The Eiger MPMan F20 was a similar model that used 3.3 V SmartMedia cards for expansion, and ran on a single AA battery, instead of rechargeable NiMH batteries.
The MPMan was not well received by critics and consumers. The Rio PMP300, which was released soon afterward, was received better.
The RIAA’s Associate Director of Anti-Copyright infringement initially said the MPMan had “no function other than playing material that was stolen from record companies”. He later said it was “a unique device. It’s something that we haven’t seen on the market before”.
As Apple prepares to launch iTunes Radio alongside iOS 7, new figures from Nielsen indicate that the music streaming industry has taken off, with more than 50 billion songs streamed in the first half of this year.
Friday saw the release of Nielsen SoundScan's newest figures, which show a growing interest among consumers in streaming services like Spotify and Apple's forthcoming iTunes Radio. For the first half of 2013, stream volume was up 24 percent over the same period last year.
"Streaming continues to be a tremendous growth story," said Nielsen’s David Bakula. "with over 50 billion audio and video streams in the first six months of 2013."
This considerable growth in streaming service use comes even before Apple has properly stepped into the fray with its recently announced iTunes Radio service. That service — accessible by Mac, PC, Apple TV, and iOS devices — will see Apple offering personalized radio stations built off of users’ listening habits. It will come in both ad-supported and ad-free models.
A presence in the growing music streaming industry could give Apple even more sway in the music industry. By some estimates, iTunes accounts for 63 percent of all digital music sales, while other estimates put that figure as high as 75 percent.
iTunes Radio will join a crowded field, though it will have some advantages due to it being preinstalled on every device running iOS 7. Aside from Apple’s offering, music consumers can also stream from Pandora, Spotify, another streaming option from Google Music, Microsoft’s Xbox Music service, and many other options.
Apple’s entry into the Internet radio business was almost held up by resistance from assorted music industry players. Those players — wary of giving Apple more power, and also eying the company’s considerable cash holdings — wanted sizable concessions from Apple with regard to licensing fees and royalties on their content. Apple eventually yielded on some issues and closed deals with the major players ahead of the service’s announcement at the annual Worldwide Developer Conference.
Beyond the implications for the streaming segment, Nielsen’s report showed that music sales were slightly down year-over-year. Overall, album and track equivalent sales were down 4.6 versus the same period in 2012. That was due in part to a continuing decline in the largest physical media segment, the compact disc, which was down 14.2 percent year-over-year.
Digital track sales were down 2.3 percent, but digital album sales were actually up 6.3 percent. Nielsen found that digital albums now make up 43 percent of all album sales, up from 38 percent last year.
Vinyl LP sales were also up considerably over last year, with Nielsen measuring them at 33.5 percent higher than in 2012.
Source: Apple Insider (by Kevin Bostic)
Apple is offering indies a firm, non-negotiable royalty rate of $0.0013 per stream on iTunes Radio, according to contract details confirmed shared with Digital Music News. That corroborates information disclosed by a separate source earlier this month (and published by Digital Music News); though the latest information now comes in writing, on an actual contract.
Apple is also offering shares of advertising revenue and an increase after the initial year. Here’s the more detailed breakdown of the rates that Apple is offering.
Keep in mind, this is just the (non-negotiable) form contract being sent to indies (and non-major artists). Major labels have been granted entirely different terms, based on earlier negotiations.
Source: Digital Music News (by Paul Resnikoff)