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work blog, play blog
I’ve been playing around with Tumblr. While I’m no doubt a bit late to the whole tumblelog concept, I’m definitely liking the casual-ness of it. No need to formal titles, ready ability to add different content types, and useful integration of feeds from other social apps (del.icio.us, twitter and, in fact, wordpress). It also looks nice. And is based in NYC.
Accordingly, I’m going to increasingly shift the focus of Sampled + Sorted to work (already have to large extent) and a new venture (called 8tracks) that will launch in limited beta next month. Meanwhile, I’m going to use my new tumblr page to aggregate my social app feeds, post music and photos, and do anything else that’s more on the personal tip.
WordPress for work, Tumblr for play.
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A research report from AccuStream, published yesterday, found that total listening hours (“TLH”) for the internet radio sector in 2007 were 4,850,000,000 — a 26% increase over 2006. And I suspect this is only for the US so would exclude, for instance, a large part of the listening on Last.fm.
Internet radio revenues, however, were estimated at a mere $92,000,000 — not so impressive. A quick bit of math is revealing: $92m/4.85bn = $0.0190 per hour. That is to say, revenue/hour was just shy of 2 cents. Unfortunately, the rate for digital sound recording performance royalties (the thing I wrote about a lot last year) is $0.0011 per performance (per track, per listener). Based on an average of 14 tracks/hour, this equates to an hourly cost of $0.0154. In other words, the sound recording royalty by itself consumes 78% of advertising revenues.
Assuming these figures are accurate, the internet radio sector is paying the labels a 78% share of their revenues. By contrast, traditional (aka terrestrial) radio pays 0% of their revenues — nothing — to the labels. And satellite radio pays 6-8% of its revenues to the labels.
For internet radio services, the remaining 22% of their revenues must be divvied up between the musical composition royalty (probably 4-5%), bandwidth, employees (which is typically the most expensive component of cost), overhead, and, well, profit. Or not. The math doesn’t work.
Now, admittedly, there are a couple of problems with the above analysis. First, this study seems to cover the US only and the internet is, by definition, global, so both TLH and revenues are far too low. Second, oddly, AccuStream makes no mention of normal visual ad revenues (banners and the like, not video), which is a significant source of ad revenues.
One other point that’s worth noting: the average price (CPM) of ads placed in/around internet radio is clearly lower than it is for terrestrial radio, in the same way that the price for ads on the internet (in general) is still considerably lower than it is for ads placed in traditional media. This will change over time, but it’s too bad that many internet radio services won’t live to see this day, should current rates stand.
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imeem tops Project Playlist
Just a quick note: from the graphs below — see my post from Dec 14th on the top 20 music 2.0 sites, including graphs that automatically update thanks to compete.com — it looks like imeem has begun its upward trajectory again and, coupled with another decline at PP, is now in the #1 position.
Other big trajectories: MOG is now approaching the size of Live365, Qloud has jumped significantly (now at nearly 225k uniques/month), and SoundFlavor (which features a PP or Seeqpod-like streaming MP3 search engine) has seen two solid months.
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Last.fm goes on-demand
As many of you know, I’m a big fan of Last.fm — it’ll be 2 years ago tomorrow since I first posted about it, and if I weren’t focussed on my own venture, there’s no place I’d rather be working. So yesterday’s announcement is definitely interesting: users of Last.fm can stream any track up to 3 times gratis, and thereafter they can either (now) buy the download or (soon) subscribe to a Rhapsody/Napster style service to continue to stream on demand.
I think the positioning of the announcement was a bit unclear, however. This is NOT a free, on-demand service like imeem or lala; rather, this will ultimately be a subscription-based, on-demand service with a free “sampling” component very much like what Napster offered a couple of years ago. In fact, Napster’s offer was (is?) actually for 5 (rather than 3) free listens before you had to buy or subscribe, and I blogged the underlying math at the time. Quincy Smith said they wanted to offer more free listening, but it remains to be seen whether the Majors will be willing to grant a much higher threshold.
Fred Wilson also suggests the price for Last.fm’s subscription will be $3, but I’m pretty sure this is just the pricing on their current premium (ad-free, personalized) radio sub service, and I seem to recall having read that the on-demand subscription will be higher. I think it’s unlikely the labels would grant Last.fm a less expensive arrangement than what Real, Yahoo and Napster get, except as part of a comprehensive deal, including upfronts (which could be the case, we’ll see).
The reasons I see a Last.fm subscription potentially faring better than Rhapsody/Napster/YMU are (1) the on-demand functionality is layered on top of a free service that is already highly successful, with a large base of users (20m registered users), and (2) the service has a core social dimension which was lacking in previous efforts.
I like Felix, Martin, Spencer and the rest of their crew and applaud their efforts to make this model work.
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I hadn’t updated my ranking of ‘music 2.0′ sites in 4 months (though the graphs themselves automatically update when embedded here) so thought it’d be useful to review. Here’s the results for November, per Compete.
- PP and imeem continue to lead the pack (see first graph below, #1-5) although have dropped considerably since last summer (not clear why unless perhaps an adverse impact from Facebook attention). iLike overtook Pandora and Last.fm on the strength of its FB application, and these totals exclude the usage on FB itself. (OTOH, these totals also exclude Last.fm’s international usage, as I understand it, which likely represents a significant portion of their user base.)
- Live365 (my old employer) continues to generate usage in the 500k range, while traffic at Pure Volume continues to decline. Most impressive in the second set (#6-10) is Garageband’s jump – which I’m guessing is attributable to traffic being directed from links on iLike or the iLike FB application (since both are owned by the Partovis) – and MOG’s steady progress. I reckon MOG will see a further boost over the next month or 2 as has just rolled out a site re-design. Traffic at Dizzler, an MP3 search engine similar to PP, has fallen substantially.
- The big newcomer in the #11-15 range is Qloud, which launched in the summer and also features the #2 FB app for music (called “My Music”). The Hype Machine’s new site looks to have supported growth, while both Finetune and radio.blog.club have dropped off in traffic since July.
- In the last set (#15-20), Seeqpod, another PP-like service but with a savvy media crawling engine built at Berkeley, and MyStrands have seen a bit of growth. Anywhere.fm launched in the summer and has been up and down. Lala looks to be at about the same level of traffic as in January.
As always, lemme know if I’m missing any key services and I’ll include them next time.
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Could Beacon be the new AdWords?
I read FB’s announcement yesterday and thought it was mildly interesting: getting companies to create their own profiles on FB and then allowing them to place “Social Ads” next to feed entries that (organically) relate to a company’s product or service. Nice ideas but (1) the company-with-profile isn’t really a new concept, and (2) the prevalence of feeds that happen to relate to a given advertiser’s offering seems dubious.
However, I read further detail this morning (from WSJ via paidContent):
Marketers will be able to infuse their ad messages into the activity of Facebook users. For example, a Facebook user who buys a movie ticket, makes travel plans or writes an online restaurant review on a participating Web site will receive a message asking if they want to share their action with their Facebook “friends.” (If the answer is yes, their friends will see the action and an ad like it or not.)
The code that a “participating Web site” can embed is called Beacon. It thus allows FB to capture various data points of preference outside facebook.com. If Zuckerberg & Co. can attract significant participation, this has the potential to be huge and, in my opinion, game-changing. People are often (not always) proud of certain purchase and consumption decisions. So while this may not work for dish soap (or maybe it could, e.g Method anyone?) it would seem a very nice fit for those sorts of products and services that people use to define themselves:
- media (film, TV, music, books, magazines)
- clothing
- cars
- furniture
- restaurants and bars (I def would expect a partnership with Yelp)
And so forth. I’m really interested to see how this pans out. But, at first blush, I think this could be big.
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Just caught this on Digital Media Wire:
Project Playlist Raises $3 Million for Social Music Sharing
Submitted by Mark Hefflinger on September 26, 2007 – 7:31am.
Beverly Hills, Calif. - Project Playlist, a service that lets users share music playlists on blogs and social network profiles, has raised $3 million in its first round of funding, PEHub.com reported, citing a regulatory filing. No investor information was disclosed.
Beverly Hills, Calif.-based Project Playlist’s technology allows users to add their music playlists to blogs and profiles on social networks including MySpace, Facebook, Friendster and Gaia Online.
As regular readers of S+S will recognize, Project Playlist has emerged over the last 18 months or so to become arguably the largest music 2.0 web service. I think PP is compelling to consumers for 3 reasons:
- It’s an easy way to tune into artists/songs you already like, or would like to hear. If I read about a new band, or hear about a band from a friend, there’s a reasonable chance I can search for that band on PP and find at least a few tracks to check out, which are readily (albeit illegally) available for on-demand streaming.
- It’s relatively trivial to download any track that shows up in search results, eliminating the need for purchase.
- I can use the “+” button to add searched-for tracks to a playlist, which I can then attach to my personal webpage (e.g. MySpace) to share my tastes with others in a meaningful way (i.e. other people can actually hear the full tracks).
On the other hand, PP suffers from a few shortcomings in UE:
- Tracks that show up in search results may not always be available, or may disappear at some point in the future (this is because all tracks are hosted in various places on the internet, similar to recently-shuttered Webjay).
- Certain artists or tracks may not be available at all, if PP’s MP3 crawler hasn’t located them somewhere on internet (Berkeley-based Seeqpod, a similar service, counts improved crawling as its differentiator).
From an investor’s standpoint, PP is interesting because:
- Aforementioned growth. On the back of its popularity as a MySpace widget, PP has emerged from nowhere and is now, in less than 2 years, 3X-4X the size of Last.fm and Pandora.
- Little or no marginal costs. Because the MP3s streamed or downloaded through PP are not centrally hosted, it does not have to incur the big bandwidth bills of other streaming audio providers. Further, as far as I’m aware, it doesn’t pay any music royalties (which, other than salaries, is by *far* the largest component of cost for any digital music service).
Conversely, I suspect some investors may have passed on PP because:
- There’s little question that PP, as currently configured and sans direct licensing, will get sued.
- Migrating the existing distributed service to a legitimate platform seems, on the surface, challenging.
But then again, I just heard that imeem signed up another Major (SonyBMG) for a direct license, and its talks with EMI are ongoing. So perhaps there is hope for a licensed version of Project Playlist down the road.
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Less is more
I recently added that quote to my Facebook profile. Though I’ve seen it attributed to a 19th century poet named Robert Browning, it is most commonly (and relevantly) attributed to 20th century architect Ludwig Mies van der Rohe.
Over the years, I’ve increasingly become a fan of minimalism — in music, design and my general approach to buying and owning stuff. I’ve found myself wanting to possess less, in part because I’ve moved frequently over the last 18 years, in part because I don’t like clutter, and in part because the things on which I spend time and money are often experiences (travel, dining) or can be converted to bits and thus stored on a hard drive (music, film).
Paul Graham of Y Combinator wrote a nice essay on “stuff” last month. I really like his notion of examining purchases for utility (in the John Stuart Mill sense) and the socioeconomic comparison of excessive ownership with excessive diet.
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That was a quick month – I’ve not been blogging much as just moved (from SF to NYC). The top 20 sites for July are below. Highlights:
- First down month for Project Playlist (summer vacation, I’d guess)
- Pandora jumped 37%, now ahead of Last.fm — but both still trail iLike
- Also grew by > 1/3: Seeqpod, Haystack, Virb, The Hype Machine, MOG
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There’s some interesting changes this time round:
– As expected, Project Playlist is now just shy of 8m users
– iLike is now ahead of Last.fm (1.6m to 1.4m) per Compete, clearly attributable to Facebook
It’s late so I’ll refrain from further comment but here’s the charts:
For some reason, next charts won’t work. Will try again next time. Update: Ok, I was able to add #6 through 10.
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feed
favorite artists
twitter- davidporter: @ericporcher I think that's the big problem with these on-demand subscription services in general. If I pay for MUSIC, I want to own it.
- davidporter: @ericporcher Got it - so the big listener-side proposition for a subscription offering would be unlimited (or more) skipping.
- davidporter: RT @hnshah -- The 50 Best Movies of 2009 http://bit.ly/6oK1OF
