Scott Keeney (DJ Skee) | Vox

Amazon’s moves could start a price war among music streaming services

2016-10-28T14:48:45-04:00

After months of rumors, Amazon finally announced the details of its new music streaming service, which joins an already crowded market. While the price for the standalone music service is $10 per month, in line with all the other services, there are two other offers that set it apart. For Prime subscribers, the price is an additional $8 per month, on top of existing yearly fees, and for users who own an Amazon Echo, the price drops even further, to $4 per month. That’s right: Music is back as a loss leader.

The precedent for this goes all the way back to the physical era, when record stores offered deep discounts on new or popular albums in order to draw customers into shops, and then upsell them on buying other albums. The stores figured they would make up the difference with increased profits from increased traffic, and for many years, this worked like a charm. It was only when the CD era started to die off that things took a turn for the worse, and big-box stores started getting into price wars that smaller players couldn’t afford.

Back then, the new album as a loss leader was a catalyst for sales of other music or unrelated goods — if you came to Target to buy a CD, for example, you might pick up some laundry detergent while you were there, as well. But with the launch of the iPod, music became a loss leader for a device that was specifically tied to that music. Sure, there were other MP3 players in the market, and it was possible to listen to music from other sources on an iPod, but many mainstream consumers chose the path of least resistance and stocked up at the iTunes store. Ninety-nine cent downloads were never the endgame for Apple — the device that cost several hundred dollars was always what they wanted to sell, and music was just a means to an end.

The big question for Amazon is whether the promise of deeply discounted streaming can move the needle enough to get Echo consumers to subscribe for one device only.

The big question for Amazon is whether the promise of deeply discounted streaming can move the needle enough to get Echo consumers to subscribe for one device only. In terms of devices, the iPod had very few mainstream competitors, but the Echo competes with Google Home, Apple’s upcoming Siri speaker, Sonos and other speakers as well as people simply choosing to look things up rather than saying them aloud. And the iPod was primarily a music device, whereas the Echo can be used for multiple purposes, so the tie to music feels less direct here. My two cents is that Echo devices will work best for the consumer looking for the “lean-back” listening experience, like the experience radio delivers. Asking Alexa to play a certain station requires a lot less work for the user than deciding what song, on what album, by what artist they’re interested in hearing.

That being said, there may be an audience of Echo users who could be convinced that a few bucks a month is a great deal for the ability to say, “Alexa, play this song.” But it’s harder to see people being swayed by a cheaper streaming service when it comes to the Echo acquiring new users if they weren’t already interested — especially for one device only. (Also, these devices, in my opinion, are best suited for a lean-back listening scenario in general — like radio.)

The question of whether this will lead to a price war among streaming services is an interesting one to consider, but Amazon might be the only company that can pull this off. Unless Spotify or Apple Music deeply integrate with a piece of hardware, it doesn’t make sense for them to spend so much up front, especially when paths of profitability for streaming services are rocky at best. What Amazon is doing here isn’t new, and it will be interesting to see if the trend of music as a loss leader is one that was worth bringing back.

Scott Keeney, a.k.a. DJ Skee, is a renowned radio DJ, host of Skee TV and founder of the groundbreaking Dash Radio, a curator-led digital broadcast platform that merges the best of terrestrial and internet radio. DJ Skee has generated more than one billion media impressions in under a decade, and has more than 500,000 social network followers. Reach him @djskee.

This article originally appeared on Recode.net.

Even With a Universal Deal, Does SoundCloud Have a Future?

2019-03-06T05:18:47-05:00

The fact that SoundCloud has secured a licensing deal with Universal certainly seems like a great step forward for the streaming music service as it goes mainstream. With today’s announcement, SoundCloud has got two of the three major record labels on board (Sony is the only holdout), as well as several indies, and there’s talk of a paid streaming service launching later this year.

SoundCloud’s financial situation seems precarious — while news of a debt-funding round reported yesterday is somewhat dated, as the round was actually raised in May of 2015 — many of the company’s original investors haven’t added new funds in a few years. The Universal deal terms were not disclosed, but one can only imagine that a catalog of its size and influence didn’t come cheap — and no one would be surprised if Sony held out for even more.

SoundCloud has replaced the mixtape — a great venue for showcasing new content and taking risks. Whether or not people want to pay to hear those experiments is another question.

But even if the Sony deals wraps quickly and a paid streaming service launches soon, can SoundCloud pivot from being this generation’s equivalent of the mixtape — a gray area, legally, fueled directly by artists putting out music on a whim and giving it to fans — to something more corporate and mainstream? The paid streaming space is already crowded, with major players like Spotify and Apple Music in the lead — and even they have failed to capture the vast majority of the listening public, largely due to price. I would advise SoundCloud not to enter into this area the same way, as it isn’t its core business.

Soundcloud certainly has an audience, with the New York Times reporting that it has 175 million users per month. In the dance and hip-hop communities, it is seen as the place to discover new music and showcase remixes and edits, with strong communities popping up around artists and DJs. But how many of those users will actually convert when the service starts charging? Again, SoundCloud has replaced the mixtape — a great venue for showcasing new content and taking risks. Whether or not people want to pay to hear those experiments is another question.

There’s also the question of how much control the majors will have over the site’s content. There was backlash when remixes of major label tracks were pulled, and although the labels were technically in the right, fans weren’t happy. Part of this has to do with a lack of education about who owns what when it comes to music and that even someone else’s remix of a Katy Perry song is still technically a Katy Perry song. Users loved the variety of remixes, but if labels limit who can mix which tracks, it might well spark conflict. This point is personal for me — one of my big breaks was producing a remix of “300 Bars” by Game, but if his label had been able to control and clear it, the mix would never have gone public.

One of SoundCloud’s killer features has been becoming the platform for artists to test the market and put out something just recorded that day, often before publishing splits and production fees have been handled, or the label even knows about a song. Will this area vanish? And if SoundCloud becomes a subscription service, will the others cry foul if SoundCloud has this early access to exclusive music?

One of SoundCloud’s killer features has been becoming the platform for artists to test the market and put out something just recorded that day. Will this area vanish?

Because details of the paid service haven’t been released, there is a fear that smaller artists, who essentially helped build SoundCloud back in the day, might miss out on the windfall. Part of what made the site special was that it was easier, compared to other outlets, to find emerging artists — but if major label content has to be put front and center, that differentiating factor disappears. There’s also nothing to stop Spotify and Apple Music from opening up their platforms to the same type of content SoundCloud allows, something that could further erode their market.

Very few people want SoundCloud to go away — it still serves as a valuable resource and place of discovery for underground and developing-market artist communities. But it seems to have backed itself into a corner with label deals — and by trying to go legit, might have alienated its base. It’s sometimes tough to scale a business based on authenticity and credibility. Let’s hope SoundCloud’s rapid success and growth into the mainstream doesn’t doom it.

Scott Keeney, a.k.a. DJ Skee, is a renowned radio DJ, host of Skee TV and founder of the groundbreaking Dash Radio, a curator-led digital broadcast platform that merges the best of terrestrial and Internet radio. DJ Skee has generated more than one billion media impressions in under a decade, and has more than 500,000 social network followers. Reach him @djskee.

This article originally appeared on Recode.net.

The Copyright Royalty Board’s Ruling Is a Win for Everyone

2019-03-06T05:39:23-05:00

Although the vast majority of them don’t know it, a fairly obscure government panel just made life better for music fans. The Copyright Royalty Board, which sets the rates that non-interactive online streaming companies must pay, just released a new set of rates for the next four years — and they represent the best sort of compromise between labels and broadcasters. For live radio broadcasters, the rates will actually come down a bit, which will help them to be more financially viable and make investments in talent and growth.

Before the ruling, the rate for nonsubscription broadcast transmissions was 23 cents. Starting next year, the rate for these transmissions will drop to 17 cents. This might sound like a small change, but it adds up over time, especially when you have real radio stations that employ DJs and other talent — not just an algorithm that plays songs.

The playing field is now much more even, and this will hopefully encourage even more innovation in online radio.

The ruling also closes a loophole that some larger services like Pandora, which offer the ability to skip tracks, were able to exploit, and increases their rate. The playing field is now much more even, and this will hopefully encourage even more innovation in online radio. It’s a hard space to be in, because there was always so much confusion and uncertainty about the costs, but now the rates have been set for the next four years, more content will be able to survive.

One of the biggest complaints about these pure-play “radio” services is they actually take business away from subscription services. For example, if you are able to create your own station based on an artist you like, and fast-forward until you hear your favorite song, there isn’t the need to pay Spotify $9.99 per month for the average consumer. Broadcast radio is the opposite, in fact only enhancing streams for new artists’ subscription services.

For a century, live radio has been the No. 1 tool to promote music. It never replaces the need to purchase or subscribe like a pure-play service could, since you have a finite amount of stations, and can’t fast forward or skip the songs. Live broadcasters were unfairly punished before this ruling, while pure=play services actually paid less because of confusion on what radio really was.

It’s pretty well accepted at this point that the future of music consumption is online, and virtually unlimited bandwidth should allow for many innovators to create stations.

For artists, this represents a win, as well. The rise in the rate for nonsubscription services should help to make up any shortfall, and it will encourage more players to enter the space — and that means more opportunities for music to be heard. And if you think these rates sound low, remember that performing artists aren’t paid anything when their songs are played on terrestrial radio.

It’s pretty well accepted at this point that the future of music consumption is online, and virtually unlimited bandwidth should allow for many innovators to create stations. Old radio was limited by how many spots there were on the dial, but now, anyone who loves a niche and has a great music collection can jump in and create something amazing for people to hear. This has led to far more opportunities for artists to be discovered, and people to connect around the world.

Today’s rate announcement was a victory for people who love to listen, and the talented DJs who help bring them great new music. Radio lives on, and will become stronger than ever, and help fuel the music business to new heights.

Scott Keeney, a.k.a. DJ Skee, is a renowned radio DJ, host of Skee TV, and founder of the groundbreaking Dash Radio, a curator-led digital broadcast platform that merges the best of terrestrial and Internet radio. DJ Skee has generated more than one billion media impressions in under a decade, and has more than 500,000 social network followers. Reach him @djskee.

This article originally appeared on Recode.net.

Is Pandora’s Rdio Purchase Good for Listeners and Artists?

2019-03-06T05:44:27-05:00

Yesterday, word came down that, based on a few conditions, online radio platform Pandora would buy streaming music site Rdio.

If Pandora simply builds Rdio’s on-demand functionality into its platform, the market will now have three very similar services — Pandora, which would provide a data driven playlist “radio” service as well as on-demand listening; Apple Music, which has a curated Beats 1 radio channel, as well as on-demand; and Spotify, which has started rolling out a few curated shows and also generates playlists based on artists. YouTube Music, which launched last week, also offers users a chance to pick an artist and then decide what type of listening experience they want from there.

Everyone seems to be moving toward trying to do it all — but is that what users really want? And is it good for artists, especially those who don’t have big budgets or major label backing? Personally, I’m scared of a world where one company is the record label, distributor, radio station, and record store all in one.

We’ve seen a number of studies that show people value experiences and connections above almost anything else. They want to feel like they are discovering a great track along with a DJ and all the other listeners — there’s a moment of excitement and community that goes along with hearing a world premiere or a great artist interview at the same time as others all over the world. It’s really fun to watch social media when a big track makes its debut, because you can see how truly connected we all are — people are tweeting live from every corner of the globe, all talking about how excited they are to listen to something. That’s the type of community great DJs can facilitate. And it makes the discovery process frictionless for those listeners who don’t have hours to scrape SoundCloud for what’s next.

If everyone is just listening on their own to something a machine has selected for them, it makes it a little less fun, and new artists won’t be discovered until they hit some level of success or major labels put their push behind. We spend so much time with our headphones slapped on our ears listening alone as we jog or commute or run errands — there’s something to be said for at least connecting with the DJ, even if you don’t connect with anyone else.

For artists, a great DJ can open doors and allow great moments of serendipity to happen. I know of a guy whose track was played on a local independent radio station that happened to have a great app, and on the other side of the country, an editor at a major music outlet just happened to tune in. She heard a track about the rapper’s car and it reminded her of her brother, and after a few emails, he had a big story in a major magazine and was playing at one of their showcases.

When everything is just based on data, those moments can be lost. One of the best things about the new online radio stations is that they mix everything up — you can hear multiple genres and types of artists in the same hour. When things are based just one genre, you tend to get stuck, and smaller, often independent artists have a harder time breaking through.

Hopefully, the Pandora/Rdio deal will turn out to benefit artists and at least give them another outlet to make money and find fans. But as all these services regress to the mean and trying to control the entire listener experience front to back, it’s worth asking who really wins.

This article originally appeared on Recode.net.