Music Business

As on-demand streaming loses its novelty, music needs personality

mic[UPDATED] With the exception of the occasional flashy exclusive, its harder for the average streaming music users to tell the services apart.  So, to combat user fatigue and spur growth, Slacker Radio has added both curation and personality; and CEO  Duncan Orrell-Jones makes a strong case that most users want more than just continuous music.

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Guest post by Duncan Orrell-Jones, CEO, Slacker Radio

SlackerThere was a time when providing consumers with access to on-demand music was a game-changing proposition. But times have changed. Consumers now expect more, and access alone is no longer enough. Music remains the life force of our business but, increasingly, it’s what you do with it that sets you apart and ultimately dictates success.

Consider the evolution of Spotify, for example. In 2008, they burst into the music streaming industry and had an immediate impact because of its unprecedented on-demand capabilities. But now that the irresistible convenience of on-demand listening is standard among streaming services, Spotify is pursuing other initiatives to differentiate itself. In January the service introduced Behind the Lyrics, a series of playlists curated with lyrical excerpts, fun facts, annotations and stories straight from the artists and the Genius database. Spotify has also purchased startups Cord Project and Soundwave and integrated with Facebook messenger to encourage the sharing of music, information and voice messages. Most recently, Spotify announced that it will create 12 original video shows to further expand its content catalogue.

"An increasing amount of listeners prefer a lean-back experience that offers entertainment without the hassle of maintaining playlists or self-selecting songs."

The message here is clear: giving consumers access to on-demand music will certainly continue to appease the listeners who seek a controlled, hands-on experience. However, an increasing amount of listeners prefer a lean-back experience that offers entertainment without the hassle of maintaining playlists or self-selecting songs – much like radio.

A Nielsen report from August 2015 revealed that radio has never been bigger in the US; 245 million Americans, or 91% of people age 12 or older, reported using radio on a weekly basis. Radio’s ongoing success is proof that people appreciate being able to lean back and listen to music that is accompanied by personality and perspective. This is the kind of content that will serve as entertainment even after listeners’ music preferences change. It’s the kind of content that adds meaning to the music, by creating human connections and facilitating a sharing of information. As the streaming competition has intensified, we have unsurprisingly witnessed an industry-wide increase in this enriched content.

Since day one, we at Slacker have recognized the value of music that’s complemented by personality and storytelling. Our users have demonstrated a preference for hosted radio stations and shows, so we focus on creating this type of content. Our curated stations and shows encourage artists, music experts and super-fans to share stories and commentary that present unique insights and reveal background information.

Other services have also weaved an exchange of voices into their content, via initiatives like audio messaging and listener network social curation. Through these forms of information-rich content, services are striving to add meaning to the music the way Chris Hardwick’s “Talking Saul” adds depth to fans’ enjoyment of “Better Call Saul.”

Catalog Isn't Everything

Rather than focusing on unique content, some services are investing in providing the best music catalogue by chasing the most songs or the most exclusives. While  catalogue size and music exclusives are valuable aspects to consumers, they are far from key differentiators. For example, Pandora is a major industry player despite having a relatively minuscule one million song catalogue.

"Pandora is a major industry player despite having a relatively minuscule one million song catalogue."

Having the largest catalogue of music in itself won’t determine how valuable a service is since most can obtain the standard mainstream catalogue that the average listener seeks. Two-thirds of all music, including most of the mainstream music, can be acquired through licensing deals with the triopoly of record labels, Universal Music Group, Sony Music Entertainment and Warner Music Group. Negotiating contracts with these three record labels may be a costly and ongoing endeavor, but the consolidated ownership makes the core catalogue attainable for many services.

Music services, such as Tidal, have looked to enhance their catalogue by securing exclusives, but the value of this strategy dwindles over time as the novelty of each exclusive wears off. A Rihanna album here and a Kanye West album there might earn the temporary allegiance of some listeners, but that isn’t going to crown the ultimate streaming service champions.

Plus, there are many different services that now offer Kanye’s album. For this reason, in our view, unique storytelling becomes pivotal in the all-important rush to differentiate a streaming service in an increasingly crowded field. Several parties can offer mere access to great music, but real enhancement comes with stories that delight and surprise consumers—such as an anecdote shared by a living Country music legend who got the best of Kanye while receiving a Grammy Award from one of the Beatles (this really happened, and you can hear the story here).

The power of music will always draw consumers in, but storytelling will keep them coming back for more.

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3 Comments

  1. This is an interesting thesis, Bruce. Here’s my personal story to back it up. I have created a show called “Songs-Voices-Poems” on KRFY 88.5, a community station out of Sandpoint/Ponderay in North Idaho. Our potential range is about 20,000 people but the live show is also streamed on the Internet each Sunday at 7pm pacific. Each week I spend 15 to 20 hours curating music and related poetry under a new theme of either form or content. The feedback is that it is a unique experience akin to the much beloved Lake Wobegon. I try to make it both thoughtful and provocative and stretch into the past and present for material. The music “industry” is trying so hard to create commercially viable hits to support infrastructure that it cannot afford to create niche audiences. But, I believe that people are hungry for content that speaks to the more personal, family and local geographic interests and tastes. The revenue stream for what I do is nill at this point, but for now that’s ok. To use a metaphor, the soil needs some enrichment and beauty and curiosity are good nutrients.

  2. The article is a bit messy and switching the topics multiple times, but overall it expresses valid points. I would like to support Jackie’s comment as I personally share the same feelings. The listener experience is far from perfect on such platforms as Pandora, Spotify, Apple/Google, etc., and to a certain extent it’s because it’s very hard to discover new music you would potentially enjoy. They are all about chasing the most popular content from the “big three” (focusing too much on that, I believe), but no one seems to care about the actual music discovery and niche audiences who might want to get something new and custom. The commercial/popular content is available everywhere these days (so it doesn’t even matter which online service to use now), but it’s just a small piece of the music space and it’s still not that easy to discover the rest “hidden” part of it.

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