Apps & Mobile

Rhapsody Offers Sage Advice To Rival Upstarts

Jon-MaplesBy Jon Maples of Rhapsody for sidewinder.fm, a music and tech think tank.

One of the wonderful and humbling aspects of being in the streaming music business for over 10 years is that we’ve seen lots of strategies and ideas over
time. Trust me, Rhapsody does not like to be considered the old man who yells ‘get off my lawn’ to upstarts. But it seems like some our streaming brethren
are trying things today we’ve tried before, with mixed and sometimes absurdly expensive results.

Two recent trends seem familiar. First is Spotify’s television advertising campaign. Granted, Daniel Ek’s
startup tapped Rhapsody’s former ad agency, Droga5. So maybe it’s no surprise that there’s something amazingly similar to the Spotify spots and the ads we
ran 2008-2010. They both forge an emotional connection to music. Both have interesting visuals that have raised a few eyebrows.

And it’s not just Spotify who is advertising these days. Outside of the huge outdoor billboard campaign Rdio is running, the San Francisco-based streaming
music service aired this spot featuring Paramore on The Voice last week.

But what exactly are these companies advertising? We tried the emotional connection to music with our Droga5-produced bubbles ad early on. The ad featured a woman who dove off a building into a bubble that immersed
her into music. She dove into another bubble, and the music changed. Nice idea. Hard to understand in terms of product. Or value proposition. Or pretty
much anything outside of diving off high rises, which we neither condone nor recommend.

After that we tried an artist-centric ad. We produced a spot where Jay Z posed through all his
iconic album covers. It was a great ad…for Jay Z. For Rhapsody? Not so much. Most people didn’t even know it was for our streaming service.

It really wasn’t until we focused on showing the customer benefit with our more practical, but less ethereal ‘ Desmond and Molly’ spots that we actually started to sell the value of our service. I know this is
revolutionary, but it turns out you need to show what a service does to actually sell…the service! And no matter what you may think about the downhome
style of the Desmond and Molly spot, it significantly outperformed any thing we ever did.

Full disclosure: it’s no secret that we compete with both Spotify and Rdio for customers. But there is also a great deal to admire about both services. We
love the viral nature of Spotify and the social features of Rdio. We certainly have questions about the long-term feasibility of both services. But any
company who proves great value is good for the entire streaming music sector, which we are all trying to build.

If we’re going to be successful, we all have to start with the service, up front and center.

Way back in 2006 Rhapsody had a service available on the desktop client and non-iPod MP3 players like the Sansa E200R. But what we didn’t have was a
website. So we went all in and built out a web product. For the launch of Rhapsody.com, we partnered with the labels to create Rhapsody 25. Any user,
regardless if they were a customer or not, could play 25 tracks on Rhapsody without a credit card or email address. Just type Britney Spears ‘Oops I Did It
Again’ into Google, and voila! Instant playback on Rhapsody.com! What could be better?

Well, lots, apparently.

Instead of selling the value of Rhapsody we ended up with lots of people who were more interested in hearing the song once and going away. Honesty compels
me to admit that the experience could have been much better, but still—it seemed like we were missing something.

The good part about the free plays was that Rhapsody 25 users were playing the song on a paid service rather than going to BitTorrent to download it. But
it was not selling Rhapsody enough that customers would ever pay for the service.

Since I’m that sort of streaming music geek, I closely tracked plays for Paramore on Rdio during its release on Tuesday. By Tuesday midday,
Paramore’s new record had 130,000 plays and its artist page had 200 follows when I looked.

After the ad aired on The Voice Wednesday night, Paramore’s plays on Rdio jumped to 250,000, yet the follows only increased slightly, to 260.
Today, it’s up to 1.3 million plays, but only 760 follows for the band. It would seem to me that a play means a customer is more interested in sampling the
song and when a fan follows a band, they’re getting the more immersive experience that streaming services like Rdio provide for both the artist and the
fan. So my theory is that most folks who came to Rdio did so to play Paramore’s record and didn’t stick around to experience a deeper connection with
Rdio’s service.

So what does this all mean? Paramore gave Rdio the exclusive for their new record as a trade for being featured in the ad. Great for Warner Music Group.
Fantastic for certain fans of Paramore, who got to play the record gratis. What’s questionable is what Rdio will really get out of it, particularly since
they only were granted US rights and there were many, many complaints from Brazil customers on the site hoping to play the album.

For the record, Rhapsody would have loved to offer the record. But we’re not sure if exclusives really do help either the service or the band. Last month
we had 30,000 fans play the band in our service. All who pay $10 a month to listen to all music they care to. Which they can do today since Rdio’s exclusive is over.

Since neither of our companies sell advertising, Rdio and Rhapsody are in the business of sourcing, identifying and enticing fans who are willing to pay for music. How you go about that is the hard part. My belief is that streaming companies have to sell the value of a music service and the
benefits to customers instead of relying on an emotional connection to music, giving songs away or buying exclusive rights to a band’s new release.

Jon Maples is the VP Product and Content at Rhapsody

Sidewinder.fm is founded and edited by Kyle Bylin of Live Nation Labs. If you would like to contribute a post to be featured on the site, please reach out.

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6 Comments

  1. Interesting piece and perspective on exclusives and freemium experiments. The amount of churn and free-to-paid transition in the on-demand streaming space would make any executive cry, though I’ve always wondered why Rhapsody has not enjoyed the same conversion success as Spotify.
    In many ways, experience could be a hindrance. In the streaming space, being around in 2002 could actually be hurting the ability to see the market in a fresh way, for a range of reasons. In fact, I’ve heard many VCs say that some of the biggest successes come from the greenest of startups, the ones that weren’t there for the early days.
    Then again, I’ve been a sharp critic of Spotify’s gigantic expenditures and financing load, not to mention their very dicey financials.
    Good read.

  2. I think you bring up a good point. A lot of innovation does come from breaking the rules or challenging a established status quo. New entrants, though, do not have institution or history to guide them. Thus, they may try things that are hard and break through over break down. I have always believed that our experience informs our decisions, but it also prevents us from trying foolish things that could actually work out. Put simply, once you build a box it's hard to think outside of it. When you have nothing at all, anything is possible.

    Sent from Mailbox for iPhone

  3. I’m skeptical about using play-to-follow ratio to distinguish moochers from buyers. I’ve been a paying customer of Rdio for over a year, but I’ve never followed an artist. Until I read this article, I only thought you could follow listeners.
    Since I regularly check the New Releases category, I’m not sure I see the benefit of following artists through a streaming service compared to Twitter or other general purpose social networks, where artists are much more likely to provide updates beyond album and tour launches.
    I think Rdio has been shrewder in their billboard advertising by sticking to more abstract artwork evoking the music listening experience (like Apple’s iPad commercials) rather emphasizing specific artist endorsements—though the Paramore deal is an exception that will probably turn out to prove Maple’s warning correct.

  4. I have been a subscriber for so long, I don’t remember when I started with MusicMatch, then Rhapsody. Recently Rhapsody’s tech support has been less than helpful. I am seriously thinking of switching to Spotify. Could someone at Rhapsody please help me on a higher level? I think my ticket is still open.

  5. Jason,
    Hi, my name is Steve, I am a cusotmer service agent for Rhapdoy, can you please e-mail me at socialmedia-help@rhapsody.com and I will be more than happy to help you with your issue. Please include your e-mail address associated with the account, your issue and any prior indicent numbers
    I am sorry for your inconvenience,
    Steve

  6. I agree with Sidewinder about the need to break a few rules to bring about innovation. Looks like Rdio and Rhapsody both have a bit of work to do, but I’m sure they have enough oomph to work out the right solutions! 🙂

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