A Quick Look at Lessons Learned From Streaming Radio Services
Remember Grooveshark?
Streaming radio services have come and gone—Grooveshark included—in recent years, but for some, the rise has been dramatic and they’ve managed to remain a staple in most of our lives (see: Spotify, Pandora). Others aren’t so lucky (see: Grooveshark, Rdio).
The product was a needed one.
In an era where the CD was starting to lose its dominance, and YouTube and pirating became the go-to sources for on-demand music, it was only a matter of time before enterprising entrepreneurs took notice. They did in droves.
Some have been good, others bad, but no matter what happened to the business itself, there are a few lessons to learn from their arrival.
Consumers Will Pay for Convenience
Spotify and Apple Music have proven that customers will pay for convenience. The CD isn’t convenient. You must go somewhere to purchase (either physically or online), find the disc you want to listen to, and *gasp* change discs when you want to listen to something else.
That sounds like an antiquated notion at this point, doesn’t it?
iTunes was a great start when it came to on-demand music, but with The Pirate Bay and others just a few clicks away, you’re always going to be left to wonder just how much revenue they lost due to pirating.
Enter the new wave options of on-demand streaming music. These services came seemingly out of nowhere and dominated our collective conscious with the music we wanted, no need to leave the platform to buy, and one small monthly fee to include all the music one could ever want…well, mostly.
Consumers will pay for things that make their lives simpler; $120 a year to have an unending supply of music and features we all love, like playlist creation, discovery engines, and social elements to share our music with friends, was just smart business.
The only thing most were missing out on was live radio which was quickly fixed with the emergence of platforms like HAKT Radio and iHeart Radio.
For the first time in history, it actually feels like a significant step backwards to have to listen to FM/AM radio without the options we’ve come to expect from streaming services.
Ad Supported Is a Great Free Option
Premium models often hover around the $10 price point, and it leads consumers to higher-quality streaming and an ad-free experience. That said, many have opted to offer free accounts that feature advertisements, and that’s proving to be a huge moneymaker as well.
Spotify and iHeart Radio have small breaks in the action from time-to-time to play sponsored messages, while others, like HAKT Radio, remain ad free.
You can’t go wrong here as a streaming service. No matter which model the user chooses, the company is still able to monetize the content.
Move Slowly and the World Passes You By
In a post-mortem on the now defunct Rdio (recently purchased by Pandora), The Verge crafted a brilliant narrative about the speed at which Spotify acquired users all while Rdio seemed to be determine to let marketing initiatives pass them by in order to play the long game and slowly build a user base.
The strategy failed miserably.
You can’t move slowly in a business that is measured in a history of years and not decades. Rdio learned this the hard way.
In spite of Spotify’s ever-present marketing, buzz, and breakneck pace of rolling out new features and options, Rdio stood idly by and let the business—that was once valued at $500 million and perhaps headed for IPO—fizzle into nothingness only later to be scooped up at salvage yard prices by Pandora.
The successful move quickly. The slow are quickly forgotten.
There are lessons to be learned here that you can apply to any business. Find a need, a way to monetize it, and move as quickly as possible in order to remain relevant to the ever-changing needs of the tech-centric world we live in.
Godspeed.
