Unboxing Pandora

Why The New Royalty Rate Matters Little For The Digital Radio Giant

Yesterday, the Copyright Royalty Board–the three-judge panel that sets the rates that non-interactive radio services pay –set the new rate for the coming year 21 percent higher than the previous year. Services like Pandora were seeking a lower rate. SoundExchange, which represents rights holders, requested a higher rate. The CRB playing a wise Solomon, split it almost right down the middle, settling at .0017 per song played.

And then the industry yawned.

As a refresher, in the United States, music companies can offer playback by taking advantage of a compulsory license set forth in the Digital Millennial Copyright Act. All you need to do is follow the rules for non-interactive digital streaming and pay SoundExchange for all the plays within 45 days. This rate does not affect directly licensed services, like Spotify, Apple Music, or Deezer.

Disclosure: I work at 8tracks, which offers non-interactive radio in the US and Canada. These opinions are mine and don’t represent the company. See 8tracks CEO David Porter’s opinions on the subject here.

Moving On
The CRB rate seems like it’s already an antique of past days. Call it the iPhone 1 era. Remember way back in 2005 when you’d fire up Pandora, pick an artist and sit back and listen to an awesome radio station?

The world has moved on from those olden days. Thanks to YouTube, Spotify and Soundcloud, a whole new generation of listeners have grown up being able to play whatever she or he wants at any time. Also, listeners can skip as much as they want and save tracks to their phones with a premium account; all functionality that requires agreements with labels .

In terms of growth, relying the compulsory license has hemmed in Pandora. Spotify has been able to grow leaps and bounds by launching in country after country. Meanwhile poor Pandora is only available in the United States, New Zealand, and Australia as only a few countries offer compulsory licenses. Its growth has slowed dramatically compared to Spotify.

Directing the Action
Pandora understands that if it wants to offer some flavor of on-demand features and do it around the world, it’ll have to sign direct deals with labels. The company has already signed similar deals with all the major publishing groups to pay songwriters.

So the days of Pandora relying on the CRB rate are numbered. Of course the rate is still important as it sets the floor from which all parties will negotiate, but it really doesn’t truly matter as much as it once had.

The CRB seems like it would like to get out of the business of setting the rate. The rates in the following four years will be based on the increase of yearly inflation, which might be the template in the future.

A Pound of Flesh
While Pandora said it was pleased with the rate, it’s not all smooth sailing for the company. Up next will be sitting down with major labels to hammer out agreements for sound recordings. After years of deep discontent with Pandora, I would bet that labels will be licking their chops to dictate onerous terms. And if the company wants to offer the ability to download tracks to a phone or up the skip limits, its gonna cost an arm and a leg.

But still, there is a path forward. Pandora recently purchased some of the assets of the much admired yet failing Rdio streaming service in preparation for an on-demand world. After months of uncertainty, Pandora’s stock perked up, rising about 13 percent the day after the announcement.

Beginnings and Endings
The CRB also simplified the rates down to a single one from three. iHeart Media, the terrestrial giant also saw its fortunes improve. Its rates dropped 22 percent when the CRB eliminated the blended rate that companies who offered more than just non-interactive radio used. On the opposite side, the elimination of the small webcaster rate means that tiny services are facing the end of days, as the new rate means their costs have now gone through the roof.

Digital musics’s chorus doesn’t really change much. Let the beatings continue until the morale improves.

 

Grow Fast And Burn Cash

By all accounts, the music service Rhapsody has been on a roll. Subscriber numbers continue to grow. The company announced an innovative use of a trial based on plays that makes it appear like free music on Twitter. It recently acqi-hired a team of developers who built a social sharing application named Reveal.

Disclosure: I dirtied Rhapsody’s white boards when I worked there from 2004 until 2013. 

More revealing, however, is the cost of growth. Real Networks is compelled to disclose Rhapsody’s financials in its 10-K reports, and the most recent results are brutal. Rhapsody lost $8.9 million in the first quarter of 2015. The Seattle-based company lost $1.6 million in the same quarter in 2014. Rhapsody had to borrow $10 million in cash from Real Networks and its other owner–the private equity firm Columbus Nova.

Do You Know ARPU?

So how can the company grow subscribers, but losses continue to escalate? It’s pretty simple. The company’s average revenue per user (ARPU) is slipping. Badly.

Most, if not all, of Rhapsody’s growth has come from their cellular carrier partnerships, like T-Mobile in the United States, Telefonica in Latin America and Vodaphone and SFR in Europe. These deals are awesome for distribution. But the deals provides just a fraction of the revenue a retail customer in the US provides the company. So instead of making, say, $5 bucks a month for each retail customer who signs up directly, Rhapsody might make $0.50 on per each user month of Brazil’s Vivo Musica, if not even less.

As I posted earlier, Rhapsody’s cellphone carrier strategy is a sound one, if the company can do two things: make up the loss of ARPU by dramatically increasing the volume of partner subscribers and bolster its brand to sign up a number of high ARPU customers the company has traditionally attracted in the US.

Rhapsody, just like everyone in digital music, is probably feeling the pressure of Spotify’s successful year. The company continues to sign up tons of high-value premium customers as it expands around the world. There’s some evidence that Spotify is taking the oxygen out of the market. Spotify’s premium users grew the equivalent of Rhapsody’s entire subscriber base in two months at the end of last year. The company grossed over a billion dollars in revenue last year.

And Rhapsody’s losses are a drop in the bucket compared to Spotify. The Swedish-based digital music juggernaut lost $184 million in 2014, according to recent reports. Based on how the company continues to harvest the private markets for more and more cash, Daniel Ek’s company makes Rhapsody’s losses look good in comparison. Rhapsody appears to be more like a rock-ribbed conservative banker compared to Spotify’s sailor-on-shore-leave approach to spending. We are clearly still in a Grow Fast or Die Slow stage of development, and Rhapsody has playing the best hand it has available.

The digital music market has long valued growth at any costs over rational business planning. That may be changing as Universal Music Group is starting to question the value of free music. There’s been many reports that Apple is pushing UMG to have Spotify limit or end its unending stream of free music as a way to sign up paying customers.

UMG CEO Lucian Grainge may see Apple as the best of both worlds: a 100 percent paid service that has access to hundreds of millions of credit cards. If Apple is the White Knight that will save the music business from itself, or just another Trojan Horse is an open question.

7 Points I Wish Team Tidal Made

Tidal talked about its new music service, but didn't give many details. I added a few myself.
Tidal talked about its new music service, but didn’t give many details about plans or product. I added a few myself.

For those not living under a rock, Jay-Z presented Tidal, the industry’s first artist-owned music service on Monday at a press conference that has been widely mocked for being heavy on lip service and platitudes and extremely wanting in details. Jay spent a reported $56 million to buy Tidal from its Norwegian corporate parent Aspiro AB and there’s been a lot of speculation about what Tidal could be up to.

It’s premature to call it a failure (though the tech press didn’t have any qualms doing so) as we don’t know what Tidal is going to do. But without details, I was really wishing for more from 16 of the biggest names in the music business Monday. The fact is that an artist-run streaming service should have a different outlook at how a music service should function, from its relationship to listeners to how artists are compensated. Here’s a few suggestions for what Jay and team could have said.

  1. “First and foremost, Tidal is going to complete the fan experience. Too often we’re asking our fans to do too much work and it hasn’t gotten easier in streaming. It’s gotten harder! I believe first and foremost that if we’re asking fans to pay for music, then we better be delivering a lot more value than just access to music. To that end, Tidal is going to focus on shortening that distance from the music fan and us, the artists.”
  2. “Sharing music is a great way for our fans to show their love for our music. We’re going to make it extremely easy for fans to share music and enable playback of tracks in a limited way, regardless if someone is a Rdio, Pandora, iTunes or Spotify listener. Our project is called EasyShare and it requires all the services to cooperate so that it’s easier for our fans to share their love of music. It also supports all the services, since, let’s face it, people are using a little bit of everything these days.”
  3. “Okay, we’re superstars. But it’s not easy for artists these days in all genres and levels of their career. We believe in fairness for all artists. We’re going to make sure that the way artists get paid in our streaming service works for everyone, from the superstar to the struggling artist. Right now it seems like payments for streaming seem like a ‘winner take all’ proposition. So we’ve asked leading economists to look at the pro-rata share of determining compensation to investigate if it really is the best way to pay artists.”
  4. We’ve informed the major labels that we want to renegotiate our contracts with them. Our number one priority is to make sure that more money from our service goes into the pockets of artists. So we’re going to add what we’re calling a ‘Transparency Clause’ into the contract that will require labels to quantify how much money they’ve received from us, and what percentage goes to artists. We believe this number will help artists understand the moneyflow and make sure that the billions streaming services are paying labels don’t turn into fractions of pennies for artists.”
  5. We also won’t sign non-disclosure clauses with any label and we will post the details of all of our deals so that the artist community knows exactly how much money is going into the coffers of labels for their content.”
  6. “We believe in artists. And that’s just not performers, but also songwriters. So we’re going to help solve the problem of getting songwriters paid. Right now, music services like Tidal can only pay 70 percent of royalties because we just can’t identify who should get paid. We’ve earmarked $5 million that we’ll give to SoundExchange to develop a Global Rights Database. The database will endeavor to identify the publishing rights for every song in the world with the end goal of getting every single rightsholder paid for every play. We have calls later today with Daniel Ek, Doug Morris, Jeff Bezos, Tim Cook and Lucian Grainge urging them to contribute to this extremely important endeavor.”
  7. “We’re going to support artists by investing in causes that are important to them. Therefore, we’re going to contribute the money that Tidal paid us for exclusives to MusicCares, which helps artists who are in need of economic support often for medical problems. We’re asking our subscribers to join us in supporting this vital non-profit service.”

Accordion Games: Why Spotify’s Free Service Should Constantly Grow And Contract

Here we go again.

Spotify is running into trouble with someone else in music. This time it’s the behemoth Universal Music Group. UMG’s CEO Lucian Grande woke up one day and figured out that Spotify was giving away too much music and it was impacting digital sales, which have slumped considerably. The company controls a considerable amount of popular music throughout the world. In some markets it’s as much as 40 percent of all music sales, so when it doesn’t like something, you can be assured that something’s gonna change. Outside of the absurdity of all this, there is a point here. And it comes down to the funnel.

You see Spotify uses free music as a customer acquisition funnel. By getting the largest number of people possible playing music, Spotify believes that it can convert a significant number of them into the paid products. Spotify has pushed to create the biggest funnel possible by giving unlimited free music on the desktop, and allowing shuffle play listening for free on mobile phones.

All information has shown that Spotify has had a great year. Its growth numbers in free and paid listeners has grown tremendously. Early data signals are showing that Spotify ate into other free services, like YouTube. And while the company wheels out data points that claims it hasn’t eaten into iTunes sales, it bends credulity to believe that Spotify hasn’t eaten into track sales.

Think Accordion, Not Funnel

The main point of Spotify’s troubles  comes down to how it considers free playback. The company would have much more success in identifying those who would pay by considering free as an accordion that expands and contracts from time to time. Instead of 100 percent free plays all the time, the company could limit free playback occasionally, or better yet, carve up its user base into intelligent cohorts based on their playback behavior and value to the company.

So if listener creates awesome playlists that gets tons of followers, that person gets as much free music they want. If someone shares more playlists than most, free music. If one has more active friends, give ’em free. The company could even create scores based on user’s future possibility that they might subscribe and keep them around. Others should see a wall when they get to a certain number of plays. And when Spotify’s funnel starts to collapse, open it up again. Free music for everyone.

It has been my contention that sooner or later, Spotify will have to have a system like this in place. Right now, the content costs are crushing to the company, and eventually, playtime will be over. Time to get the books right. But right now in its run-up to an initial public offering the company is 100 percent focused on growth. Therefore, it must keep the funnel as big as possible.

And finally, it’s absurd to think that the major labels are going to do anything to jeopardize Spotify’s IPO. All the labels own a chunk in Spotify and will benefit from the IPO. It could be big money. Just last year UMG made hundreds of millions on Beat Electronics sale to Apple. So free music might be more limited sooner or later. But let’s not pretend free music is going anywhere before Spotify makes labels millions.

Jonmaples.com: Major Label Are Truly Home of the Free (Music)

FT: Universal Takes On Spotify’s Free Model

Fake Fight: As Apple Preps Streaming, Labels Sing The Same Song

BillboardFight Between Apple and Spotify Could Change Digital Music

This is amazing! First, we hear there’s a lack of comfort with free music and how Spotify should have so many more than 15 million paid subscribers. Then Apple marches in, provides market research evidence to the labels how many more customers (and therefore, revenue) the industry could garner with a lower price point and labels say ‘no way.’

Why? Well, then labels would have to offer lower pricing to the entire industry so to not advantage Apple. Glen Peoples‘ source at the end of the piece is absolute right: labels are deathly afraid of Apple becoming the entire music industry. A strong Spotify is required to counter Apple. Freemium isn’t going anywhere, though a listening cap could come back for a brief time, as it did a couple years ago.

No matter what others in the media absurdly suggest, the reason Apple isn’t interested in freemium is because it doesn’t need it. The main goal of freemium is to attract listeners and then slowly convert them over time into a paid tier. Listeners won’t be a problem for Apple as the streaming app will be pre-loaded on every iOS device and most likely baked into iTunes.

Free Music Lives

Trust me, Apple will feature free music in the streaming product. But instead of paying for freemium, the company will offer labels promotional opportunities. Nobody can bundle the power of the iTunes store with free streaming for a week or month. That’s a killer combination for labels, even with paid downloads falling.

And converting those listeners into subscribers? Apple already has an enormous amount of valid credit cards, so it’s just a matter of signing in to subscribing. So why would Apple pay hundreds of millions of dollars to major labels for freemium when it already has distribution and payment covered?

Price Fixating

Eddy Cue, Jimmy Iovine and the Apple team have been harping on labels to consider lower the price of streaming. There’s been more and more data analysis showing a lower price of streaming will lead to many more customers signing up, more than making up for the loss of revenue. And I’m sure that Apple presented significant market research and bulletproof data that proved the point.

Despite overwhelming evidence, the labels stuck to their guns, and said if you want to charge less, you can pay for it. Meanwhile the largest streaming service in the world, YouTube, continues to give away free music at a scale the dwarfs Spotify and Pandora combined.

And you wonder why the music industry can’t grow. Not that we needed more evidence.

Please Release Me: The Industry, Music Release Day and Listeners

There’s been a brewing controversy in the industry recently about the music release day. What, you might ask in this age of you YouTube, Spotify, Pandora, iTunes, radio, leaks, and Soundcloud, is a release day?

I’m glad you asked. One day every week, new music is released to retail outlets and streaming services. But here’s where it gets tricky. It’s a different day in many countries. In the US new music day is Tuesday. But in the UK it’s Monday. Japan, Wednesday. Germany and France, Friday.

Why is it different? The release day has been driven by music charts. In the US, the Billboard and Soundscan charts run from Tuesday to Monday to match up with the release day. Though the origins of why we ended up with Tuesday in US is not clear, some state it also had to do with physical distribution of LPs, cassettes and CDs.

But with the a global market building and physical retail fading, there’s been clamor for standardizing the day, so that consumers in the UK don’t get a huge global release from an important band a day before consumers in the US or Japan.

After polling the industry and doing market research, this week the IFPI, the global recorded music trade organization, recently suggested Friday is the top contender to become the global music release date.

Once word got out all hell broke loose.

US retail industry, who pushed for either the world changing to Tuesday or even perhaps Monday, strongly objected to Friday. Target actually suggested it would stop selling CDs if the date changed to Friday.

Martin Mills, chairman of the powerful Beggars Group of indie labels had this to say at a conference in the UK:

“Whilst I acknowledge the needs of a digital world for co-ordination, it seems to me to be crazy to throw away one of the trading week’s two peaks, and the ability to restock and rectify errors before the week’s second peak. It astounds me that the major labels are not listening to their customers, their interface with their artists’ fans. I fear their consultation has been a charade, and the market leaders were always going to push this through. I fear this move will also lead to a market in which the mainstream dominates, and the niche, which can be tomorrow’s mainstream, is further marginalised. I fear it will further cement the dominance of the few – and that that is exactly what it is intended to do.”

Music release day matters quite a bit for the industry and Martin is right: the bigger the act, the more important a single release date will become. You can see with global tools like Twitter, Facebook and worldwide(ish) services like Spotify, it’s hard to have a consistent marketing message. After all “Hey, my new record dropped. Check it out Monday in London, Tuesday in New York, Wednesday in Tokyo and Friday in Berlin” won’t really fit in a Tweet.

There’s also other elements to consider: distribution of products, promotional plans, radio appearances and a myriad of other now worldwide tasks that the industry must do to get music–and the word—out to the public.

But that’s really not a music fan problem. It’s an industry problem. So why are we making it a fan problem?

Look, I get it. A single global release day makes sense. And we should be doing everything possible to assist in supporting–if not expanding–retail channels. It’s still, for now anyways, the best way for the industry to make big revenues. A single release day would help.

But it also seems like we’re just rearranging the deck chairs on the Titanic. Why are we focused on these old models? Meanwhile the new way fans listen, streaming music, is held captive by the old models. Based on the amount of customer feedback and market research I did while at a streaming service, it’s clear that a massive number of listeners don’t even know which day is ‘new release day.’ Sure those superfans who raced to Tower Records to pick up Viva Hate at 10 am on Tuesday, March 22, 1988, yeah, they know.

It’s my belief that the average music consumer doesn’t know–or care–which day new music is in the stores or goes live on streaming. And the fact is that streaming services have new material go live every day of the week. So do streaming services need to a ‘new release day?’

Well, if your plan is to prime the publicity pump so you can get a number one record on the charts, sure. But what if your job is to make the music fan happy seven days a week? Not particularly.

In terms of music services, we’re in this awkward stage of development. Sure, services have proven popular with music fans. Yet we haven’t fully transitioned into a different world.

A perfect example of this is the industry’s attempt to determine how many streams equal a track or album sale. Billboard now says a thousand streams equal a track sale. How did Billboard settle on 1,000 plays? It’s not because of revenue generated by the services, because that info is unavailable and disputed. It’s not how many times a listener plays it before purchasing a track. A 1,000 plays seems like a random number that sounds like a lot. Why not 500 plays? Or 5,000? Or 50,000?

While equating plays for a sale does serve those people who are supporting the old model, it’s utterly empty of any value to streaming companies. I wrote in depth about some of these issues in Junk Food Data.

Streaming services are facing significant issues with customer acquisition and retention. Each company needs to be laser focused on what it takes to make customers happier to retain the paltry number who have signed up. Streaming must influence the industry and make it understand its success factors if we have a prayer at replacing the lost retail revenue with paid subscriptions.

And if we continue to pay attention to the past? Then, I’ll take a deck chair with a nice view of that iceberg.

More On Old Models

Billboard Why Are Albums Released on Tuesday (For Now) in the U.S.?

Musicweek IFPI Confirms Friday Global Release Day

Wall Street Journal Record Labels, Retailers Can’t Agree on Which Day of the Week to Release New Music

Jonmaples.com The Value of Nothing: Don’t Except Junk Food Streaming Data

Sweet and Lowedown

Will Apple’s Tastemaker Test Win The Streaming Music Challenge?

Apple made big news last week by hiring one of the music’s best tastemakers, Zane Lowe, the preeminent DJ on BBC Radio 1 who has introduced the world to artists like Arctic Monkeys, Gnarls Barkley, Adele and Sam Smith.

With Zane’s hiring and the reported tapping of other music journalism talents, Apple is betting big on the ‘human curation’ chestnut that Jimmy Iovine used to sell the service to music fans, and more importantly, to Apple last spring.

Curation is believed to be a solution for streaming music’s problem of what to play next. All-you-can-eat music services like Spotify and Beats provide access to tens of millions of songs, but listeners consistently run into the issue of figuring out what they want to hear next. So by creating recommendations, radio stations and playlists that the music fan might like, curation helps alleviate the problem.

Except it isn’t that easy.

Why? First, is there’s a lot of music. Millions and millions of songs are available on these services and figuring out everything about the music is rather difficult. And then there’s the user expectation. A broadcast radio tastemaker like Zane is pretty adept at talking to a lot of people at once, but streaming the music customer expects—if not demands—a unique music experience based on their taste and listening habits.

The Beats Formula

Curation solutions have come in two flavors. Companies either use automated technology solutions, like Pandora’s ‘music genome’ and the Echo Nest’s taste profile. Or you hire a staff of music experts to pick music.

Beats’ Co-CEO Jimmy Iovine and Chief Creative Officer Trent Reznor rightfully pointed out that most services have the soul of a hard drive and that music fans craved more in a music experience.

Beats preferred playlists selected by humans, experts on music who understood what the listener needed music for, like cooking dinner, exercising or studying. The startup went on a spending spree, hiring a team of music programmers to build playlists and pick the perfect song. While others, like Rhapsody and Emusic, had staffs of curation experts long before Beats, Jimmy was the first to make human curation the main selling point.

When it launched, Beats had subscribers  select their favorite style of music. Afterwards, the service would feature playlists built by their staff of music experts who hailed from the radio industry and music blogs. Beats playlists were indeed compelling but the depth of the lists appeared to be light and the curation stale. After all, how many times can you listen to the same 15 tracks on the Indie Breakup or 2006 Hip Hop Gems playlist? Fact is hand curation requires a lot of hands to consistently churn out new lists, something the service didn’t quite get right.

Emotional Math

Beats management objected to algorithms that automatically choose the next song based on a set of rules. “The promise of algorithms that we’ve all bought into over the past few years, that you enter a band and you are going to hear a ton of music that’s all based on that seed,” Trent Reznor told USA Today last year. “I think we’ve all realized the reality of that is that it’s a shallow puddle, it immediately kind of sounds good and then you realize the limitations and you start to hear the machine in there.”

“(With an algorithm) you are using math to solve an emotional problem,” is the way Jimmy Iovine put it. He is partially correct. When the catalog is tens of millions of songs and you have millions of customers, picking what song comes next can only be tackled by math.

It’s impossible for a service to function without any algorithms. There’s just too much data and you need to rely on something with automated rules to do some of the heavy lifting. Even Beats, despite its marketing message of ‘the music service with music experts’ had several different algorithms that were used in the service or under development.

So marketing pitch or not, everyone (in one way or another) must use math to solve these problems. The success or failure of algorithms and curation depends on how companies employ the products and who’s in charge.

It’s far from me to tell Apple what to do, but hey, that’s never stopped me from dispensing advice of questionable value. Here are my guiding principles for building curation and algorithms in streaming services.

  1. The Right Tool for the Right Job

As much as I have a problem with Pandora and their marketing of the ‘music genome,’ the company sure went about solving the right problem with their algorithm. Simply put, Pandora is designed to serve up around 40 solid minutes of songs for the person who likes to listen to music. It doesn’t do more than that and that’s a good thing.

Technology products get unwieldy because they are designed like a Swiss Army Knife. My general rule is that technology solutions need to be designed to nail one solid use case at a time. Expansion beyond that gets to be tricky.

A good example: I recently spoke to David Porter, CEO of 8tracks, a radio service that features playlists curated primarily by the service’s pro DJ community. David mentioned that 8tracks had recently hired a data scientist to match his listeners to playlists that they might enjoy.

An algorithm must be very good to nail this use case, but it doesn’t rise to the level of a playlisting algorithm, where a user will think you don’t know music nor them if a Coldplay song ends up in a Jose Gonzalez playlist.

Defining what your algorithms are meant to do and sticking closely to those use cases is vital for success.

  1. Man Guides The Machine

An algorithm must be built as a tool for curators and not simply a technology product. Therefore it must be tunable and adaptable. There is no such thing as ‘code lock’ on an algorithm.

In my experience, this is not the way many algorithms have been built. Machine learning–the ability for algorithms to improve based on usage–is a big topic right now for many technology companies, but I have yet to see one example of a music algorithm that gets smarter with time. Ensuring curators have input and a modicum of control of algorithms is extremely important.

  1. Playing Your Position

What makes managing a music algorithm so absurdly challenging is that no single person is qualified to manage it. You must posses a full understanding of music composition as well as its place in culture. You should have the knowledge of how a data scientist goes about their work. And you have to have a keen observation about how consumers behave in the system.

Without any leg of this stool, the product will end up hamstrung. It cannot be managed by one human, unless you have a consumer driven, musicologist, data scientist on staff (not bloody likely), therefore it requires a team of experts to tackle the problem.

Each will bring an expertise and needs to trust other members of the team. Success should be judged on results and data; not taste or perfect code.

  1. Match Curation to the Taste of Your Listeners

This one is easy to say and hard to pull off. Curation should closely mimic the usage in your system. While a marketing approach will influence who your listeners are, good old data and analytics should be fastidiously monitored and results fully understood by the team.

A curatorial staff must adapt their approach to what the listener is doing, and what brings more value to their experience. And above all, it’s about your listeners’ tastes. Not your own.

Tim Quirk, my former boss at Rhapsody and formerly Google’s global content programming head, authored the objective approach to editorial that we practiced heartily at the service. He recently posted a series of tweets that questioned the practice of tastemakers being the lead programmers at services and believes that curators should function more like ‘park rangers than gatekeepers.’ “Yay curation. But boo anyone who thinks he or she knows better than you what you should listen to,” Tim summed up.

  1. There Is No Finish Line

The algorithm will constantly need to adapt to the music, the customer usage and the technology. Likewise music trends change over time. After all, few could have predicted the amazing rise (and the fall) of EDM? As long as you have music, you must have a team who lives and dies to have the perfect music catalog, the algorithm and the curation to fully create a great music experience.

The promise

The first generation of streaming services focused closely on catalog and access. We’re nearing the end of this era, as pretty much everyone has the same catalog and the apps are very similar. The next phase will focus on the music experience of the services. Curation, whether lovingly hand-crafted by humans, or processing massive amounts of data crunched down by an algorithm, will be the battlefield all the services will vie on over the next couple years.

We can already see this battle taking form as ‘the humans’ vs. ‘the geeks.’ That’s a mistake. A company needs to seamlessly blend these talents together to build curation that listeners will enjoy and create true value.

More Curation on Curation

Billboard What Apple’s Hiring of Zane Lowe Signals for the Company’s Music Strategy

Hypebot Zane Lowe Could Do More For Discovery At Apple Than Echonest’s $25.6 Million Does For Spotify

Music Ally Apple Hiring for iTunes Role with ‘Specific Expertise in Music Journalism’

Business Insider What We’re Hearing About The New Music Streaming Service Apple is Developing in Secret