Pandora – Angel Street Capital

IS PANDORA RADIO? – WHY THIS IS A RIDICULOUS QUESTION

July 29, 2013/1 Comment/in Internet Radio, Pandora, Radio /by Robert Maccini

Ever since the rise of Pandora’s audience there has been an effort to try to position the service as “not radio”. I understand the defensive posture that terrestrial radio would like to take but in my view anything that competes with you is probably quite similar in nature. Consumption of audio takes many forms but in the end there are only so many hours in a day. Listening to Pandora most likely means less time spent listening to terrestrial radio (or did all of the 69.5 million active Pandora users never listen to terrestrial radio?). We can argue about which form listeners prefer. Currently terrestrial radio has the lion share of listening. Pandora’s audience seems to have peaked.

Frankly I’m surprised that Pandora has not attempted more music curation and localization (they certainly have the user data given registration). Could I choose which version I want? Time will tell.

INTERNET RADIO SOCIAL BUZZ

March 12, 2013/1 Comment/in Clear Channel, iHeartRadio, Internet Radio, Internet Radio Audience, Pandora, Rdio, Slacker, Social Media, Spotify, TuneIn, Uncategorized, WBLS /by Robert Maccini

Social Media is a key indicator of audience engagement and what is resonating in the social media ecosphere. While there are a number of social media channels for purposes of this analysis I chose Twitter. I utilized the services of Socialping, a company that specializes in Twitter audience metrics. Socialping provides twitter analysis including monitoring key words. I decided that I would apply Socialping measurement to Internet Radio. I created watch lists for key words for the following;, iHeartradio, Pandora, TuneIn, KROQ, Rdio, WBLS and Spotify. The measurement period is for one week beginning 2/25 – 3/3.

					Unique Reach
Service	Followers	Tweets	Retweets	ALL	Average
Iheart	154,957	9,993	6,553	16,546	2,909,856
KROQ	68,570	1,554	2,128	3,682	1,248,637
Pandora	148,716	521,263	118,693	639,956	35,760,075
Rdio	90,145	10,403	7,905	18,308	3,768,454
Slacker	41,270	20,952	481	21,433	1,430,976
Spotify	436,545	275,878	38,230	314,108	35,500,325
Tunein	42,649	68,691	18,147	86,838	7,000,918
WBLS	7,096	2,107	413	2,520	679,258

The above data reveals several key findings;

1) Spotify is the leader in followers with almost 3x that of Pandora. This is probably due to its more international offerings. However, Pandora and Spotify have approximately the same reach.

2) iHeart radio has more followers than Pandora. However, the # of tweets is only 3% of that for Pandora (Note: iHeart’s radio audience as reported by Triton Digital is 15.9% of Pandora’s). Has Clear Channel driven people to follow but they are not engaging with the service?

3) One of the top single stations in the country, KROQ has roughly half the followers of iHeart Radio.

4) While Tunein has less than one third the number of followers as iHeart they have 3x the reach.

CES- RADIO DASHBOARD FRAGMENTATION (PART II)

January 17, 2013/1 Comment/in Clear Channel, iHeartRadio, Internet Radio, Mobile, Pandora, Uncategorized /by Robert Maccini

As discussed in my prior post the technical side of car integration for Internet radio is difficult due to the many car companies, their suppliers and in dash systems. Pandora, Tunein, NPR and iHeart radio have an amazing lead on the terrestrial radio industry for real estate on the car entertainment systems. Pandora was integrated with every car company we visited at CES and claims to be integrated with 1,000 different devices. These integrated applications appear prominently as listening options. The rest of terrestrial radio streaming is for the most part not represented except as embedded in Tunein, Aha or iHeart. This is a major factor as to why many other radio stations have agreed to be included in the Tunein and iHeart platforms as it give them access to these distribution systems which also have in car access. However, in a point I made in an earlier post they are lost in a multitude of options.

Yes there is still a radio button in the car and this will not disappear any time soon. However, it is now just one of a multitude of choices. As we know people typically have about 6 presets (their favorites) and scroll among them. How will terrestrial radio compete in a fragmented dashboard. In my view it will not be based on music but other unique and local content. Unfortunately radio has reduced its investment over the last several years in its product. Very little programming is local and unique. Competition for other information such as news and weather is readily available from other sources. Those that do invest and have a multi-pronged distribution approach will be the winners.

CES- RADIO DASHBOARD FRAGMENTATION (PART I)

January 14, 2013/0 Comments/in iHeartRadio, in car audio, Internet Radio, Mobile, Pandora, Radio, Uncategorized /by Robert Maccini

We just returned from the Consumer Electronics Show in Las Vegas. The primary theme was Internet radio in the car. One of our portfolio companies, Livio Radio, announced FMConnect which allows terrestrial radio stations the ability to now take advantage of two-way communication (read; digital) utilizing the cell phone connected to your car’s entertainment system. Also Kudos to Fred and Paul Jacobs for inking a deal with Ford for their Ford Sync product. Unfortunately the car ecosystem is fragmented and confusing to a degree that is frightening. While developing an app for Ford is an attractive idea, keep in mind that this app will not work with all the other car companies’ entertainment systems. As currently stands a station would have to develop a different app for each car platform which is what Livio Connect is trying to eliminate. Livio is integrating with all car companies and their suppliers. Internet radio in the car can be achieved by many means as follows:

1) physical cable

2) Blue tooth

3) Wi-Fi

Some systems just mirror the phone with navigation still done on the phone. Others such as provided by Livio Connect allow listeners to control access to streams from the cars control. This makes controlling audio options much safer. This is also true of Ford Sync’s product but it of course is one of many in the car ecosystem and I don’t think that Chrysler is going to allow the Ford platform into their cars. Thus the need for a company like Livio which can work with all car companies because it has integrated into the chipsets of major suppliers of the in-car entertainment systems. Radio companies should leave getting connected in the car to auto industry experts given the vast, confusing world it represents and should partner with a company like Livio to deal with integration.

IS PANDORA’S AUDIENCE GROWTH SLOWING?

July 10, 2012/1 Comment/in Internet Radio Audience, Pandora, Uncategorized /by Robert Maccini

Today Pandora announced audience metrics for June 2012. While these stats represent significant growth over the prior year, June results were lower than May except for share of total radio listening as can be seen below:

Listener Hours – 1.08 Billion (- 1.8% May to June)

Share of Total U.S. radio listening ( +3.1% May to June)

Active Listeners (- 2.2% May to June)

May also includes the Memorial day holiday (listening is often lower during such periods) which makes the decline worth noting.

INTERNET RADIO AD TARGETING

April 23, 2012/1 Comment/in Ad Targeting, Internet Radio, Internet Radio Audience, Mobile, Pandora, Uncategorized /by Robert Maccini

Ad targeting in Internet radio does not deliver for advertisers at the local level. No it is not rooted in a problem with technology. As recent announcements from Triton Digital and Abacast make clear, the technology exists. However, since most station’s audiences are small and a significant amount is out of market listening (often over 40%) targeting will not yield impressions needed to generate significant revenue. As a result targeting at the station level makes little sense other than possibly to guarantee to an advertiser an ad won’t be heard out of the metro. Targeting is useful on a national basis as a combination of stations on a network can deliver results as long as the target is not too narrowly defined. Pandora is probably the only service that can target locally without aggregation due to the size of its network.

Most radio stations do not collect listener data for their streams so the only targeting that can be done is geographic based off of an IP address. Listeners will give up this data for something they value if it cannot be obtained from other sources, e.g. Facebook. Some targeting is done based on station format, e.g. an AC station’s audience is primarily 25-54. This is not always accurate. IP addresses are not always correct as well which can result in lack of delivery of the campaign.

Mobile targeting is perhaps the holy grail as you can reach consumers closer to the point of purchase. As with targeting to desktops the problem of scale is even a greater issue in mobile. We have heard that Pandora is having difficulty monetizing its mobile audience which is 70% of their total audience. I don’t quite understand this as I would argue that engagement is greater with a mobile phone than on a desktop (you may leave your desk but typically you don’t leave your phone). I believe that longer term we will see premium CPM’s for mobile. Effective ad creative and proper delivery will help.

iHEART RADIO FOLLOW UP

January 30, 2012/0 Comments/in Clear Channel, iHeartRadio, Internet Radio, Mobile, Pandora, Uncategorized /by Robert Maccini

I have received numerous comments about the post I wrote last week entitled “What do Broadcasters’s see in iHeartRadio”. My post has been interpreted in a number of different ways. Let me first state that iHeartRadio is a great service and one that I have loaded on my iPhone. Clear Channel has markedly improved the user experience, especially on a mobile device. In order for terrestrial radio to continue to be successful I believe these elements are key:

1) Reduction in number and length of ad breaks – iHeartRadio’s decision to run no ads was a great decision. When ads are introduced hopefully the spot load will be low.

2) Customization – With its newly designed customized listening experience iHeartRadio is on the same playing field with other services such as Pandora and Spotify for the first time.

I would like to highlight one reader’s excellent point. For smaller stations that can’t afford to invest in a mobile platform iHeartRadio is a way to for their listener’s to access their streams on mobile devices. Also integration with Facebook may be beyond smaller broadcasters capabilities. Further, due to its larger scale, iHeartRadio’s potential access to in-car systems would give smaller stations in-car presence.

My intention with last week’s post was to have readers take away that stations looking for monetization should not rely on iHeartRadio’s platform to deliver meaningful revenue.

More and more audio will be consumed via the IP channel. For any station to be successful it must provide a well thought out functional interface as well as desirable content. The listening experience with Internet radio can be active in that a listener can interact with the service while audio is streaming. iHeartRadio can provide such an interface for terrestrial broadcasters who may find it difficult to compete on a sheer music jukebox basis with such services. Terrestrial radio can capitalize on its unique content such as sports, news, local information, music curation etc. so, it does have this advantage. Their challenge will be to continue to provide such content in an environment where ad revenues are declining and those dollars that are invested are increasingly going to digital media. My hope is that terrestrial radio will rise to the challenge.

WHAT DO BROADCASTERS SEE IN iHEARTRADIO?

January 25, 2012/6 Comments/in Clear Channel, iHeartRadio, Internet Radio, Pandora, Uncategorized /by Robert Maccini

Is it extension of their brands? Is it increased advertising revenue? A new distribution platform? A number of broadcasters have agreed to have their internet streams added to Clear Channel’s iHeartRadio platform. Even though I believe in added distribution channels, there simply is very little benefit for stations to join and distribute their programming via this platform. Being added just means that you are one of more and more stations/channels on this increasingly fragmented platform. While stations may get to keep their in-stream audio ad revenue I’m sure Clear Channel is keeping all pre-roll and display revenue. Will this platform result in some added ad impressions and therefore revenue? Yes but not enough to buy a cup of coffee. Of the five featured stations today, all were owned by Clear Channel.

For Clear Channel this is a beautiful thing. They get content for free to add to the offerings on their platform to the consumer and take advantage of the effects of “the long tail” (No one broadcaster will benefit dramatically but Clear Channel may in the aggregate).

It appears that this is more a feel good strategy that terrestrial radio is doing something in digital. As I have noted before, Clear Channel is tiny compared with Pandora’s audience (about 15%). Based on Triton Digital December 2011 Internet Audio ranker, even if you added all of the top 20 terrestrial stations’ audience including Clear Channel it would still only be 42% of Pandora’s audience . What’s more, Pandora’s audience is increasing rapidly while the terrestrial stations audience has not increased over time.

THE STAKES – INTERNET RADIO AUDIENCE MEASUREMENT

December 29, 2011/0 Comments/in Arbitron, Audience Measurement, Internet Radio, Pandora, Radio, Uncategorized /by Robert Maccini

We have been watching the recent developments in Internet radio audience measurement. Here are the stakes:

– ARBITRON is trying to develop new business and generate more revenue

– PANDORA wants to have audience data to sell advertising and capture a portion of ad revenue going to radio

– ANDO/TRITON wants ARBITRON to stay out of Internet audio measurement so it will not have a giant competitor

– CLEAR CHANNEL et al don’t want Pandora to be able to compete for radio advertising.

What all parties need to consider is what advertisers want. I have to chuckle at some of the points raised recently by Arbitron. Does a moving people meter really mean someone is listening to radio? If an audio source is present near a people meter did the listener actually initiate it? Was it really their choice? I have always believed that server side data is better than an estimate. PPM methodology is an estimate based on a representative sample (many argue the sample is too small). With server side data you have actual data – use it. Ando Media currently uses server side data to prepare its Webcast Metrics Internet radio top 20 ranker. Arbitron has announced that they are going to utilize server side data as well although many of the details are still forthcoming. Arbitron is being held hostage by its existing terrestrial radio clients over measuring Internet radio only stations such as Pandora. Of course terrestrial radio companies represent the bulk of Arbitron’s current revenue.

Audience data is utilized in Internet radio as a predictor of the number of ad impressions that can be generated. Audience measurement data is not used to calculate ad impressions. When a listener starts a stream then most ad servers, including Ando, will then insert ads prior to the stream playing ( preroll) or then begin inserting audio on receiving an ad cue. You do not have to be listening for any set period of time. By its very nature, in Internet radio each impression is counted when a listener actually hears the ad. Do advertisers care that different people hear different ads? You bet but not why ARBITRON raises this issue.

Maybe what we need is an impression measurement validation firm. In any event it’s going to take some time to sort out Internet radio measurement and it’s unfortunate that there is not a larger advertiser voice? Some big dogs are in the fight.

INTERNET RADIO IN THE CAR

June 23, 2011/0 Comments/in Internet Radio, Mobile, Pandora, Radio, Uncategorized /by Robert Maccini

In car listening is going to drive significant growth in Internet radio listening. In car listening to terrestrial radio represents the largest percentage of total listening and I believe the same will be true for Internet radio. Internet radio in-car listening is already occurring by connecting your mobile phone in various ways to your car’s stereo/entertainment system. I have always thought that it would be the phone that ends up being the device that serves as the conduit for in-car Internet radio listening. No one wants to set up yet another interface for listening and smart phones have now become practically ubiquitous. The collection of wires, adapters, bluetooth devices all deal with what is termed the auto after market (making a system work given what is already installed in your car).

One of the companies focused on in-car Internet radio listening is Livio Radio. Livio has many systems for making in-car Internet radio listening a possibility. The one I like the best is called “The Kit” which works with Blue Tooth. You download the Livio Radio app (which has 45,000 internet radio stations) and plug the nice looking compact device into your 12 volt lighter port. Via bluetooth the Livio phone app starts and your choice of Internet radio station plays via your car speakers. This approach works for the auto aftermarket but I would rather not have to insert the Livio device into the lighter port. The after market solutions will continue to be utilized for several years given the millions of vehicles already on the road today.

Only major Internet radio brands such as Pandora will be able to integrate with car manufacturers so that they are built in. There is a multi-year lead time and Pandora has been working on car company integration for some time. Car companies will not deal with a multitude of Internet radio providers. However, Livio Radio will make it possible for all Internet radio brands to participate. Livio has developed an API (think interface) that allows this seamless integration between internet radio stations and a cars entertainment system. The ease of use which terrestrial radio has had in the car for decades has to be present for large scale consumer adoption.

Terrestrial radio has a hard time understanding that in the end the consumer will decide what, where and how they would like to consume audio content. I believe consumers want Internet radio in their cars.