Spotify – Angel Street Capital

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.

News that Spotify is about to launch in the U.S. has caused me to examine how this new entrant will impact Internet radio. There are significant differences in the Pandora and Spotify offering. Pandora has a giant head start having over 80 million registered users and an average audience of 451,024 AAS Monday-Sunday 6 AM – Midnight (according to Ando Media’s November Webcast Metrics). If you ask most people whether they would like to choose the music they listen to or have someone play songs based on attributes of music, the overwhelming majority will choose the former. Whether they actually engage in the behavior of creating a playlist or do not have the time wanting to be more passive and have songs chosen for them remains to be seen. While I believe both Spotify and Pandora can coexist, Spotify is going to substantially curtail Pandora’s growth. Pandora touts personalization but Spotify is the ultimate in personalization. One can argue that Pandora may be better for music discovery but Spotify has a built-in social aspect which allows music to be easily shared among friends. A Pandora IPO should happen soon or they risk having those upward to the right audience growth charts flatten out..

Where does this leave terrestrial radio. Unfortunately for those stations in the music arena – far behind. I am still hoping that the terrestrial stations streaming on line will adopt a different approach but the high degree of fragmentation makes this difficult except for perhaps CBS and Clear Channel. Clear Channel has been quite active promoting iHeart Radio. Aggregating all of their stations however is not enough to compete with Pandora and Spotify longer term due to their relatively low level of personalization.

Let the games begin….

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The Coming Battle – PANDORA VS. SPOTIFY

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