Online music services, otherwise known as music subscription services, appear to be the “next big thing” in consumer audio consumption. But sorting out the players isn’t easy, especially once you get past well-known names like Pandora and Spotify.
Here’s a mini roadmap. We’ve omitted Clear Channel’s iHeartRadio, with which RW readers are more familiar, and other services that could easily be included, like SiriusXM’s online service.
Our thanks to Tim Davis, director of digital at Jacobs Media, for his advice and guidance in crafting this list.
APPLE iTUNES RADIO
Unveiled on June 10, Apple’s much-anticipated iTunes Radio service takes a page from Pandora’s playbook with its provision of free content, and commercials to pay the bills.
The service is going to “personalize” listeners’ music, based on what they have already purchased from iTunes, and what they have been listening to.
Pandora
Listening to where, exactly? Pay $25 to subscribe to iTunes Match, and the service, according to iTunes, will check “which songs of yours are available in the iTunes Store, and then any match will be automatically added to iCloud for you to pull up and listen to anytime.” Which means you cut back on storage space.
Subscriptions also come with a commercial-free version of iTunes Radio.
Will Apple iTunes Radio fly? Well, the sheer power of the Apple brand is enough to give everyone else in the online music business the willies. After all, Apple’s iTunes’ online music store is a proven powerhouse, with more than 25 billion songs sold as of February this year.
Also, according to a Wall Street Journal article from June 26 (“Apple Spells Out iTunes Radio Terms”), Apple is offering to pay record labels 0.13 cent royalties per listen of a song, as compared to Pandora’s rate of 0.12 cents per listen, giving Apple a slight edge (as of press time).
In essence, competitors beware: iTunes Radio launches this fall in the United States.
GOOGLE PLAY (MUSIC)
Since its launch in November 2011, Google Music (now merged with Android Market to make Google Play) has yet to seriously challenge the biggies in the online music space. But given the sheer size of the Android/Chrome user base, this may yet happen.
In May, the service headed by Google Play Vice President of Content Jamie Rosenberg launched a pay version for $9.99 per month called “Google Play Music All Access.”
Rdio
That service gives users access to millions of songs across fixed and mobile devices, plus the ability to create radio stations and discover new music. An iOS version of the All Access app is expected to be out soon.
GROOVESHARK
Launched in March 2006 and headed by Chief Executive Officer Sam Tarantino (a co-founder along with Josh Greenberg), Grooveshark is the “Can’t Kill ’Em Kid” of online music services. It has survived having its apps pulled by Apple, Facebook and Google, in response to Grooveshark being sued for copyright infringement by major music labels. In April this year, Tarantino was quoted in Mashable claiming that he was “broke” (in the same article, he was reported to make $60,000 a year).
Today, Grooveshark offers free music by artist or genre on easy-to-use, low-hassle www.grooveshark.com, and has launched a premium service called Grooveshark Anywhere. For $9 per month, or $90 a year, Grooveshark Anywhere subs get access to the company’s Android/ “jail-broken” (meaning free of certain restrictions) Apple/BlackBerry/Nokia/Palm mobile app, plus other exclusive features.
Grooveshark has a combined total of 30 million unique visitors per month for both its free and premium services. It seems highly unlikely to dethrone Pandora, but equally unlikely to simply fade away.
PANDORA
Online since the summer of 2005 and headed by CEO Joe Kennedy and Founder and Chief Strategy Officer Tim Westergren, Pandora is the Microsoft of online music services. Translation: It is the 800 pound gorilla in this space, but its dominance is uncertain, given not only the launch of iTunes Radio, but also Kennedy’s decision to retire with no successor in sight at press time, and Pandora’s difficulty in turning a profit due to ongoing music royalty payments. It offers a free version with ads and a premium subscription ($3.99 per month or $36 per year) without ads, called Pandora One.
As of April, Pandora had more than 70.1 million active monthly users; out of that, 2.5 million or so are paying for Pandora One. Pandora is the leading OEM-installed app for Internet-connected TVs, DVD players and set-top boxes.
Slacker
As Player Number One, Pandora is in the crosshairs of Apple and Google. Concerns over Apple’s iRadio copying Pandora’s approach initially hurt Pandora’s stock value, which has since rebounded. Additionally, Jacobs Techsurvey 9, a survey of radio users, recently found that Pandora’s decision to run more commercials is motivating fewer people to use the service, yet Pandora is reporting more revenue earned per subscriber (either through ads or premium subscriptions). As well, its new “Pandora Premieres” feature lets paying subs hear new albums in full before they go on sale, and subs enjoy that.
RDIO
Created by Skype founders Niklas Zennström and Janus Friis in 2009, Rdio.com takes a social media approach to music, with users encouraged to share songs and playlists with each other.
It is available online and on major smartphone platforms, in both free and paid versions ($9.99 per month for Rdio Unlimited on Web, mobile and supported players; $4.99 per month for Web only).
The company isn’t releasing user numbers beyond that, saying, “Since the end of 2012, we’ve tripled our number of new users.”
Rdio.com’s backing by Skype’s founders, and its “music discovery” features — letting listeners hear new songs similar to those they have personally selected — have won it respect from consumers and online music service critics. Ninety percent of its subs are on the $9.99 Rdio Unlimited tier, according to an email from Rdio to Radio World.
RHAPSODY
Given its December 2001 launch date, Rhapsody.com is the granddaddy of major music services, and has a made a respectable run so far, with 20 million subscribers and 1 million paying customers. And it acquired infamous former online music downloading service Napster (remember that?) in 2011.
Headed by President Jon Irwin, Rhapsody boasts 16 million songs playable on more than 70 consumer electronics devices, including connected audio systems, smartphones, Android tablets, MP3 players and connected TVs — and no ads.
Spotify
It pioneered the concept of a monthly flat fee in exchange for unlimited access to music. Today, Rhapsody has two paid plans; $9.99 per month provides unlimited music playback plus downloading of music to one mobile device, while $14.99 per month allows downloads of music to three mobile devices.
SLACKER
Founded in 2006 and relaunched in February 2013, the freshened-up Slacker.com has been picked by many, including Forbes magazine, as a worthy challenger to Pandora and Spotify. Helmed by President/CEO Jim Cady, Slacker offers more than 200 “expert music curated” stations. That means they have actual human DJs, plus access to more than 13 million songs online.
Slacker is available on the Web and for smartphones, with billing and distribution deals with every major North American wireless provider, and as an installed option in cars. The new Slacker has more than 6 million listeners, with 3.5 million on mobile and 100,000-plus subs for its premium service.
$9.99 Slacker Radio Premium has these features plus music, lyrics, and custom playlist creation on demand. For the basic $3.99 per month, Slacker Radio Plus has no ads and ABC/ESPN.
SPOTIFY
With more than 24 million users, 6 million of them paying subscribers, Spotify.com is a big player in the online music space. Spotify’s major hooks: Many musicians have publicly voiced their support for the service
As well, Spotify’s integration with Facebook means that Spotify subs can see what other Spotify users are listening to. (This said, a number of Spotify users have objected to their music choices being made public.)
The free Web service has ads; the Unlimited service ($4.99/month) has no ads but is Web-only. Spotify Premium has no ads, all devices and costs $9.99/month.
TUNEIN
Serving some 40 million listeners each month, TuneIn.com was founded as RadioTime in 2002 and became TuneIn in 2010. The company is headed by CEO John Donham. Unlike other music services, TuneIn’s angle is to provide access to actual radio stations (AM/FM/Web) online, with the number of available outlets currently at around 70,000.
The critically-acclaimed (by PC Magazine and Macworld magazines among others) site also has 2 million programs available on-demand. Its platform is available on over 200 connected devices; vehicles made by BMW, Ford, GM and Tesla; on smartphones and tablets, smart TVs and even refrigerators.
The $4.99 TuneIn app (android) allows DVR-type recording and playback of radio programs.
What new media music platform do you favor and why? Email [email protected] with “Letter to the Editor” in the subject field.
