Streaming music has been the focal point for all too many startups in the last several years. Companies like Pandora, Imeem, Lala, and now Spotify have invested tens of millions of dollars, only finding that it is really a hard nut to crack. After all, how exactly are you going to make money? The struggles of Rhapsody have shown that not many people are willing to pay for a streaming service, and audio ads haven’t really taken off in the way that people thought they would.
In recent months however, things have started to pick up. First off, Pandora raised an additional $35 Million to accelerate growth. Then, Swedish upstart Spotify announced it was bringing its slick new application to the US sometime in the next few months.
Now, we hear that Google is launching its own music streaming platform. Exactly how this will sync up with cellphones and mobile devices is unclear, but having the trusted Google brand name (and wallet) behind a streaming service could really push this market to the next level.
If even one of these companies manages to reach profitability and shows some ability to scale, it could usher in a new golden era for the music business. Exciting times ahead!
Archive for October, 2009
The Music Streaming Wars
Wednesday, October 28th, 2009Sellaband’s Innovative Funding Scheme
Wednesday, October 21st, 2009Sellaband is an interesting startup that seeks to democratize the process of raising money for an album. Fans of an artist can contribute anywhere from $10-$10,000 each towards a band’s album production. In return, the band specifies what the investor will receive (maybe a percentage of sales, maybe free merchandise), obviously dependant on the size of the contribution.
While I don’t think this is a scalable model, it can be used for artists (and labels) to potentially defray the recording expense. Sure, record sales are falling, but costs are also going down. Labels and artists should consider using tools like Sellaband to break even on the recording costs, and shoot for profits on touring, licensing, and merchandising.
Techcrunch has an article about one bigger artist that is clearly going down this path.
Amie Street Partners with Sony
Wednesday, October 14th, 2009Variable pricing has just started to break through in the music business. The basic idea is that consumer demand, not labels, should dictate prices. Amie Street has built a rapidly growing business around this concept, and they recently took an important next step by partnering with Sony.
Under the partnership, Sony will offer its entire catalog to be purchased on Amie Street. There will be three price tiers: $1.29, $0.99, and $0.69. This is very similar to the new itunes pricing structure.
Overall, this is a good step for a major label to take. It is important to understand that music prices need to adapt to consumer demand. Lets see how this impacts the industry moving forward.
Auto-Tune IPhone App
Wednesday, October 7th, 2009Smule just recently released “I am T-Pain” a new auto-tuning iphone app. The app has gotten ridiculous traction so far, with more than 300,000 paid downloads (at $2.99 a pop, that’s some serious cash flow).
I haven’t actually tried the app myself, but they are temporarily dropping the price to $0.99 to get more people involved. While auto-tune can be annoying, it can also be a lot of fun to play with.
Check out the full article here. Please share if you have had any fun experiences with this application!