Magnus Shaw in his latest blog talks about the current situation of internet only radio stations and the reasons behind their failure in acquiring larger audiences. Lack of scale, revenue and a prohibitive royalty cost structure to name but a few.
On the flip side music streamers such as Pandora, Spotify and Rdio have the scale and the revenue but they also have a high cost structure. Laura Sydell asks, ‘Can streaming services make money?’. ‘Pandora” has to pay 64% of its revenue as royalty and Spotify pays 70% of its revenue as licensing fees. The more we listen the more they pay but also the more ads they can target at us for ad revenue.
And there is the need to be reinvesting in the product and audience growth. This level of initial and on going investment is a big barrier to entry for many would be investors.
Drew Larner, the CEO of Rdio, thinks there’s a lot of money to be made. “With real scale, ” he says, “We will absolutely be profitable….wildly profitable.”
Moving on to a more technical note. Jonathan Milne, General Manage, Europe at Celtra, explains why the digital advertising ecosystem needs to re-tool and skill-up if we are to deliver a slick and interactive user experience.
Here’s this week’s round up:
Why internet radio has failed to make a big noise?
Internet-only broadcasting is certainly accessible. Almost anybody can be up and running via the internet in a few minutes. Great, right? Well, only up to a point – read the full article here
Can Streaming Services Make Money?
“It costs us essentially around $20 in licensing fees for every thousand hours that we play in music,” he says. “That means that we have to make $21 in revenue for every 1,000 hours to make a dollar.” – read the full article here
The imperative for HTML5 mobile & tablet advertising
With time spent on mobile and tablet devices due to surpass time spent with desktop devices during this year, it is vital for the digital advertising ecosystem to re-tool and skill-up for HTML5 advertising. The time to act is now – read full article here
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