Pandora, iTunes, Spotify, Rdio All Try to Take a Bite Out of Radio’s Dollar
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Assessing the ad-supported digital-music-streaming landscape is like figuring out which sets to catch at Bonnaroo. From Pandora to Spotify to Clear Channel’s iHeartRadio to Apple’s new iTunes Radio, there are so many options for marketers. Too many.
Even Rdio, known for its clean design and subscription model, is planning to launch a free, ad-supported desktop version of its on-demand streaming service by the end of the year. “We wanted a perpetual free offering. We’ve seen as the market has evolved [that an ad-supported free service] drives virality and an active user base,” said Rdio CEO Drew Larner.
For the latest generation of digital-music services, it’s becoming clear that paid subscriptions won’t cover content-licensing costs. Pandora, for example, expects 80% of its revenue to come from advertising. The internet-radio pioneer and its brethren hope they can divert a swath of local-radio ad dollars their way. But for that to happen, they have to get bigger in local markets and offer mobile ads tailored to local audiences. Kinda like radio.
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