SPOTIFY AT 40:  Between the flurry of Pandora press releases around licensing deals and product launches, yesterday Spotify quietly announced that it surpassed 40M worldwide subs.  They don’t break out the US portion of that number, which is an important asterisk on their total.  As I mentioned last week, Spotify and Apple continue to grow subs simultaneously, which means the streamers aren’t stealing from one another.  It’s truly a “high water level floats all boats” moment for the industry as internet-based listening continues to surge across the board.  http://rainnews.com/spotify-zips-up-to-40-million-subscribers/

NO TIDAL FOR APPLE:  It’s been a rough week in the trades for Tidal, so yesterday’s announcement by Jimmy Iovine that Apple has no interest in buying the streamer seems like icing on the cake.  With bad financials and a relatively small sub base, many industry experts saw an Apple acquisition as the only logical end game for Tidal.  Even “industry expert” Kanye West was on board with the idea based on his “give Jay his check” comment, which is one of my favorite quotes so far this year.  Maybe we should start a Go Fund Me page to help Jay Z out?  J  https://www.buzzfeed.com/reggieugwu/apple-not-buying-tidal?utm_term=.lpjQ4EY5m#.aqX8k4gmE

WORDS TO LIVE BY:  And finally, I wanted to end the week with some uplifting wisdom from Christine Koehne, who is one of Pandora’s Account Strategists in Chicago.  This quote was shared in Pandora Pulse and is now making the rounds on LinkedIn.  I think her comment is so spot about the mindset we should all have a various phases of our professional development.  Words to live by CK – thank you for inspiring us!

Have a great Friday (and weekend) guys!

DIGITAL KILLED THE TELEVISION STAR:  You’ve been hearing whispers about it for years . . . and now the days is here . . . Digital Ad Spending in the US is surpassing TV Ad spending.  Hello!!!  What’s even more amazing than that simple fact is eMarketer’s forecast moving forward.  On the current trend line by just 2020 there will be 43% more spending on Digital than on TV.  Of course, TV execs will tell you a good portion of Digital growth is from Digital Video, and that’s just an extension of their product.  That’s partly true.  However, we can safely say the age of King Television controlling ad budgets from the comfy couch of America’s living room has officially come to an end!  http://totalaccess.emarketer.com/View/Article/US-Digital-Ad-Spending-Surpass-TV-this-Year/1014469

AUDIO’S SHARE OF BRAIN GROWING:  Each quarter Strata surveys 1,000+ agencies to gage interest in various sectors of the media landscape.  As you’ll see in the following Inside Radio link, consideration towards all-things Audio is up.  This is mostly driven by an interest in Digital Audio – with a full 55% of agencies saying they expect to spend more on the streaming side in the upcoming year then they previously have.  This jives with the “Golden Age of Audio” narrative we’ve been espousing for a while now.  As streaming proliferates listeners will consume more overall audio, and this increasing time spent will command more attention (and budget) from clients and agencies alike.  Keep in mind this is just a survey of agency opinions, not hard fact.  But at least Audio is growing it’s prominence inside the minds of the buying community.  http://www.insideradio.com/audio-industry-growth-attracts-more-ad-agency-interest/article_9dc262d8-7b1a-11e6-bd0e-1b96d75d333e.html

TIDAL’S FUZZY MATH:  More news on Tidal in the trades this morning.  This time it’s Tidal’s financials from 2015.  For the whole year Tidal lost $28M USD, on the weight of $35M USD in content costs.  Perhaps the most interesting # in the report is Tidal’s worldwide subs – at just 3M.  (That’s about 1/12^th Spotify’s total if you’re keeping score.)  What’s crazy is that Tidal’s total top line revenue is just $47M – so a little more than $15 per listener per year.  Consider that Tidal’s subscriptions cost $10-20/month (so $120-240 per year), and you’ve got a major disconnect in the numbers.  Either they’ve given away a ton of subs and very few listeners are paying full rate, or listeners only subscribe for a month or two and then drop off.  Regardless of the cause, there’s some sketch in these financials.  http://www.musicbusinessworldwide.com/tidal-lost-around-2m-a-month-last-year-while-seeking-extra-financing/

Have a great Thursday guys!

LABEL LICENSING-PALOOZA:  First up today is a scattering of articles from the various radio trades on yesterday’s label direct licensing announcements.  As usual, RAIN has the most in-depth coverage with a fairly detailed guesstimate on our strategic roadmap moving forward.  Obviously yesterday was only the beginning of the next chapter for Pandora’s product evolution.  Of course it’s an exciting time internally.  And it’s also nice to see that we’ve captured the marketplace’s full attention! (1) http://rainnews.com/pandora-closes-licensing-deals-draws-closer-to-new-service-launch/  (2) http://www.insideradio.com/free/latest-pandora-strategy-could-yield-b-sub-business/article_7dbec1bc-7a47-11e6-9586-3f74394c07c6.htm (3) http://radioink.com/2016/09/13/7589/

POSITIVE FORECAST:  Zenith Media is out with a rosy forecast on US Ad Spending – adjusting up its 2016 annual forecast to +4.4%.  This isn’t surprising give the quadrennial injection of ad money for Summer Olympics and the Prez Election.  What’s even more encouraging is that Zenith is forecasting another 3-4% growth in 2017 and again in 2018, which means they’re not expecting a “peak and reset” after 2016.  Zenith does a nice job of breaking down the projections for the different media types, so give it a read.  And some quick notes on the graph below – these percentages are from 2015 since it’s the last complete year data set.  And Internet Radio is bucketed under Internet instead of Radio. http://www.insideradio.com/zenith-global-ad-market-growing-to-b/article_c0924410-7988-11e6-9920-87ad077349b5.html

GIMME MY MONEY!:  Ok, here’s a weird one.  Tidal is accumulating a small mountain of unpaid bills, and several companies have initiated a debt collection processes against them.  Some of these seem a little small not to pay – although I would have enjoyed being at the $6,200 USD Norwegian dinner they had an outstanding bill for. J  Maybe just an operational hiccup in Tidal’s Accounts Payable department?  Or maybe where there’s smoke there’s fire? http://www.businessinsider.com/jay-z-music-streaming-service-tidal-accused-of-not-paying-its-bills-2016-9

Have a great Wednesday guys!

DETERMINISTIC DOUBTS:  In Chicago last week AdExchanger hosted an industry conference on all things programmatic.  Included was a really interesting session on Identify Graphing, which AdAge picked up in the following link.  Identify graphing, if you’ll recall, is the collection of profile data on individual consumers.  Just picture a virtual file with a bunch on linked information on individuals – like email address, device id, demo info, etc., all connected.  Obviously a completed identify graph is the holy grail for marketers.  It’s generally assumed that deterministic data (like user registration data on Pandora) helps marketers complete these graphs. But as you’ll read in the article, there’s even skepticism over the validity of the deterministic data.  Hence the dilemma . . . marketers are relying more heavily on data than ever before, but even the most reliable data sources may not be reliable enough.  http://adage.com/article/digital/marketers-identity-graphs-accurate/305787/

CAN CLIENTS AND AGENCIES JUST BE FRIENDS?:  There’s been much press in the last few months about the growing conflict between clients and their agencies over fee transparency, rebating, and the general feeling that agencies are prioritizing their profits over client needs.  I think the following MediaPost article is a refreshing and logical take on the situation, from sort of a “cooler heads will prevail” point of view.  The author’s main takeaways are that most clients still believe in the value agencies bring to the partnership, and clients just want a few relatively easy-to-make changes in the relationship.  The biggest two suggested changes are a la’ carte options, so clients can self-select the services within agency holding companies they want to pay, and fee transparency to know what they’re paying for and how their agencies are making money.  Not a list of crazy asks, right?  I’m thinking there’s an opportunity in here for agencies willing to take up these compromises.  http://www.mediapost.com/publications/article/284481/the-new-normal-in-agency-client-relationships.html?mkt_tok=eyJpIjoiT0RWa09XWXpaall5TUdWbCIsInQiOiI0Z083RnRvR1NIaVJcL3o0NWxCV2IwMndTVEE0MjJjZVI2K1IwOG9nNDc0bFY5NU53Y2JDUmpJdkNvU0s0WkRDb0FucGJkdEFkNkg2M0N2THpnMFwveWR1YklvNE1DaVwvU0kyRmx1dnlxMlk0VT0ifQ%3D%3D

CHICAGO OFFICE SHOUT OUT:  Next up is kind of a fun shout out for Pandora Chicago.  Our Chicago office has been commended by a few local publications for our innovative office design and work environment. We’ve even nominated for the 2016 Crain’s Coolest Office award!  The following link is some press pickup from Michigan Avenue Magazine – nice kudos for us!  Huge thanks to Joe Drucker, Dan O’Neal and our entire Facilities team for given us such a state of the art facility to call home!  http://michiganavemag.com/the-coolest-offices-in-chicago

LABEL LOVE:   And finally, lots of buzz in the trades today about Pandora’s announcement of Label Direct licensing deals.  I’ll let the press announcements you’re seeing this morning speak for themselves.  Sufficed to say this is a big day for the Mighty P!!!

Have a great Tuesday guys!

TARGETING BY ITSELF A NO-NO?:  A special Editor’s shout out to Karina Montgomery for forwarding me this beet.tv article and video.  It’s an interview with MEC Chief Digital Officer Carl Fremont.  Towards the beginning of the interview he makes the point that the pendulum has swung too far towards micro-targeting via data, and that brands need to find a better balance of storytelling on top of targeting.  This is an echo of what P&G CMO Mark Pritchard said a few weeks ago on their decision to reduce targeted ads on FB.  So this seems to be an emerging trend which more marketers are embracing.  Towards the end of the piece Mr. Fremont touches on video – stressing the importance of mobile and viewability as the next chapter in video’s evolution.  The interview is eight minutes long, but worth sticking with. http://www.beet.tv/2016/09/carl-fremont-demexco.html

DIGITAL TRENDS FROM THE PAST WEEK:  Late Friday AdWeek released its top digital trends from the past week.  Such and interesting list this week – everything from the social power of Pumpkin Spice Latte (who knew?!?), to Snapchat’s revenue growth, to Apple Music’s sub growth.  You guys already know about the big stuff – but it’s always a helpful look back.  http://www.adweek.com/news/technology/9-digital-marketing-stats-you-need-see-week-173370

BE A SHARK THIS MORNING:  And finally, this one’s an oldie but goodie and always gives me a chuckle on a Monday.  But there’s actually an important message in the Shark Monday proverb.  Our industry is loaded with talented people who work their butts off from noon on Monday until noon on Friday.  So how can you give yourself a competitive edge – it’s the work you do Monday morning and Friday afternoon.  Nobody needs to work 70-80 hours a week, a la Marissa Meyers, to get ahead.  Just give it 40-45 hours per week, and make sure every one of those hours counts.  It’s amazing how much further you can get ahead when you have your game face on at 9:00a on Monday, while everyone else is still trying to figure out the Keurig machine and gabbing about their weekend!

Have a  great “Shark Monday” guys!

TIM BEING TIM:  Earlier this week Tim made headlines at an investor conference by talking about a variety of topics.  Two of the most relevant ones for us are covered in the following RAIN article.  First, Tim gets very specific about Pandora’s vision for on-demand.  We’ve known internally about the 3-tiered approach for a while, and he resoundingly confirmed our intentions with his comments.  And second, he reinforces Pandora’s opposition to exclusive stream releases, which have been Apple Music and Tidal’s bread and butter play to drive new subs.  It’s great to see Tim forcefully lead on important industry issues like this!  http://rainnews.com/pandoras-tim-westergren-looks-forward-exclusives-are-a-losing-battle/

MORE SHADE ON EXCLUSIVES:  And speaking of exclusives, more pushback from the labels as noted by the WSJ.  My guess it that you’ll see fewer and fewer of these going forward.  http://www.insideradio.com/free/record-industry-looks-to-skip-streaming-exclusives/article_33e9cea4-7661-11e6-acd4-177ceb116238.html

ANYONE WANT TO BUY SOME DATA?:  The following AdAge article offers a glimpse into a fascinating trend that’s emerging amongst the largest national retailers – they’re becoming data platforms themselves.  For years both Target (Bullseye) and Walmart (WMX) have operated their own DMPs.  Pandora is already connected to both programmatically.  Now Target is taking the capability one step further by openly packing and marketing the data to CPG vendors who want to market to their customers out of store.  My guess is that it’s only a matter of time before hundreds of large national companies who already collect data will be doing the same.  http://adage.com/article/cmo-strategy/advertise-a-target-shopper-luck/305753/?mkt_tok=eyJpIjoiT0RrMU16azNNbVE1T0RObSIsInQiOiI4QTNIZHRReFRWcXR6d2NGWkx5VmV3TmpqTWUwd3BGWFRnVFhMUHV5b25uVWRxV2RMQm01eWRKVSt0RFFldlBBTEF5S2tvYVNBaEQ1cVUrTTFuY3dVdWZ1SllGR1hhNnVFQlwvUEJQMlJLeG89In0%3D

HISPANIC 101:  And finally, we’re already well-armed with data on our Hispanic audience, but it’s still nice to get a reminder of the power behind segment from an outside source.  With that in mind, check out the following Social Code article.  Really pay attention to points 6/7/8 – they speak to the prevalence of online usage by US Hispanics.  And then note 15, in regards to the language question.   Pandora’s Hispanic uniques represent one of our most powerful audience segs.  Tie our audience strength to stats like this and you’ve got a very compelling sell!  http://socialcode.com/thought-leadership/blog/insights-brief-15-stats-digital-marketers-know-hispanic-consumers/

Have a great Friday (and weekend) guys!

IMMERSIVE MARKETING 101:  Our first article appeared in AdWeek yesterday.  The first two points, about Native Integration and the Power of Audio as an ad unit, could have come directly out of a Pandora pitch.  This all contributes to a body of work becoming known as “immersive marketing”, where the marketer weaves their message into content the consumer is already interacting with.  Compare that experience to the forced mugging of interstitial ads, circa 2007, and you have the entire evolution of digital marketing in one microcosm.  Fortunately for Pandora we’re already “where the puck is going” on this one.  Very cool to be on the forefront here.  http://www.adweek.com/brandshare/why-future-digital-about-aligning-experiences-173120#!/

THE POWER OF PODCASTING:  The next pair of articles create a nice 1-2 punch for the popularity and efficacy of podcasting.  Edison’s Larry Rosen is quoted in both pieces with some strong recall and favorability stats from their latest podcasting study.  Given that the study was co-authored with the IAB (Interactive Ad Bureau), you can be confident that these numbers are legit.  I would also argue that these stats could apply to other streamed content sponsorships, like say Questlove Supreme, since the client messaging is woven in the same way as the podcasts.  Good ammo if you’re out there selling TAL or QLS extensions right now.  (1) http://www.mediapost.com/publications/article/284176/podcast-sponsors-find-engaged-audiences.html    (2)  http://adage.com/article/media/study-advertisers-increasingly-interested-podcasting/305738/?utm_source=digital_email&utm_medium=newsletter&utm_campaign=adage&ttl=1473870509

MORE TWEAKS AND MORE SUBS FOR APPLE MUSIC:  And finally, yesterday Apple held a news conference to announce the new iPhone7 and iOS10 operating system.  Within the launch news Tim Cook unveiled Apple Music’s new “more sleek” interface.  One interesting Apple Music stat for us is that they now claim 17M worldwide subscribers since Apple Music’s official relaunch last September.  You may remember Apple said they added 10M at the six month mark, so the new sub velocity is slowing some.  Granted 17M is still an impressive one year total.  What’s interesting is that this growth is happening while Spotify is growing their subs and while Pandora’s free service is at an all-time high AAS (Average Active Sessions).  So streaming is not a zero-sum game – meaning Apple’s growth isn’t coming from one of the other pureplays.  More than likely their deriving audience from the continued migration of AM/FM listening over to all-things streaming.  One other quick item of note is the # of Apple Music’s exclusive releases Tim Cook mentioned.  This has obviously been their bread and butter strategy to drive new subs.  Wondering how that will change once more labels stop doing exclusives.  http://rainnews.com/apple-music-has-17-million-subscribers/

Have a great Thursday guys!

A CHEAPER APPLE:  First up today is Apple’s move to discount it’s streaming service (Apple Music), with the offer of $99 for a one year subscription.  That price comes out to $8.25/mo, which is 15% lower than the $10/mo standard.  Initially this offer will be available only in Apple retail stores, on eBay, and on Walmart.com.  My guess is this will stay as a limited promotional offer, since widespread distribution could cannibalize the current $10/mo Apple subs and effectively cheapen down their entire offering.  It’s yet to be seen if consumers are willing to shell out $99 up front for the year – fewer than 1 in 5 are willing to pay even $10/mo, so does paying the whole enchilada at once scare folks off?  Worth keeping an eye on.  https://9to5mac.com/2016/09/05/apple-music-discounted-membership/

INSIDE THE MIND OF A HOLDING COMPANY:  Yesterday AdExchanger published an extensive interview with Jerry Buhlmann, the CEO of Dentsu-Aegis.  The main thrust of the article was D-A’s attempt to create a data ecosystem through the recent acquisitions of data specialist Merkle and the programmatic shop Accordant Media.  One interesting question/comment was on how Carat, D-A’s largest traditional agency, still fits into this new vision.  The other sensitive topic was the trend of top clients to in-house programmatic, and effectively squeeze their agencies out.  To that question Mr. Buhlmann responded “Programmatic is a specialist skill. Once a client brings it in-house, they have to invest in that business and keep it competitive. After a while, the quality and differentiator will decay and they’ll be back to outsourcing.”  Obviously this response is agency-biased, but it’s insightful to see how they’re interpreting this industry trend.  It’s sort of a long piece, but worth spending the time on.  http://adexchanger.com/agencies/dentsu-aegis-ceo-jerry-buhlmann-eventually-everything-will-become-programmatic/?mkt_tok=eyJpIjoiWkRFeU1HTTNZakE0WkdNNSIsInQiOiJwWUtBdzBXZ3l4MUpIanBveWI2YmhuRWVYR0ErdjJzTTR2aU1CVnlSWFBINFN2THl1dUJwenhNaCtvYjRjMlFIcW9wQkJsR1FkQmE5WUZ0UExqK09cLzJ2ejMxNVkrS2FxOE9KZjNnS05Qa2M9In0%3D

PODCAST GROUND RULES:  And finally, yesterday the IAB released its first set of non-binding industry guidelines for podcast measurement.  This is a nod to the growing presence of podcasting on the media landscape.  But to give you an idea how fast this sector is moving, the IAB’s guidelines are mostly centered around downloaded podcast.  The real cutting edge of podcasting has already moved from downloads to streaming delivery options, like Pandora.  All in, it’s still a positive to have the IAB begin to formalize standards around podcasting.  We’re just a few steps further ahead on this one!  http://adage.com/article/media/iab-tech-lab-releases-guidelines-podcast-advertising/305723

Have a great Wednesday guys!

IT’S AN APP WORLD, AND WE’RE JUST LIVING IN IT:  First up today is a validation of the notion that we’re officially living in an In-App world.  According to comScore, in July 59% of total time spent on a digital device was done via an App.  The breakdown of this stat is 50% on a smartphone and 9% on a tablet.  By comparison, only 9% of time was spent on Mobile Web (7% on smartphone and 2% on tablet respectively).  As we know by now, ad monetization always follows time spent on a platform.  So you can count on In-App advertising (not just plain mobile) to follow this surge over the next year or two.  http://rainnews.com/the-u-s-spends-half-its-digital-time-in-smartphone-apps/

AD FRAUD DILEMMA:  Over the past few years Ad Fraud has emerged as a significant barrier in digital advertising.  The following eMarketer article outlines the depth of the issue, with estimates of fraudulent programmatic ads running as high as 20-30% of total video and display ad delivery.  And what’s more disconcerting is that, despite agency and client attempts to raise the bar on its inventory providers, ad fraud remains as high as ever.  So what can an advertiser do to avoid impression consuming bots and malvertising virus?  Buy from direct publishers, of course!    The overwhelming majority of fraud comes from ad networks, and not site-sold publishers.  And for the cleanest of the clean publishers, look for ones with registered users – who have actual humans behind each account.  I know this sounds really basic, but clients who still insist on buying impressions at $1-2 CPMs on open exchanges should not be surprised when they get what they pay for.  http://totalaccess.emarketer.com/View/Article/Ad-Industrys-Focus-on-Fraud-Has-Intensified/1014430

FLAT IS THE NEW UP?:  If you call on a car dealership you’ve been hearing of the upcoming “unit plateauing” for months now.  That is, after seven consecutive years of YoY unit growth in the US Auto Industry, the dealers will have reached max sales capacity.  Based on the August industry #s, with all the major OEMs either flat or down, it might be occuring.  This stat comes with a few important caveats though.  First, one month’s sales data does not make a trend.  And second, even at the current sales levels the US Auto Industry is poised to sell an all-time record 17 million cars this year.  So while some could look at flattish unit sales as a glass half empty scenario, ther are 17 million reasons to think of 2016 as a glass half full sales year!  http://www.insideradio.com/free/august-brought-softer-auto-sales/article_b1522be0-7402-11e6-b8c6-cbaac67238a1.html

DIGITAL TRENDS:  And finally, I always enjoy these AdWeek Digital Trend summaries.  Points 3 and 4 speak directly to the Ad Fraud topic I addressed above.  http://www.adweek.com/news/technology/6-digital-marketing-stats-caught-our-eye-week-173273

Have a great Tuesday guys!

MORE BANK FOR THE LABELS:  As a follow up to yesterday’s article on label revenue from on-demand stream licensing, I thought it would be helpful to include the ad-supported side of the house. The attached article and graph show the labels’ worldwide streaming rev for both sides over the last several years. The dark blue ad-supported lines are basically all Pandora’s US-based compulsory licensing payments to Sound Exchange. As the article notes, the continued growth of on-demand streaming makes a good case for Pandora to move into this space.  http://rainnews.com/infographic-depicts-subscription-versus-ad-supported-revenue/

THE BEACONS ARE COMING:  In the next article eMarketer delves into the emerging trend of in-store beacons. For those not in the know, beacons are devices retailers can place in store to track and/or communicate with customers’ mobile devices via Bluetooth or NFC (near field communication). In its simplest usage retailers can figure out who’s in their stores – think about the kind of attribution research you could do with this information. On a more advanced level consider a CPG brand delivering an ad to your phone as you stand in front of a shelf of products (because the beacon knows you’re standing there). A little creepy perhaps. But talk about a way to get your product noticed over the other guys . We’re still way early in the beaconing game, but it’s good to become versed in this new technology. https://www.emarketer.com/Article/More-Marketers-Use-Proximity-Tech-Beacons-Closer-Action/1014428?mkt_tok=eyJpIjoiWXpBeVpUa3dPRGczTkRJNCIsInQiOiJaXC93bVU1N2FUOXo3SWV2MlhLWEZ6TGxYeDM4cUNIMDNcLzdVNEpsY2FxdUNqaWNxWVc1bWJEamIzbDRrYXgzdEtTd29lZEtXK0xjbzBvT1F2UzlcL2R5czladGlcL3hldmNhXC9SXC9jKzNiRHNxbz0ifQ%3D%3D

NEW TITLE NEEDED?:  So the next headline looks positive, right?  Radio reaping growth from more overall spending on Audio.  But when you look inside the numbers (and chart below), you actually see a negative trend.  Radio’s overall revenue has been flattish since 2010, and down over the last two years.  Even more pronounced is the gap in growth between radio and overall media spending.  The net result for broadcasters is a smaller and smaller slice of the ad pie every year.  Keep in mind, these stats don’t include pureplays like Pandora.  If those numbers were factored in overall Audio spending would be growing faster than the industry average – which should have been the correct headline to this article all along.  http://www.insideradio.com/radio-reaps-growth-from-expanding-audio-pie/article_bd72549e-701b-11e6-9002-f754a5c18dc0.html

Have a great loooong holiday weekend guys!