IT’S RAINING PURPLE ONLINE:  Yesterday’s Prince’s music finally became available across all the major streamers after an 18-mo exclusive deal with Tidal expired.  Count me as one of Prince’s fans who’s thrilled to finally be hearing his music again.  And I’m not afraid to admit that I participated in a middle school dance routine to “When Doves Cry”, minus the bathtub part of course!  From a business standpoint here are a few observations.  First, what was Tidal hoping to get out of the exclusive arrangement?  Subscriptions didn’t go up during the 18 months, and they’re not doing well financially.  Thinking they might second guess the deal if they could go back in time.  Second, why doesn’t broadcast radio play more Prince?  Outside of the occasional “Little Red Corvette” or “Kiss” on a Classic Hits stations, you rarely here him anymore.  And it seems like there’s plenty of pent up demand for his music.  And finally, Prince had a notoriously difficult relationship with digital music dating back almost 15 years.  Take a look at the attached time line Music Ally compiled from their coverage during this period.  And yes, even that cringe-worthy July 6, 2010 comment about the internet being completely over. L  Still love the Purple One, regardless!  (link)

KNOWING WHAT YOU DON’T KNOW:  For years radio broadcasters have struggled with the dilemma of getting their reps versed in digital media.  Teaching an experienced radio rep the nuances of digital has been compared to teaching a fish to ride a bicycle. J  To shine a light on this challenge Borrell Research surveyed over 2,000 clients and agencies about their radio reps’ digital proficiency.  The  following Inside Radio article frames the results as a positive, with 22% of respondents saying their reps are Extremely or Very versed in digital.  But I’m thinking this is actually a giant negative, with 67% of respondents saying their radio rep is Moderately or Slightly knowledgeable on digital.  And what about the poor 11% of radio advertisers whose reps know nothing about digital?!?  Not a great report card on a traditional industry that’s still struggling to find its digital footing.  (link)

YouTube . . . Say Hello To Facebook:  Finally today, Bloomberg has an article on the emergence of Facebook as a potential player in the on-demand music video space.  This would be a direct assault on Google’s YouTube which has dominated the sector for 10 years.  It’s well known that the music industry isn’t happy with YouTube’s licensing payment model, which is a basically a rev share on ads served when the artists’ videos play.  The preferred method for artists and labels is the flat pay-for-play model which the music streamers generally abide by.  Hence the opening for FB to cut more lucrative deals with the labels and quickly gain entry into the music video biz.  How this plays out, and how YouTube reacts, will be interesting to watch.  (link)

Have a great Tuesday guys!

IT’S A BEACON WORLD, AND WE’RE JUST LIVING IN IT:  Ever think cell-based lat/long targeting could become obsolete?  Well that may happen if beacons and proximity-based targeting hits critical mass.  The following AdAge article lays out some very compelling stats on this emerging sector of media.  As of Q4’16 there were roughly 13M proximity sensors (aka beacons) in stores throughout the US.  That’s triple the total in the field from Q4’15. Approximately 20% of these beacons have the capability of delivering some sort of ad message to your mobile device when it’s within the proximity range.  The messages could be simple in-store ads (think of a digital version of POS display), or third party network advertising, or even couponing from the retailer or from brands who have products on the shelves of the store you’re currently in.  This could be a game changer for any location-heavy category – so think Retail, CPG, QSR, etc..  We may end up living in a beacon world sooner than you think!  (link)

RIP NET NEUTRALITY?:  Right before Donald Trump took office, I mentioned the FCC’s current policy of Net Neutrality could be modified or completely reversed.  For a refresher NN is a government regulation which prohibits cable and cellular providers from prioritizing the delivery of certain content over others.  Proponents of the regulation say without NN we’ll see the creation of “high speed data lanes” where individuals can pay a premium for higher speed delivery, effectively slowing down non-premium content delivery.  Critics say NN in non-competitive and will dampen overall tech innovation.  What’s important now is that the FCC’s new Chairman Ajit Pai is firmly against NN, which was established during the Obama administration.  Therefore the industry is expecting a modification or full rollback of the policy.  However, Mr. Pai hasn’t indicated how he’ll try to change the rule.  Full details are in the attached Reuters link.  (link)

CHEETOS TAKING A STAND FOR IMMIGRATION?:  Finally today, if you didn’t catch the SNL/Cheetos skit on Saturday night its worth a quick watch.  It speaks to the creative dilemma and possible trap brands can find themselves in right now.  Every client wants their brand to have a positive image, and sometimes that image can extend past the intrinsic nature of the product itself.  Think of De Beers  promoting diamonds as a symbol of forever love, and not just a hard shiny stone you can wear as jewelry.  But can this thinking go too far, like trying to make a cheesepuff snack stand for immigration freedom or transgender equality?  We saw this happen a few times in the Super Bowl (especially the Airbnb ad), and my guess is we’ll see several more of these social cause overextensions in the months to come.  (link)

Have a great Monday guys!

REVENUE AND SUBS SURGE AT PANDORA: Lots of press on yesterday’s Pandora Q4 Earnings Call.  The news was overwhelmingly positive with revenue beating expectations on the strength of +16% YoY growth, and 81M average monthly listeners.  One of the most intriguing developments was the early success of Pandora Plus which added 375K new subscribers since its launch in October.  Keep in mind this is the setup product for the full Premium service which debuts in March.  The popularity of the Plus option, with no real marketing push behind it, is strong anecdotal evidence that the Premium launch could be a real home run.  I’ve included two Radio Ink links cover both aspects of the Earnings Call.  (link1)  (link2)

ACCULTURATION CATCHES UP TO UNIVISION:  For years Univision has been the dominant Hispanic TV network in the US with Telemundo trailing way behind.  But that order is being reshuffled as of late.  The reason for this shift, as hypothesized in the following LinkenIn post, has to do with the acculturation of US Hispanics.  As 2^nd and even 3^rd generations of Hispanic immigrants grow up in the US their cultural tastes become a blend of Mexican (or whatever originating country) and the United States.  Up until now Univision’s programming hasn’t mirrored this shift – they’re still programming identical content to what you would see in Mexico.  But Telemundo has been savvier about create custom content aligned to the specific tastes of acculturated US Hispanics.  It’s a trend which is important to watch since Hispanics are an ever-growing segment of the US population.  (link)

THE TWITTER PARADOX:  Yesterday Twitter reported dismal financials during its Q4 Earnings Call.  Revenue was essentially flat YoY, operating losses swelled to $167M (in just one quarter), and user growth has stalled to a paltry 2M increase for the entire year over 2015.  All of this would seem to spell doom for most digital publishers (think of MySpace’s swan song), but there’s another side to the Twitter story.  From a social relevancy stand point Twitter has never been hotter.  Donald Trump is obviously a big reason for this, but so are countless other celebs and politicos who use Twitter as their megaphone to the reach tweet-heads.  Thus the paradox . . . Twitter continues to stay in the forefront of the cultural zeitgeist, but can’t make a buck and isn’t attracting enough new users to the platform.  To frame out both sides of the issue I’m including links from both AdWeek and NY Times.  How this plays out is anyone’s guess.  (link1)  (link2)

Have a great Friday (and weekend) guys!

STREAMING SUBS GOING WORLDWIDE:  As the subscription side of streaming becomes more competitive, industry insiders are starting to look at aggregated subscription totals across the world to see if the market is still in high growth mode or if it’s starting to mature.  Right now the total number of worldwide subs is estimated between 100-105M.  The research firm Midia is calling for a repeat year of explosive growth in 2017 by forecasting another 40M subs to be added just this year.  Then the market’s growth is expected to decelerate as streaming subscriptions saturate the more tech savvy countries.  Conventional wisdom says the US could eventually see a peak of 20% of music listeners buying a streaming subscription.  Right now the US penetration is still well under 10% (excluding Satellite subs), so it feels like there’s still plenty of room to grow.  This will be an important trend to watch over the next few years.  (link)

RADIO’S DIGITAL REV COMES TO MAIN STREET:  Here’s an interesting look inside the state of Digital as a revenue channel within Local Radio.  Overall there’s positive momentum with the average market-level radio cluster now billing over $1M annually in Digital rev, which is +12% YoY.  This growth rate is similar to what we’re seeing in the entire digital industry as local clients start to embrace digital marketing tools once reserved only for the bigger national clients.  The only caveat to these numbers is that radio sales departments are famous for moving peas around the plate to make it look like they’re achieving new strategic initiatives.  So some of this Digital increase could actually be the old “shave five bucks from the spot rate and book it as digital” play.  That might explain why the Digital side of the house is showing strong growth while the Spot side continues to decline.  (link)

CRAP IS THE NEW TRANSPARENCY?:  I know that may sound like a funny title, but it’s the message Publicis Strategy & Growth Office Rishad Tobaccowala delivered in a keynote address at a 4As summit this week.  His comments echoed those of P&G’s Marc Pritchard, with the point that improvements in digital media need to start with supply chain transparency but then must be completed with quality data.  To that end weeding out crap data partners is his team’s primary goal in 2017.  Mr. Tobacccowala’s comments on the state of the industry are pretty cutting, as you can see in the quote below.  I’ll let you read the article and decide for yourself if “Crap” should be the ANA’s marketing word of the year for 2017.  (link)

Have a great Thursday guys!

YOU NEVER GET A SECOND CHANCE TO MAKE A FIRST IMPRESSION:  That saying is so true, and it perfectly explains why artists and labels in the music industry have such an outdated opinion of Pandora.  It’s like their POV is frozen in the prehistoric amber of 2007, when digital music streaming was just getting started.  Yes, Pandora created the market back then and had a substantial first mover advantage.  But the product capabilities from a decade ago are a fraction of today’s Pandora.  The only problem is that the music community’s perception hasn’t evolved along with the product.  That’s why the attached Rapzilla link is so important.  It lays out five compelling reasons why artists and labels alike need to update their thinking and give the mighty P a fresh look!  (link)

DIGITAL TV RATINGS GET MRC’D:  Yesterday Nielsen announced a step towards full-spectrum video ratings measurement with MRC accreditation of its Digital TV Measurement product.  This is a positive development for Nielsen, but it’s important to understand what this is and what it isn’t.  On a macro level Nielsen is attempting to roll out its Total Content Ratings (TCR) platform, which would create apples-to-apples ratings for video ads running on TV stations and Digital publishers alike.  To achieve this TCR needs to merge two sets of data – Digital TV Measurement (which was just approved by the MRC), and Digital Ad Ratings which still doesn’t have MRC accreditation.  Admittedly the Digital Ad Ratings half of the equation is the newer/harder part for Nielsen to deliver, so they still have a big hurdle to clear.  But at least progress is being made on full-spectrum TV measurement.  Now where’s the progress on unifying audio measurement, Nielsen?!?  (link)

STREAMING REV HITS CRITICAL MASS:   Over the past year we’ve watched streaming royalties become a larger and larger slice of the major labels’ revenue pie.  Now Warner is the first label to reach the tipping point where almost half (48%) of its revenue comes from digital music.  And over 80% of digital revenue comes from streaming royalties instead of download sales.  This is occurring because streaming royalties continue to surge – up another 28% YoY.  By comparison all other forms of Warner’s revenue are either flat or down slightly, making Streaming the most essential part of the labels’ revenue strategy now and for the foreseeable future.  (link)

RETAIL MEGA-MERGER?:  This last article caught my eye since it’s so unusual but such an interesting idea.  Is it feasible that Amazon could merge with Macy’s or any other large national retailer for that matter?  The author of the attached Business Insider article lays out some compelling reasons why a match like this could be very complimentary to both parties.  As noted in the article, there doesn’t appear to be active discussions happening between Amazon and Macy’s, so this is probably just a what if.  But it’s still an interesting theory to noodle on.  (link)

Have a great Wednesday guys!

THE YEAR OF AUDIO: Last week MediaPost ran the following interview piece with Pandora’s CRO John Trimble. Since then it’s received a ton of secondary press pickup, so I thought it was worth circulating.   The main takeaway from the article is the emergence of Audio as the ultimate disruptive ad unit in a world where screen-less connected devices are proliferating. This is especially relevant for marketers given that time spent on audio-based platforms, like music and podcasting, is usually in much longer sessions than video or social sites. This extended time spent equates to consumer engagement, which allows marketers to break through the digital clutter, tell their brands’ stories, and actually create a meaningful relationship with existing or soon to be customers. This makes Audio a potent marketing weapon whose time has come. (link)

APPLE POACHING THEIR WAY INTO THE MUSIC BIZ?: After last week’s Apple earnings call I made the comment that it appeared as if Apple was a bunch of tech heads trying to run a music business without much appreciation for the nuances of the industry. Well maybe somebody in Cupertino read my blog, because they just announced the poaching of Spotify’s head of Label Relations to handle the same duties for them. As anyone in the streaming audio space knows, the legacy ecosystem of artists/songwriters/labels/broadcasters/streamers/CRB is a very hard spider web to understand, much less run a business within. Maybe Apple is finally waking up to that fact after years of unsuccessful streaming attempts. (link)

NOT SO SUPER ADS: Now that the entire marketing universe has had a chance to catch its breath from Sunday night’s Super Bowl it’s time to assess and grade this year’s commercials. AdWeek has done a nice job of compiling the ads by quarter, along with a thumbs up/down assessment. Overall the vibe on this year’s ads was a little “deflated”, with no brands achieving a knock it out of the park effect. There was some decent use of comedy (Skittles, T-Mobile), themes of inclusiveness (AirBNB, Coke), and even commentary on today’s political environment (Budweiser, 84 Lumber). But for once the game itself stole the show, and the commercials stayed in background. With that said, at an average of $5M per :30, it makes you wonder if the Super Bowl is still the best place to get your ROAS anymore. (link)

HOW THE BIG GAME AFFECTED MOBILE USAGE: And for some bonus coverage today, I thought it would be interesting to show you how smartphones were being used (or not used) during the big game. Apparently there was a ton of app-based food orders just before the game, everybody was actually watching Lady Gaga’s halftime show instead of tweeting about it, and most of the US population was using Uber or Lyft to get back home after the game. Interesting stuff. (link)

Have a great Tuesday guys!

IP-UH-O:   Remember these words from a blog I posted in December’16, “If Spotify doesn’t complete a successful IPO in 2017 their business will be in trouble”.  Well it looks like storm clouds are on the horizon, as industry insiders are already starting to speculate that an IPO may now be pushed to 2018.  At the heart of the delay is Spotify’s inability to consummate long-term licensing deals with the major labels – for the past year they’ve been going month to month with the expired deals.  Without a secure and predictable licensing framework investors will be less likely to buy into an IPO, which could cause the delay.  On the other side of the problem is Spotify’s debt, which is speculated to be over $1B, and an annual cash burn rate of $200-300M.  And as icing on the cake, the most recent loans Spotify took out require that they offer huge discounts on the stock price to those investors when they do get to an IPO.  This clause makes investing in the IPO even less attractive for new investors who won’t get these discounts.  With limited funding options and growing debt it feels like Spotify is getting boxed into a dilemma of their own making.  (link)

FACEBOOK TV?:  The lines between traditional television and digital video are about to become even blurrier with Mark Zuckerberg’s announcement that he wants FB to get into the video content game.  This makes me wonder if last Monday’s announcement that FB is now partnering with Nielsen to be included in their Digital Ad Ratings measurement is the setup move to eventually have TV-style ratings for their own programming.  Other digital publishers like Netflix, Amazon, and Hulu already produce their own content, so this isn’t some crazy concept.  But to date there haven’t been examples of Social platforms also becoming video content hubs.  If Mr. Zuckerberg has his way, people won’t just go the FB to talk about shows they’re binging on, they’re actually watch the shows there too.  (link)

TRANSPARENCY “CALL TO ARMS”:  As I predicted last Tuesday, the digital media industry is already starting to feel the reverberations from P&G CMO Marc Pritchard’s challenge to the industry to clean up its act.  Other clients and agencies are starting to use the same language – emphasizing requirements like proving viewability and audience verification tagging.  Interestingly, this trend could impact the opposite ends of the industry in the same way.  On the top end, the duopoly of Facebook and Google are already feeling pressure to tear down their walled gardens of self-measurement.  And on the other side of the spectrum junked up ad networks will be forced to either provide transparency on ad/audience deliverables or be bounced off future buys.  Feels like snowball starting to roll down the top of a hill . . . lookout for the avalanche below!  (link)

Have a great Monday guys!

WHAT YOU’RE LISTENING TO IN YOUR HOME:  As we enter the age of the connected home, with digital content running through IoT platforms, we can start to see a profile of audio streaming consumption in the home.  A first example of this is the digital audio usage on Amazon Echo.  Pandora is the far and away the leader in listening on Echo with 43% of total consumption, followed by iHeart with 36%.  One of the biggest surprises is that Amazon Music only accounted for 13% of streaming on their own platform – so much for that ecosystem play!  And Spotify rounded up the field with paltry 7% – guessing that teenage listeners don’t make decisions on music in the home?  Expect to see this trend continue as more and more music consumption shifts to connected devices.  (link)

RADIO MARRIAGE:  Big news from the broadcast world yesterday, as CBS Radio and Entercom announced a merger.  Last year CBS’s parent company announced the plan to spin off their radio division.  But given the no-growth outlook for the radio industry they weren’t able to find a buyer or get a high enough valuation on an IPO to make the deal work for them.  So merging with a smaller broadcaster, who desperately wanted CBS’s large market footprint, was a synergistic fit.  CBS gets to unload its radio stations (tax free!) and still retain 72% of the stock in the new combined entity, and Entercom’s CEO David Fields gets to run what will now be the #2 broadcast group in the US, behind iHeart.  There are only six overlap markets where CBS/Entercom own more than seven stations between them, so there will be minimum divestiture required to finalize the transaction.  The deal is expected to close in the back half of 2017.  (link)

PROPEL + PANDORA = POWER:  The following AdExchanger link includes a great example of the power that an integrated marketing plan can have on a brand.  The brand is Gatorade’s Propel, and the marketing campaign was executed by Pandora.  The campaign includes the perfect convergence of using audience data (fitness enthusiasts) to promote custom content (workout genre stations), and offer listeners a reward (sponsored listening), by interacting in a way that’s totally native to the workout experience (gyroscopic engagement).  In plain English, fitness enthusiasts were invited to add Propel’s workout station, and then unlock a commercial free hour of listening by shaking their smartphone several times.  All of these elements combined to create an innovative program and impressive results for Propel.  (link)

THE GREATEST COMMERCIAL EVER:  As you may be aware the Superbowl is happening this Sunday.  To mark the occasion I’d like to take you back to Superbowl XVIII on January 22, 1984.  That was the setting for Apple to run what is widely considered the greatest ad in the history of marketing.  The ad, of course, was the Orwellian themed “1984”, which promoted the launch of Apple’s new Macintosh computer on the following day.  The creative draws a perfect analogy to the book 1984, by contrasting IBM as the monopolistic status quo to Apple as the revolutionary upstart.  And the craziest thing about this ad is that it only aired one time!  The 1984 ad actually overshadowed the football game itself, and put Apple on a trajectory to eventually displace IBM as the preeminent hardware company in all of tech.  All of this from a :60 commercial airing just once.  Really shows you the power of advertising.  Here’s the YouTube link of you want to give it a watch. (link)

Have a great Friday (and weekend) everyone!

APPLE ON APPLE MUSIC:  Yesterday Apple released its Fiscal Q1 Earnings Report which included some positive words on the progress of its Apple Music platform, but with no specifics to back up their optimism.  According to Apple, their point of competitive differentiation in the digital music landscape is their combination of download and streaming offerings.  It’s true that no other pure-play streamers focus on this combination, but there’s a reason for that.  Music downloads (aka purchasing and downloading individual songs through iTunes for 99 cents each), is a dying business.  Streaming has proven that you can collect and curate music for free (Pandora) or by renting via a monthly subscription.  So the longer Apple tries to hang on to its legacy download business, the harder it will be for them to compete on the cutting edge of the streaming playing field.  It’s also interesting to hear Apple doubling down on the practice of featuring Exclusive releases, which seems to be trending out of favor with the artists and labels.  With all this in mind, it sort of feels like Apple Music is being run by tech guys, and not by music lifers who possess a passionate understanding of this business.  (link)

TRYING TO OUT SHIP AMAZON:  It looks like Walmart is blinking in its attempt to compete against Amazon Prime’s free shipping plan.  Over a year ago Walmart launched ShippingPass, which provided free shipping for online purchases to members who bought a $50/year subscription.  Shoppers didn’t warm to this because Amazon simultaneously raised the stakes by bundling other services within its $99/year Prime subscription, include video/music streaming, online photo storage, etc..  As a counter Walmart is now offering free two-day shipping for online purchases with a $35 minimum spend, with no subscription required.  This move represents one more step towards a complete commoditization of shipping, where shoppers have been trained to expect free shipping as the norm in ecommerce.  (link)

PROGRAMMATIC POP QUIZ:  Finally today, Digiday is featuring a programmatic quiz which was put together by the good folks at Havas.  I know a quiz on programmatic sounds about as fun a watching paint dry, but we need to know this stuff, right?!?  So test yourself.  I took it and got 7 out of 9 right, so I actually learned a thing or two.  The answer key is at the bottom upside down – so don’t cheat!  Lmk how you do.  (link)

Have a great Thursday guys!

FACEBOOK’S GETTING IT’S TRANSPARENCY ON: Facebook’s self-measurement woes have been well documented while they were taken to the woodshed by clients and the buying community during Q4. It looks like FB has taken that lesson to heart and moved aggressively to correct their mistakes. As noted in the following Tech Crunch article, FB announced that it’s now integrated in Nielsen’s Digital Ad Ratings platform for measurement, and ComScore for viewability verification. This is exactly the kind of third party measurement and verification which has been missing from FB’s “walled garden” approach up to now, so it’s a 180 degree pivot. It’s also worth noting another new feature – FB’s Marketing Mix Modeling (MMM) portal which will allow clients to aggregate FB’s audience data and directly compare it to competing Digital, TV, and Print outlets. Feels like FB is doubling down on transparency in order to make amends for past transgressions. (link)

SOUNDEXCHANGE’S SURPLUS: Yesterday SoundExchange announced their total 2016 royalty payouts to artists and labels at $884M, which is +15% over 2015’s payout. This is the distribution of money taken in from Pandora and any other streamers who use the US’s compulsory royalty system set in place by the CRB. While 15% YoY growth is impressive, the more interesting stat is in the second paragraph of the attached RAIN article. The number of total payees (people or entities receiving money from SoundExchange) grew by 36% in 2016 to 33,159. This means more artists than ever are jumping in to the streaming royalties pool, as it becomes the most lucrative way to monetize music content . . . even over music downloads, concert ticket sales, etc.. Heady times for SoundExchange and the streaming industry to be sure! (link)

PINTREST SAYS “ME TOO” TO SEARCH RETARGETTING: Last week Google made headlines by allowing marketers to retarget on YouTube using individuals’ search queries from Google Search. Well if imitation is the best form of flattery than Google must be on to something, because Pintrest just announced a copycat move. Beginning immediately Pintrest will start offering retargeting based on searches within its platform. The notable difference between this offering and Google’s is that Pintrest’s is all within one site, and not cross-platform. This could be helpful for Pintrest since they won’t lose scale due to users needing to search on one site, and then consume content on another, in order to create retargetable inventory. I’m guessing you’ll see this trend continue from any publisher who has any sort of search functionality on their site. (link)

Have a great Wednesday guys!