SOME HONEST TALK ABOUT RADIO’S STREAMING PROBLEM:  First up today is a searing LinkedIn post from a Radio industry consultant named Mark Ramsey.  The basis for the story centers around the graphic below, which compares Triton’s ratings of the pureplay streamers to the broadcasters’ streaming services.  YoY the pureplays are up 16%, but in contrast listening to broadcast streaming is down slightly.  Mr. Ramsey bluntly calls out what’s going on when he says “Radio is not getting more important on digital platforms. It’s actually getting less important. The growth rate is not just well behind the growth in pureplay listening, consumption of broadcast radio brands online is actually shrinking.”  So why is this happening?  Mr. Ramsey’s opinion that Radio’s end goal of making its broadcast product (say the Kiss station in Tulsa, as an example) available online just isn’t good enough to win audience.  He follows by saying “. . . just because a platform distributes audio doesn’t mean consumers want your audio on it.”  Bottom line, Radio isn’t just getting beat by the technological innovation of internet streaming.  It’s also losing the content game to streamers who deliver more customized listening experiences, podcasts, playlists, etc..  This post is written by a radio insider and is meant to be a rallying cry for his industry.  To me it’s a dose of reality that the broadcasters’ attempts to go digital via streaming just aren’t good enough.

NYC GETS ITS ADVERTISING WEEK ON:  Are you ready for Adweek?  It’s Manhattan’s annual confab of marketing thinkers and media trendsetters, all coming together in an unusually steamy late-September setting.  Digiday provides a preview of what to expect in the attached link.  Not surprisingly, trust and transparency in digital media will be center stage.  And let’s not forget about the elimination of waste – expect to hear more than a few references to Restoration Hardware CEO Gary Friedman’s quickly-becoming-famous 22 Words pronouncement on the topic.  Whether you’re an Adweek newbie or a grizzled subway-hopping veteran, the event will keep you on your toes.  To get you prepped here’s a handy What’s In/Out guide for this week’s gathering.  Enjoy!

THE 40 MOST POWERFUL WOMEN:  Finally today, Fortune Magazine is out with its annual list of the 40 Most Powerful Women in business.  Despite an overall lack of diversity in the white-male geekdom of tech, there are a solid number of women from the digital sector on this list.  Led by Facebook’s Sheryl Sandberg, 5 of the top 10, and 8 of the top 40 women on this list come from a tech company.  Having female leadership in our industry is good for two reasons.  First, it provides more diversified C-suites filled with the absolute best leaders within their respective companies.  And second, today’s women in leadership positions become role models and mentors for other up and coming female managers who have the same aspirations.  I know some of you will say that true gender equality in the workplace will only happen when we stop even tracking women on a separate list from men, and that’s a fair point.  But until that day comes, the women on this list provide an inspiring and powerful set of role models for all of us!

Have a great Monday guys!

GOOGLE MAKES ITS HARDWARE PLAY:  Last Friday I reported about the possibility of Google making a full commitment to the smartphone game by acquiring Asian hardware maker HTC.  It looks like those rumors were true with yesterday’s announcement of a cooperation agreement between the two companies.  Instead of buying all of HTC, Google will be cherry picking the line by purchasing HTC’s engineering unit which worked on the original Pixel as well as their smartphone-related patent suite.  The price tag is estimated to be in the $1.1B range, which isn’t too shabby for a struggling HTC which now only claims 2% of the smartphone market.  The real loser in this transaction might end up being Apple.  With a resurgent Samsung and a potential data+device gorilla in the form of Google, Tim Cook and the gang will need to be more innovative than ever to stay at the top of the hardware space.

WHAT MAKES A LOGO MEMORABLE?:  So what goes into a good brand logo?  It should be easily recognizable, represent the intrinsic nature of the brand, and be memorable, right?  Well it turns out that third memorability aspect is easier said than done.  In a really interesting study a research company called Signs.com asked 150 people to draw 10 common brand logos from memory.  The story, and resulting artwork, are featured in the attached AdWeek link.  As you can see, the drawings are a hot mess.  We can generally recall colors and basic shapes, but the details usually escape us.  The table below summarizes the recall results from each brand – the green boxes (Ikea, Target) win on memorability, while the red boxes (Burger King, Footlocker, Starbucks) have some work to do.  If you really want to geek out on this go to the bottom of the article and roll your cursor over the company pictures.  As you’ll see, there are some really bad logo artists out there.  Enjoy!

IS AMAZON YOUR BABY’S DADDY?:  So when does the use of behavioral data cross the line into creepy?  I think a safe answer to that question might be found in the attached AdAge article.  Over the past few weeks Amazon has been erroneously sending customers alerts about purchases made within their non-existent baby registries.  As you can see by the tweet reactions, customers who weren’t expecting didn’t exactly enjoy the mistake.  So how could this  happen?  Beyond just Amazon’s predictable “tech glitch” excuse, there’s a real business in combining purchase data with algorithms to predict life stages, all the way down to an expecting mom’s due date.  Obviously Amazon was running some type of analysis here and it just went awry.  What’s even crazier is that this isn’t a new mistake.  All the way back in 2012 Target got into a mess by shipping a high-school aged girl a mom-to-be coupon pack even before her family knew she was with child.  Target figured this out based on the girl’s online purchases of unscented lotion and cotton balls which (believe or not) usually spikes during the fourth month of a pregnancy.  See, I told you this stuff was creepy!

Have a great Friday (and weekend) guys!

STREAMING CONTINUES ITS SURGE:  If there was ever any doubt about Streaming’s importance to the musical ecosystem, the following stats will seal the deal for you.  According to the RIAA, an astounding 62% of the US Music Industry’s revenue came from streaming in the first half of 2017.  What makes this number even more amazing is just one year ago streaming comprised 42% of the revenue pie – so that’s a 15% swing in just 12 months!  In the attached article RAIN gets inside the numbers.  Paid subscription revenue is driving the growth with $1.7B in revenue for the first half of the year compared to $1B in 2016.  This comports with the fact that all streaming platforms besides Pandora are focused on subs as their primary revenue driver instead of ad-supported free listening.  On the other side of the aisle ad-supported and blended paid products (like the mid-tier Pandora Plus) kicked off another $770M in rev.  Regardless of which flavor of Streaming you choose, the importance of Streaming as a revenue source to the music industry cannot be overstated.  Simply put, as Streaming goes so goes the entire US Music Industry.

STREAMING’S GAIN IS RADIO’S LOSS:  The one thing you can count on in marketing is this fact – advertising dollars will inevitably follow time spent.  So as listening migrates from AM/FM Radio to Streaming ad revenue is sure to follow.  And predictably enough, it’s happening.  According to Kagan Research in the attached Radio Ink link, Broadcast Radio will see a slight decrease (-.3%) in total revenue.  But when you dig in a little deeper you’ll see a larger structural revenue problem for Radio.  The majority of Radio’s rev is derived from on-air ads.  But according to Kagan’s forecast, broadcasters will see a $100M decrease in on-air advertising from 2016 to 2017.  To the broadcasters’ credit, they’re going the extra mile to make up the decrease with incremental digital and off-air sales.  However these efforts don’t really make up the entire gap left by the on-air decrease.  And to the question of where is Radio’s spot revenue fleeing to?  Maybe reread the previous article for your answer.

RADIO.COM’S RELAUNCH IS A YAWN:  Based on the numbers I’ve just shared, it should be no surprise that broadcasters are looking for ways to reclaim lost audience and revenue from the Streamers.  To do this they’re trying to emulate the pureplays with their own streaming apps.  The biggest of these, iHeart Radio, has been around for years.  Now in the “also ran” department comes CBS Radio’s effort with the relaunch of Radio.com.  As noted in the attached Radio Ink article, Radio.com will include a combination of on-demand music and podcast content as well as the live streams from CBS’s radio stations. (insert snore here) Besides that there’s not much innovation with this relaunch, making it a fairly blah copycat of existing streaming platforms.  I’m guessing if you’re already listening to a CBS station you might shift over to this app.  But I’m not seeing how this will draw new listeners to CBS.

Have a great Thursday guys!

A BETTER WAY TO OLV:  We all know online video is a mess right now.  Brands want their video ads viewed by a real human (crazy idea, right?), while publishers and networks alike can’t get their audiences to watch a video ad for more than a few seconds.  Then there’s the little issue of brand safety, with estimates that 30% of OLV ads are running adjacent to controversial and outright violent content.  With that as the backdrop, wouldn’t it be refreshing to be able to buy OLV from a premium publisher who guarantees your ad will be viewed and only be charged after at least 15 seconds of the ad has been seen?   This is exactly what Pandora is delivering with the debut of its new Video Plus ad unit.  As reported in the attached AdWeek exclusive, V+ provides brands the perfect vehicle to deliver their video unit in a brand-safe environment, and is priced on an enforced (aka non-backgrounded) cost per completed view basis.  Feels like the perfect solutions for brands looking for a lighted path through the murky world of OLV.

TELCO MERGER IN THE WORKS?:  About a decade ago the US Telco industry went through a phase of consolidation which took the competitive playing field from several smaller competitors down to the current Big Four – Verizon, AT&T, T-Mobile, and Sprint.  But all four were not created equal.  For a while Verizon and AT&T commanded most of the market share, while T-Mo and Sprint wrestled with one another for the scraps.  Then something interesting happened at T-Mo.  In 2013 they rebranded themselves as the “Uncarrier” under the leadership of their new CEO John Legere.  Over the last four years this strategy has inspired T-Mo to zig while the other guys zagged, with innovative features like no-charge streaming, unlimited data, and all-you-can-eat-for-one-price plans.  The results have been impressive.  In 2016 T-Mo surpassed Verizon as the #1 handset seller in the US (which correlates to in-store foot traffic and new account sign ups), and is starting to threaten for overall market share.  Now rumors are circulating that T-Mo might be in acquisition mode with the potential purchase of Sprint.  With Sprint trailing the other three, this might be a smart move for both companies.  So will Telco turn into a three horse race sooner than later?  We shall see.

UBER LAWYERS UP:  Well, you knew it was just a matter of time before something like this happened.  According to the WSJ in the attached link, a client (Uber) is now suing one of its digital agencies (Fetch Media) for breach of conduct, negligence and fraud.  Specifically, Uber alleges that Fetch deliberately misrepresented the effectiveness of the mobile ads it purchased, failed to prevent ad fraud by serving impressions to non-humans, and pocketed rebates owed to Uber.  It’s important to note that these are just allegations – there’s really no way to tell who’s right in this argument until this works itself out in court.  But the allegations themselves play like a greatest hits album of all the problems in digital media today.  The real spine shiver for all the other agencies out there is what happens if Uber prevails and gets a big settlement from Fetch?  Would that mean open season for any other disgruntled client to sue their agency over performance?  Feels like we’re about to discover a new low the already tense client-agency relationship paradigm.

Have a great Wednesday guys!

ANTI-SEMITIC AUDIENCE SEGS?!?:  Just when it looked like digital media’s controversial content woes were starting to die down comes news of some worst-case-scenario targeting capabilities on Facebook’s Audience Network.  In the attached link ProPublica explains in excruciating detail how it was able to create three different anti-Semitic audience segments using Facebook’s self-service API, run ads against these segments, even optimize within the segments, and then receive back-end performance metrics.  What makes this even worse is that FB’s system actually accelerated the process by auto-populating controversial segment names and suggested ways to expand the target audience by adding other correlating segments.  To give you an idea of how vulgar this is, ProPublica typed in something as simple as “jew h” and started getting suggestions for Hitler-related audience segments.  Then they were told they could reach more individuals by adding “second amendment” as an additional segment, because apparently there’s a strong correlation between the two groups.  Are you mildly nauseas yet?  In fairness to FB no human was involved in creating and selling these segments.  But FB needs to take responsibility for the fact that an algorithm they’ve created to monetize searches on their platform could produce something like this.  Considering that FB is one of the two biggest players in our industry, is it any wonder brands are getting fed up with digital media?

VAN HIT HELL:  If you’ve ever worked at a radio station this next article is for you.  It’s a sad yet accurate depiction of what goes on at a typical radio “remote” these days, as explained in the attached Radio Ink link.  The on-site appearance side of broadcast radio started with legitimate intentions.  Bring the DJ and the entire broadcast out of the studio to connect live with listeners.  Throw in a van, prize wheel, concert tickets and t-shirts, and you’ve got yourself a mini-attraction which could create a legitimate amount of on-site buzz.  Broadcasters understood clients would pay for these remotes as part of ad deals, so they became a core part of Radio’s sales offering.  But then the stations started doing too many appearances, so they became less special and more expensive.  To help save money live broadcasts became DJ appearances, and then DJ appearances became van hits.  Today’s van hits are about as fun as an STD test (not that I know what that’s like).  Picture a couple of disinterested millennials sitting at a table under a tent trying hard not to make eye contact with passers by.  Put this setup in front of a grocery store or bank, and you have the most boring scene in the history of entertainment.  Listeners don’t feel the excitement when they walk by, much less get in their cars and drive to one of these appearances.  What’s even worse is that local clients still feel compelled to purchase ad buys with appearances attached.  Maybe it’s just force of habit, or maybe they (like most of us), haven’t been to a station appearance lately to see how lame they really are.

IN THE YEAR 2037 . . . :  Are you ready to get your future mind blow?  Yesterday at TechCrunch’s Disrupt Conference, Russian tech mogul and futurist Yuri Milner used the pattern of the previous 10 years in tech to predict where we will be 20 years from now.  His prognostication, as reported in the attached TechCrunch link, is jaw-dropping.  As a base line consider the consumer-facing internet in 2007.  The rough valuation of the industry was $350B then, and 70% of that value was controlled by five players.  Today the industry’s value has jumped 10-fold to $3.5T (that’s “t” for trillion), with 70% of the assets still locked up by the top five industry players.  Interestingly, the actual five have changed a bit – now it’s Facebook, Google, Amazon, Alibaba and Tencent.  (And no, he didn’t forget Apple on this list, which he classifies as a device company and not an internet company.)  According to Mr. Milner in 20 years consumer facing internet companies will experience another 10x increase in value, up to $35T.  This estimate is based on the value of all goods and services we consume through the internet, which is around 6% today.  Within the next 20 years that total will jump to over 20% with some tech-nascent industries, like Healthcare for example, growing much faster.  If this forecast is even close to accurate we’ll be all be living in a digital-first economy by 2037.

Have a great Tuesday guys!

ADWEEK’S TOP DIGITAL TRENDS:  It’s been a few weeks since AdWeek gave us a Top Digital Trends summary, but they’ve more than made up for it with this week’s list.  Among the highlights are the surge in Messenger apps (#3), the growing power of Social platforms (#5), and an increase in cord cutting as consumers shift to OTT content delivery (#6).  But there were also lowlights, including digital ads being viewed for less than 2 seconds on average (#1), and an estimated 30% of online content being classified as outright violent (#7).  All of these stats paint the picture of a digital media industry in a state of constant flux as users get more savvy about what content they consume, and brands demand greater accountability about how their digital dollars are spent.

SLACKER FINALLY GETS A DANCE PARTNER:  The pureplay streamer Slacker finally has a buyer, after months of speculation about the company’s ability to stay afloat.  An LA-based company called LiveXLive has purchased Slacker for a relative pittance at $50M.  As you might remember, back in April Slacker laid off almost 50% of its workforce as rising royalties costs and a lack of revenue put them in a squeeze.  So why did LiveXLive make the investment?  According to company sources LiveXLive will utilize Slacker’s audio streaming tech to compliment its video platform to create a multi-media system for content distribution.  From a wider industry perspective the Slacker move is part of a trend towards the consolidation of stand-alone second tier streamers, as was the case with the SoundCloud acquisition by a pair of Asian investment firms back in August.  Changes like this are proving that audio streaming is a tough business with room for only a handful of top-tiered players to succeed.

APPLE IS ABOUT TO KILL THE COOKIE:  Tomorrow could go down as an inflection point in the history of digital advertising.  It’s the day Apple pushes out its new Safari browser update, which limits users’ cookie-based retargeting to just 24 hours through a new policy called Intelligent Tracking Prevention.  Why is this such a big problem?  Because the vast majority of 3^rd party publishers, ad networks and programmatic trading desks are still dependent of cookies to provide behavioral data in order to deliver ads.  So without this data Safari users become non-targetable, which isn’t very useful in today’s data-driven world.  The industry, as you might expect, is freaking out about this change.  As noted in the attached AdWeek link, six major trade organizations have published an open letter blasting Apple’s move for setting “opaque and arbitrary standards of cookie handling”.  The industry’s greatest fear is that Apple’s move could be mimicked by other browsers, which would pretty much kill cookie-based retargeting altogether.  On the other side of the coin, this would make mobile retargeting using MAIDs (Mobile Ad IDs) even more important, since cookies are non-existent in the mobile environment.  The stakes are high on all sides of this issue, so be ready to watch the ripple effects occur after tomorrow’s Safari switch over.

Have a great Monday guys!

SPOTIFY LEARNS THE HARD WAY:  There are two opposing adages in business strategy.  Either pick one thing and do it well or try to be all things to all people.  In the audio streaming-scape the comparison accurately sums up the difference between Pandora and Spotify.  Pandora is about music, period.  Which is why every strategic initiative begins around the concept of serving listeners that next great song and/or helping them discover their new favorite artist.  By contrast Spotify has tried to be all things in streaming entertainment, even if that means straying from their musical roots.  The best example of this was Spotify’s launch of a new platform for original video content in late 2015.  Yes, Spotify is still in the video production space, but you would hardly know that because it hasn’t worked.  In the attached Digiday link, Spotify’s foray into video, and the resulting missteps, are laid out in excruciating detail.  On one level this example tells you a little bit about Spotify’s disjointed internal decision making process.  Then on a deeper level it proves the point that its sometimes better to pick a hill and own it, the way Pandora does.

SHOULD TIM COOK BE LOOKING OVER HIS SHOULDER?:  Earlier this week Apple made headlines with the launch of its iPhone X model.  But that’s not what interests me about the attached Inc.com article.  What’s more intriguing is the idea of Google finally going all in as a smartphone manufacturer with the potential purchase of HTC.  This could represent a major power shift in the hardware side of the tech industry, because Apple at its core (sorry), is a device company.  So if Google, whose Android operating system already runs 86% of the smartphones worldwide , was able to compete on the device side Apple could have a major problem on their hands.  In all fairness, being a preeminent smartphone manufacturer is easier said than done.  Google has already tried and failed twice.  The first attempt was the disastrous acquisition of Motorola – have you flipped open your new Razr lately?  And more recently Google gave it a go with their own Pixel phone – I think my wife may have been the only person to actually buy a Pixel in Chicago.  But Google acquiring a proven smartphone manufacturer like HTC would be an entirely different ballgame.  It should be interesting to watch this one play out.

THE IMPORTANCE OF WORKING FOR A CAUSE:  Finally, I thought I’d leave you with a deep yet inspiring weekend read.  It’s the story of the 19^th century inventor Nikola Tesla, as told by a blogger named Cory Galbraith in the attached link.  No, Nikola Tesla was not Elon Musk’s great grandfather.  But he is the genius who invented the alternating electrical current theory which now runs our entire planet’s electrical system.  Tesla’s work was used by early 20^th century inventors like Edison and Marconi, therefore he is widely considered the original “techie”.  Yet Nikola Tesla was as much of an enigma as he was a genius.  He wasn’t concerned with money, is considered the greatest math mind to ever live, was a germaphobe, slept only two hours per night, and only had one romantic attachment in his life which was to a pigeon (reread that – I can’t make this up).  But as the saying goes, the line between genius and madness is very thin.  The reason I’m featuring the story of Nikola Tesla is because he devoted his life’s work only to helping mankind, and not for his own personal welfare.  Tesla believed that “working for a cause, not just money, provides us with a purpose.”  Makes you wonder what our world might be like today if a few more Tesla’s were running around.  (And BTW – even if you don’t read this article at least appreciate the image below.  It’s a real picture of Tesla sitting under one of his electrical arc simulators.  This would be hard to photoshop, much less invent the real thing.)  Inspirational stuff from an amazing mind!

Have a great Friday (and weekend) guys!

STREAMING . . . INSIDE THE NUMBERS:  Yesterday the research company Fluent released a comprehensive study on the state of streaming in the US.  What makes this report so interesting is that they combined all forms of audio streaming, like YouTube and GooglePlay Music, instead of just focusing on the pureplay streaming pubs.  They also went in depth on the breakout of free vs. subscription streaming, and even delved in to why listeners choose to subscribe or not.  It’s a lengthy report, so I’ll give you some of the highlights.  The younger demos are heavy streamers with 92% of Gen-Zs and 91% of Millennials listening to some form of “all in” streaming daily.  Fluent also estimates 25% of streaming listeners have a paid subscription, and provides a ranker of what percentage of the population listens to each streaming platform – image below.  This research definitely speaks to the popularity of audio streaming and helps validate the Triton and Edison numbers we regularly see.

TWITTER GETS “SIR MARTIN SLAMMED”:  There were some on-stage fireworks yesterday at the Dmexco media conference.  The source of the scrum was WPP CEO Sir Martin Sorrell’s live interview with Twitter CEO Jack Dorsey, as described in the following AdExchanger link.  Mr. Sorrell pressed Mr. Dorsey on the monetization aspect of Twitter’s business model, and he did it in a parental sort of way.  The basic line of questioning was why Twitter can’t be stronger in its ad business to compete with Google and Facebook.  WPP, like all agency holding companies, are wary of the power the Goo-FBoo duopoly now commands, and is hopeful that another publisher with global scale can become the third horse in the race.  For his part Mr. Dorsey stuck to the script by concentrating on Twitter’s positioning in the digital zeitgeist, but really didn’t address the ad platform criticism.  To me this feels more like Sir Martin’s overall challenge to the digital industry to disrupt the duopoly, and less about Twitter’s plan to turn its ad monetization around.  Regardless, it must of have been a fun show to watch unfold live in Cologne.

WHY TUESDAY WAS LIKE A HOLIDAY FOR ECOMMERCE:  You’ve probably never actually thought about this, but there’s an important difference in the way you can purchase products on Amazon vs. every other ECommerce site out there – the One Click shopping experience.  As described in the attached Digiday link, Amazon has held a patent on One Click technology since 1999, and on Tuesday that patent expired.  Besides just a convenience for shoppers One Click is an important business advantage, because to solves the “shopping cart abandonment” issue of consumers beginning to shop but then never actually completing the purchase.  And just like patent expirations in other industries, the nanosecond the patent window ends the invention is fair game for other competitors.  So what can we anticipate?  I’d expect a bum rush towards new One Click interfaces from every savvy ECommerce site out there.

Have a great Thursday guys!

EVERYTHING YOU DIDN’T KNOW ABOUT LUMASCAPES:  If you’re like me you’ve encountered and appreciated Lumascapes in your career, but never really understood who created them and why they exist at all.  It’s almost like the Lumascape Fairy came to our industry one night and left us a map to sort out our AdTech mess.  As with most things, there’s a much more ordinary story behind the Lumascape, which is superbly told in the attached Digiday link.  For starters, it didn’t come about all at once by just filliping a light switch.  Instead today’s Lumascapes began as a single powerpoint slide in a 2010 digital media presentation and iterated from there.  The inflection point for the Lumascape was the decision to replace company names with their logos.  This suddenly made getting into a Lumascape more important – kind of like a relevancy statement for your brand.  Today’s Lumascapes (image below) are a migraine-in-the-making, with so many micro-logos jammed on to one page.  But just like a Seurat painting, if you step back from the individual dots the big picture will reveal itself and tell an amazing story.  Pretty cool stuff, if you’re in to knowing where our digital media industry came from.

THE AUDIO ROAD MAP, PER PANDORA:  Yesterday Pandora CFO Naveen Chopra presented a near-term vision of the company’s strategic road map at Goldman Sachs’ annual Communicopia Conference.  Some of Mr. Chopra’s most relevant comments are highlighted in the attached RadioI Ink link.  The biggest takeaway by far is the growing importance of voice-enabled digital assistants like Amazon Echo, Google Home, and the soon-to-be Apple Homepod.  This segment is the highest user growth area of Pandora’s business today, and is being compared to the mobile explosion we all saw 4-5 years ago.  Because these products are “by definition audio devices”, there’s a huge opportunity for an audio-only play in a screenless world where display and video advertising becomes obsolete.  Mr. Chopra also touched in the connected car, which is still a dominant platform for audio consumption.  While progress is being made and in-car user growth continues to climb, the adoption curve is much slower due to the simple fact that drivers are keeping their older cars longer than ever.  Over time the connected car will heat up, but for now all eyes are on the power and potential of the connected home.

THE WINNERS AND LOSERS OF M&A-MANIA:  Finally today, I LOVE the attached TechCrunch article on the most monocle-dropping (their words) tech acquisitions over the past five years.  The most fascinating thing about these M&A bets is how brilliantly some played out (FB acquiring Instagram for $1B), while others totally flopped (Yahoo’s purchase of Tumblr for $1.1B).  As you go deeper into the slides you’ll see some amazingly big deals in the $25-75B range.  Taken as a timeline, it sort of lays out the growing value of the entire digital ecosystem, which began as a series of VC bets and turned into the primary driver of the US economy.  Fascinating stuff!

Have a great Wednesday guys!

PANDORA SPREADS THE PREMIUM LOVE THROUGH BRANDS:  Up to now streaming audio listening has been bifurcated into two experiences – either get it for free and hear ads, or buy a subscription for an ad-free experience.  But what if brands could be inserted somewhere in the middle of the landscape by offering trial subscriptions at no cost to listeners?  That’s the gist of two new partnerships being rolled out this week by Pandora.  In the first example listeners can get a free 90 day Pandora Premium gift code when they sign up for Dunkin’ Donuts’ new DD Perks loyalty program.  And not to be outdone, starting today T-Mobile will be featuring the same 90 day gift codes to Pandora Premium as part of their T-Mobile Tuesday initiative.  In both cases these brands are harnessing the power of Pandora to surprise and delight their customers with the gift of music.  Sounds like a win-win scenario to me!

APPLE GETS INTO LABEL DIRECT LICENSING:  Now that Spotify has completed licensing deals with the three major Labels it’s Apple turn to get its royalties house in order.  Bloomberg is reporting that Apple and Warner have signed a licensing contract to cover all WMG played on Apple Music.  While the terms of the deal aren’t public, it’s rumored to pay artists less per song than Spotify’s deal, but then add a rev share component for music purchased through iTunes.  This is most likely a positive deal for both sides, which should be duplicated with the other Majors – it’s rumored that the Apple/Sony negotiations have already begun.  Remember this example of a legitimate royalty framework as you read the next article . . . .

RADIO’S “THANK YOU” CAT FIGHT:  Last week Neil Portnow, the CEO of the music industry’s Recording Academy, heaved a grenade at Radio in the form of an op-ed article.  In the article Portnow remarked that not a single artist thanked Radio on stage during their acceptance speeches at this year’s Grammy awards.  He went on to deride Radio’s slipping connection with younger listeners by saying “20-somethings barely knew where the FM button was.”  So why is he blasting the broadcasters?  The real motive behind Mr. Portnow’s comments are to draw attention to the fact that AM/FM Radio (still) doesn’t pay royalties to performers and songwriters.  He correctly noted that every other form of music distribution pays their fair share, so Radio’s free ride should end.  In response  NAB Executive VP Dennis Wharton claims the spirit of Portnow’s observations are untrue since several artists thanked Radio at last week’s NAB Radio Show.  This is a pretty lame counter argument, since the Radio Show is for broadcasters only – big difference when you thank somebody privately compared to making a public announcement at something like the Grammys.  The point of this back and forth is there’s a growing rift between Radio and those who make music.  This is happening because the artists no longer see Radio as an essential promotional vehicle, and are tired of giving them free access to their songs.  Add this one to the growing list of problems for Radio.

Have a great Tuesday guys!