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Facebook, Amazon and the Premier League

It’s nearly time for the money-go-round… sorry, merry-go-round, that is the Premier League rights auction for seasons 2019/20-2021/22. We’ve just started the second season of the current deal where Sky and BT between them have spent £5.1bn for the current round of rights. Recall that last time around, this represented a colossal 71% increase in revenues.

That money, allied with ever-increasing overseas TV rights, fuels the UK game. But there were questions about how much further rights could increase next time around. Sky and BT represent the only “broadcasters” who are likely to bid next time around, and assuming that each is broadly happy with its lot, you wouldn’t expect rights to increase substantially.

Indeed, it seems as though the current set of rights have caused some real pain to the broadcasters. Sky has broadly speaking cut back its sports coverage, losing men’s tennis, and reducing rugby union coverage. Anecdotally, it seems that more coverage is coming from Sky’s studios rather than sending production teams to events.

One way or another, Sky has tried to avoid massive increases to consumers, although prices are going up.

So if Sky and BT are fairly maxed out, how do Premier League clubs get some big increases next time around?

Today The Guardian reports that Manchester United vice-chairman Ed Woodward says that Amazon and Facebook will get into the game.

As far as everyone is concerned, these companies bring untold wealth. They could be game-changers – pardon the pun.

Well of course Woodward would say that. And I’m sure that Amazon, Facebook, Google and Apple will run the numbers. But at over £10m a match under the current contract, they’d need a compelling case. With the possible exception of The Crown, that blows all top TV dramas out of the water in terms of costs.

A lot has been made of Amazon taking on ATP Men’s Tennis in the UK from next year. They’re paying around £10m – the same price as a single Premier League match – for a year’s worth of tennis. Sky is said to have wanted to pay less than last time around, so it was to all intents and purposes giving up on the sport. They’d already dropped their US Open coverage.

For Amazon, tennis is a bit of a trial. Perhaps it’ll get them new Prime memberships, or make current members happier. But it’s not a massive cost. It’s not a multi-billion, multi-year commitment.

That’s not to say that one of GAFA won’t buy rights, but that’s a much bigger step. And what does that really get you?

All of this is before considering whether every football-loving household in the UK has enough internet bandwidth to support a live HD (or 4K) stream.

I could be wrong. But I’m not convinced just yet.

The End of Digital Downloads?

That’ll teach me for writing this too quickly. I based this on a Digital Music News report which was published Wednesday evening UK time. A few hours later, and ReCode was reporting that Apple is planning no such thing. Of course plans change all the time, and record labels can get angry. So who knows what the truth of it was. But I think the piece stands either way.

On Sunday, after a week or so teasing the internet by turning their website to pure white and closing various accounts, Radiohead released their new album, A Moon Shaped Pool. I was able to head off to their website and buy a download instantly.

I’d given Radiohead some money – cutting out middlemen retailers as it happens – and they’d given me some files that, as long as I’m careful, will be playable for years to come.

This is essentially the same kind of transaction I’ve been conducting when I buy music, since I was a child.

But we are in the early 21st century, and it’s all about streaming. So if I hadn’t chosen to spend £9, how else could I have listened? Well, there’s Apple Music or Tidal. The new album is available to stream on both platforms.

Notably though, it’s not on Spotify.

No skin off my nose, as I don’t pay for a premium Spotify subscription, and only every rarely listen to the free service.

But if I was a different – probably younger – listener, I might be a bit miffed. Because if I have a Spotify subscription, I’m unlikely to have either an Apple Music or Tidal subscription as well. Why would you pay twice for access to the same music?

And therein lies my problem with streaming services – they don’t always deliver. Indeed, Radiohead has reportedly been removing some of their other music from Spotify as rights return from their old label to the band itself.

So in that context it was interesting to read a report that suggests that Apple will phase out digital download sales from iTunes within the next two years. The US and UK are likely to be first!

[Update: Apple has quickly denied that it is planning to stop selling downloads according to ReCode.]

The thinking is this:

  • Download sales peaked a couple of years ago and are now falling.
  • In their place is rapdily growing subscription revenue, so why maintain a dual economy?

The article also mentions some Apple specific issues around matching music incorrectly, and “orphan tracks.” Those are a bit of a red herring though since they’re software issues that Apple could quite easily solve if it really wanted to.

iTunes Song Downloads

If download sales are in decline, then why should Apple bother continuing to support them?

But look at this larger picture chart of music industry revenues:

Infographic: Rise of Digital Music Stops the Industry's Decline | Statista

While digital overtakes physical, it doesn’t show a healthy overall picture, and that’s because streaming revenues don’t make up for losses from physical and downloads. Growth is actually coming from other revenue areas.

Special offers aside, the cost to a consumer of a streaming subscription is $120/£120 pa. Yet the average amount spent by British consumers on music currently is less than £40 a year.

By removing the option to buy, Apple is banking on a good number of current downloaders stepping up to become subscribers, yet for the “average” person, that involves a 200% increase in their music spending!

Well, good luck with that.

But my main issue is the one that I started with. Music rental removes my control over my music.

  • If EMI goes out of business tomorrow, my EMI CDs are still safe.
  • If Radiohead decides it doesn’t want to be on Spotify, my Radiohead CDs and downloads remain available to me.
  • If Spotify goes bust, I still have access to my music library.
  • If Apple Music puts its subscription rates up tomorrow, and I can’t afford the new price, I can still listen to all the music I own today.

It’ll be interesting to see how the music industry reacts to this story.

Amazon Prime Music – Filling A Hole

AmazonPrime

Back over the summer, Amazon launched its Prime Music offering in the UK. Anybody who pays Amazon £79 a year, for it’s free next day delivery service, and video streaming service, now also has access to more than a million tracks and hundreds of playlists to stream via the web, Fire TV or a mobile app. I’ve been using it on and off since it launched and thought it was worth writing about.

“A million songs you say? That’s a bit rubbish compared to the 30 million that others like Spotify and Apple Music offer?”

Well it is, and it isn’t.

But I don’t think this is really competing with those services. If you are subscribing to one of them you’re paying three times what the UK average consumer is used to paying for music on that subscription alone.

When it launched, it was noticeable that music from Universal was notably missing. But Amazon has subsequently done the deal and added some of their catalogue to its Prime Music offering.

In any case, this isn’t a full service as Spotify and Apple would offer. It’s an “enough” service. You’re already paying for it if you have Amazon Prime, so it’s just a free bolt on to you as a user.

If you need some more convincing, look back at my piece explaining how the average UK consumer spends less than £40 a year on music. Spotify Premium or Apple Music are not mass market offerings. Those companies might like them to be, but in fact they mostly appeal to a subset of the universe of people who listen to music.

I’ve been intrigued to see how Amazon’s offering is developing. Two weeks ago, the new Adele album, 25, was released to fanfair of publicity and primetime TV exposure. Notably, the album is not available to stream on either Apple or Spotify’s streaming subscription services. On the other hand, another album that will likely be a big seller ahead of Christmas is Enya’s new album, Dark Sky Island. That album is available to stream on Spotify, but perhaps more interestingly, Amazon.

For the most part, Amazon’s one million tracks are slightly older fare – albums mostly having been out a year before they reach Prime streaming. There are a few other newer albums on the service too like new ones from “Jeff Lynne’s ELO” and, er, One Direction.

And then there’s this week’s big new release, A Headful of Dreams by Coldplay. That too can be streamed on Amazon. It’s also seemingly on Apple Music, but is not available to stream on Spotify (possibly because Spotify won’t offer different catalogues to premium and free users). [Update: Seemingly, Coldplay’s new album will be available on Spotify from this Friday, 11th December]

Amazon is making quite a big deal about all four, so I imagine that there’s some kind of marketing quid pro quo going on.

[A little side note here on Adele.

Some have suggested that Adele is just being greedy not making her album available on Spotify et al. She has in past spoken pretty naively about the amount of tax she pays, which doesn’t come across well when you’re a multi-millionaire. But I think she’s entirely within her rights to get people to buy her album for a tenner rather than stream it for tuppence. She is the minority of artists who have the clout to demand this, alongside the likes of Taylor Swift. Kudos to her if she can get her own way.

The other slightly daft comment I’ve heard is that this somehow forces people into “ye olde” ways of buying a CD and ripping it.

Er. No.

Yes, the CD is getting distributed in hundreds of stores, including places like Tesco Express where you wouldn’t ordinarily expect to see music, but it’ll also sell a bucket-load on Amazon, iTunes and Google Play, all of whom will let you instantly download or stream the album without you ever having to go near a shiny disc.

In any case, there are still an awful lot of people who listen to music, but don’t subscribe to a streaming music service, or even use a free one. And they buy Adele albums as her gargantuan sales show.]

Back to Amazon Music.

30 million tracks is a ridiculously large number. So is one million. That’s still a lot of music. In fact it’s a scary amount of music. That means that it’s interesting to see how much curation is coming into play with all the music services these days. Because unless you are a real “muso,” there’s nothing scarier than that empty flashing box at the top of the screen asking you what you’d like to listen to.

Most of us have no idea what to type, apart from a handful of very obvious artists.

So like Apple, Amazon has pre-populated dozens of playlists for you start with.

And when you consider that some popular radio stations play as few as 400 unique tracks across a month, you’ll understand that a million tracks is actually quite a lot of choice even when you dive down into your preferred genres of music.

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My main criticism of the service so far is accessing the music. It is true that there are perfectly functional apps for iOS and Android, with the latter not requiring you to download it from Amazon’s own store rather than Google Play as the do with the Amazon Video app. They’re functional rather than wonderful, but you get offline downloads and it merges purchased tracks with Prime Music that you “add” to your library.

But curiously, if you use a Fire TV, you’re mostly limited to playlists. I’ve yet to discover a good way to navigate around their offering, looking for individual albums within the Fire TV interface. If it’s there, it’s not intuitive.

The one thing I can’t try is listening via the Amazon Echo. Having recently had a chance to play with one a little, I’d actually love to buy one of these devices. But Amazon has yet to deign to release them outside of the US for reasons that aren’t really clear, since just about all the rest of the hardware, even their ill-fated phone, made it to the UK.

For me, the most useful aspect of Prime Music remains the automatic digital copies Amazon has of at least some of the CDs I’ve bought from it over the years. It’s not complete – indeed today, there are still plenty of new CDs that don’t come with Amazon’s AutoRip. But it at least gives me an immediate subset of my audio catalogue which can be supplemented with the Prime offering.

In the end, is this as good as the other streaming services? No, of course not. It was never designed to be. But if your household is already paying for Amazon Prime, then I can imagine a lot of people very happy to dip into Prime Music now and again.

Google and Podcasts

podcasts01

This week we heard the first news that Google is starting to get into the podcast game. Recode had the first decent report on the move.

Currently, Apple dominates podcasts. Indeed, the word “podcast” might seem to imply to casual listener, that listening to a podcast means having an actual “iPod” to listen to them on. It doesn’t, although Apple’s inclusion of podcasts into iTunes fairly early on gave the medium a massive boost. At a time when you had to sync your mp3 player with some software on a PC, podcasting was technically complicated business. Tying it into the same system that got your music on your portable audio device was a smart move by Apple.

But in a mobile world with WiFi networks and 4G, podcasting should have become simpler. Apple spun out its Podcasts app, and a myriad of apps appeared on Android devices.

So why then are podcasts listened to on mobile devices still so heavily skewed towards Apple? It’s reported that Libsyn-hosted podcasts see more than five times as many iOS downloads as Android ones! That’s astonishing. And awful.

It’s so skewed because Apple fully supports podcasts, and when you turn on a new iPhone, you have the Podcasts app waiting to go. You can browse easily within the app for something to listen to, and when podcasts you might have caught because someone shared a link on social media, suggest you subscribe, they invariably mention that this podcast can be found in iTunes – where you can leave a review!

And so it becomes self-fulfilling. Indeed, too many people continue to believe that if they’ve got their podcasts in iTunes, then a simple link to that page is all they need to share. (See also my Top Tips for Podcasters.)

Yet while all of this is going on, there are more Android handset owners than iPhone owners in pretty much every market. Way more.

Podcasters are missing out. More to the point, they’re missing the opportunity to more than double their audience. But it’s not their fault. There’s just an in-built bias towards Apple in the podcasting ecosystem.

If we assume that an Android user is no more or less interested in audio than an iPhone user, then that leaves a lot of low hanging fruit ready to be picked. I’ve written about this in the past as The Android Problem. Yes, I know that iOS users buy more games and spend more money per device – maybe their more engaged with smartphones overall. But that doesn’t account for those massive discrepancies.

Earlier this year when I last wrote that piece, I was hoping that Google would get into this game, because podcasts are the obvious part of the iTunes store that the Google Play store is missing.

But what Google is talking about, as far as I can see, is something a bit different to Apple. Apple essentially allows anyone to place their podcast on iTunes. You complete a form, upload some graphics and meta data, find a host to serve your podcast and you’re away. If you have a podcast, you have to place it on iTunes.

podcasts03

But Google looks like it’s suggesting something a little beyond this. Yes, they want podcasters to upload their wares. And yes, they say that you’ll be able to search for and browse for podcasts by category – the same ones as Apple. But from what they’re talking about in their blog piece, they also want to automatically recommend appropriate podcasts – which sounds a little more like services such as Stitcher.

Since Google bought Songza, they’ve been implementing smart technologies to deliver music appropriate to the time of day and what you’re doing. Initially this was solely available in the paid-for Google Play Music subscription offering, but in the US, there’s now also a free version of this, with advertising support and limitations on how much music you can skip. (Regular readers may recall that as a UK listener, I was tortured with getting access to this, and then losing it for several weeks!)

Incorporating podcasts into this sort of thing is interesting, and listening to Google Play Music product manager Elias Roman on The Feed, it’s clear that this is a major part of what they want to offer. Indeed, it’s worth noting that as well as Android, there will be iOS and web apps to enable wide adoption of what they’re planning.

But at the moment, there’s nothing to actually listen to, and in any case, only US podcasters seem able to upload their podcasts to the site. I understand that a service that’s potentially supported by advertising may want to launch on a regional basis, but whisper it: Americans do listen to podcasts from outside America too!

podcasts02

Google also seems to pushing very hard the fact that their app – presumably Google Music – will be the default pre-installed way to listen to Podcasts.

Anyway, this all leaves lots of unanswered questions:

1. When will anyone be able to upload a podcast to Google, regardless of geography? At the moment the site geo-blocks non-US uploaders. Even if the service isn’t available outside the US, it’d be nice to be able to get international podcasts hosted there!

2. Will podcasts in Google Play be essentially open to all as with Apple, or is Google looking for premium suppliers only? It would seem to be the former.

3. Advertising – how will it work, if at all, and what might I earn? The US-only free Google Play Music service is ad-supported. There’s obviously a revenue-sharing operation currently working with music rights holders. I assume that’s why this whole thing is limited to the US at the moment as it’s the advertising market Google is most comfortable with. But what kind of deals will be on the table for podcasters, if any? Who can earn what? And in the longer term, what if anything will that mean for podcasts and podcast networks that already have very profitable ad operations? I note that the likes of Panoply and Gimlet are already on board with Google, and they are already ad-supported. The episode of The Feed I mentioned above is well worth a listen because a lot of basic questions are answered, but advertising was not – aside from the fact that Google will not be dicing or slicing your podcast or removing adverts already embedded into your podcasts. [See my follow-up post for more on this]

4. What does this all mean for other podcast app providers on Android? Is Google effectively killing them off? Do the likes of PocketCasts or Doggcatcher have enough points of difference to keep going? iOS has other podcast providers – PocketCasts is one of them. Will I be able to directly subscribe to a podcast in PocketCasts from Google Play – in the same way that I get to choose my choice for apps like browsers and music players. It doesn’t sound like it’ll work that way.

5. Are we going to end up in a messy world of platform exclusives? Let’s hope not.

6. Might this pave the way for better metrics? I think this is critically important from an advertising and accountability perspective. Google says that it will be taking a copy of your podcast from your feed, re-encoding it themselves, and then hosting it for listeners. That means that your metrics will come from Google, and at this point that sounds like a basic play count a la YouTube. What Google is talking about doing is different to iTunes. Apple does not host your podcast – you sort out your hosting requirements yourself – perhaps with a specialist like Libsyn. That provider may well offer a measurement service so you can see detailed statistics on your podcasts’ performance. Now Stitcher also caches a local copy of podcasts, but I understand that it pings your feed so that your host’s stats are broadly correct tallying Sticher plays with wider downloads (Stitcher also has a bespoke stats platform you can view). Will Google do this? I must admit, that I don’t know what happens with TuneIn, and whether it caches a copy or just redirects to your host. And there are a myriad of other places of varying scales. Some hosts provide some of this, taking account of duplicated and failed attempts to download. But if podcasts are held in multiple systems with multiple sets of metrics, coming to a cumulative picture of your podcast’s performance becomes hard. Every podcast provider would love to be able to determine whether just because a podcast was downloaded, was it actually listened to, and was it listened all the way through? That really helps support advertising. Google could potentially supply that information back to podcasters as it does to YouTube creators via their analytics platform.

7. How will Apple react? In some respects, they’ve never really developed podcasting beyond separating the app out of their overall music player. Will they be incorporating podcasts into their Apple Music offering?

There are just some of my initial questions.

Further down the line, it’ll be really important to see how Google promotes the very existence of podcasts in its software. This is how consumers can be motivated to at least try podcasts and see if they’re something they find interesting. I still have a feeling that Google needs to work hard to promote Google Play much more – particularly its Music offering which is where podcasts will sit. That will be key to how successful this is.

But overall it can only be fantastic news that Google is properly supporting podcasts now.

Oh, and Google is sticking with the name “Podcast.” So no need for anyone to reinvent the terminology now.

[I wrote a follow-up post covering advertising in particular]

Apple, Spotify and a Binary Way of Selling Music

Microphone in Studio 2

Apple Music is now up and running. If you have an iPhone, you’ll be pestered to update your device, and a new Music app will appear that on first open is desperate to give you a 90 day free trial of Apple’s Spotify-like experience.

So I dusted off an iPod Touch (mainly bought to use Lightroom Mobile when there was no sign of an Android version), and updated last night to see what the fuss was about. But I didn’t bother with the free subscription because I’m old. I already own lots of music – far more than I actually listen to. So I don’t feel the need to invest in a paid subscription music service.

Beats 1 seemed to work fine when I tuned in. But I tuned out again pretty quickly because, well, it’s not really up my street musically. Their exclusive upcoming Eminem interview is not really something I’m likely to tune in for.

But the station worked, which was more than could be said for all the other “stations” I was presented with. Perhaps they didn’t work because I’m not a subscriber? Or perhaps because it was day one, and there are some bugs to fix?

The BBC World Service – seemingly the only non-Apple station on the service at launch – did work though. So in practice I was presented with a choice of either Beats 1 or the World Service. I confidently predict a surge in World Service streamed listening! (Disclaimer: I’m working alongside the team that did this deal. Radio folk – I bet you’re jealous that your stations aren’t there!)

The question then is, what impact will Apple have on other people’s music usage? Will they tempt new users or bring Spotify users across? How invested are they in their playlists? Or do you want to hear an exclusive new Pharrell song? (So good you can only get it there, or just a particular live version?)

No sooner had Apple announced it’s Music proposition a few weeks ago, than Spotify responded with new record figures.

In a blog post, it reported that it now has 20 million paying subscribers globally up from 10 million a year ago. And it also now has 75 million active users – defined as those who’ve used the service in the past 30 days.

Those would seem to be some very solid growth figures. But although all 20 million are paying customers, it’s not clear that they’re all paying £9.99/$9.99, and whether they’re doing so directly out of choice. It’s quite a big step to hand over £120/$120 a year for music, even if it’s in small “insignificant” monthly payments.

It’s notable, for example, that various mobile carriers around the world are bundling Spotify into their offerings.

In the UK Vodafone offers Spotify on some of its packages, in the Phillipines Globe Telecom offers it with some tariffs, while in Hungary Maygar Telecom offers it. Of course Spotify isn’t alone in doing these kinds of deals. I first used Deezer via an Orange tie-up for example.

The problem is that these are not necessarily permanent offers. Telecoms operators provide them for a while as marketing initiatives, but can quite as easily switch to something else. Orange became EE, and I no longer have Deezer. That has the potential for seeing premium subscriptions fall in the future if operators choose different marketing initiatives to attract and retain customers. Alternatively, telecoms groups will be able to drive down prices because the streaming companies need them to keep paying customer numbers up, more than vice versa. I suspect that some of the most important jobs in streaming companies like Spotify are handling relationships with mobile operators.

Spotify has also published a slightly defensive video explaining why it has a freemium model. It says that 80% of its premium customers began on its free plans, and it likens its model to music being available free on the radio, leading to music sales in record shops.

Undoubtedly the revenues that Spotify is earning are growing, and therefore so are the amounts that are being paid out to artists. (Cumulative payments to artists, incidentally, are meaningless, and we should stop looking at them. Annual revenues are the real benchmark.)

But it’s not at all clear to me that the subscription model provides a net gain for the music industry over Digital To Own (DTO – or downloads, to you and me).

While streaming revenue is growing, album and single sales are declining in value (regardless of whether in physical or digital format), and overall in 2014 there was a decline in value of the UK recorded music industry of 1.6%. And globally, industry revenues fell 0.4%.

I’ve argued before that this must largely be down to the inequal way people used to buy music, and the binary way we are being pushed into paying for it today.

Put another way, the BPI says that the average UK spend on music in the UK in 2014 was £39.52.

While averages can be dangerous, remember that this incorporates both those who spend nothing at all, and those who buy many albums a week. In essence then, a lot of people are buying perhaps the equivalent of 2-3 albums a year, and a significant minority of music fans, spend an awful lot more than that.

Or at least they used to. Here’s a thought experiment:

Think of a light music purchaser and a very heavy one.

The light music buyer used to buy perhaps the equivalent of a couple of albums a year. Maybe a few big tracks and one of the big albums in the run-up to Christmas. Maybe they spent £25 in total (£39.52 was the average remember, lots of people are spending less than this).

Today, in a convenient streaming world, they instead get Spotify Free, and put up with the limitations it offers and the adverts. This actually gives them access to much more music than they had previously when they were hearing the same few tracks or albums over and over.

But does the value of the advertising revenue Spotify hands on to labels make up for their share of what was previously £25? No, they don’t have all the convenience of mobile apps and offline listening, but these people really aren’t interested in music that much. There are a lot of them, and a shift to Spotify is a net loss.

The heavy music buyer used to spend perhaps £30 a month on music. Once upon a time they’d have been trawling the shelves on a Monday in a record shop looking at the new releases. They shifted online, but they were buying a lot. Perhaps they were driven by the music press or blogs. Those who bought physical formats had collections that spanned walls or even rooms. They were spending £360 a year!

Today, in a convenient streaming world, they instead pay £10 a month for Spotify Premium (or Apple Music) – or £120 a year. Sure they buy a handful of other albums to own, perhaps those of favourite artists. Let’s be generous and say £100 worth. But that’s still a massive shortfall: £220 instead of £360.

Indeed it’s reported that the top 10% of digital music buyers accounted for 55% of digital music spend in 2014 (Enders).

These people who are the bread and butter of the music industry – those who bought the magazines, and spent hours drifting through record shops – are now much less valuable if they shift to Spotify Premium or similar.

So even though consumption of music is probably higher than ever, with just about all recorded music at their finger-tips, the net revenues from them are less.

This is probably a bit of a simplistic model, but it explains why even though Spotify is showing solid growth, and ever increased revenues paid out to rights holders, that’s not really the whole story. (Inicentally, if anyone has access to the more detailed BPI numbers as published in their Music Matters yearbook, I’d love to see them. But not enough to pay £85!)

I’m left asking the question as to why the music industry thinks that this is a good model? Or if it is, why are the prices set at the levels that they are? And the binary “free” or “pay £10/$10” doesn’t seem to allow for any nuance. Tidal might have tried quality for £20/$20 but that seems unlikely to work.

The only way the sums can stack up for the music industry is if Apple or Spotify can persuade many more people to spend significantly more money on music than they’ve ever done before. They have to convert a £40 a year spender into a £120 a year spender. That’s a massive challenge in economic terms.

It’s not at all clear to me that the one-size-fits-all model works.

If it did, we’d see a lot more all-you-can-eat buffets instead of restaurants with set menus.

Apple Music

So now we finally know the details of Apple Music.

I won’t go through all the details because every site on the planet has already done so, breathlessly live-blogging the full announcement. So go elsewhere for those.

To be honest, as The Verge reports there are probably some sighs of relief around the rest of the streaming music world, because Apple hasn’t actually announced a service that’s leaps and bounds ahead of the rest of the pack.

They’ve got a streaming service, a radio service, and some kind of social media bolt on (nobody mention Ping, OK!).

And what they do have is scale. They’re launching in 100 countries all at once. I imagine, because they have gargantuan teams of lawyers who have been working those deals. Other services like Spotify have had to launch market by market. Even Netflix is still going country by country.

The price point for Apple Music in the US is the same as for all the competitive products – $9.99. I can’t find details of a UK price, but I imagine we can see a magic exchange rate in action and as for Spotify, expect to pay £9.99. There’s also a family plan which is innovative, although I suspect many families currently just share the same streaming subscription. And Apple is actually deigning to make an Android app, although not until the autumn.

The big play Apple has is that it will send an upgrade to all iOS devices with a no-doubt unremovable icon (or set of icons) promoting the service. Spotify et al need you to download and install their app. Apple does that bit for you.

[An aside: isn’t this sort of thing what the EU accused Microsoft of doing when it was rolling out Internet Explorer with Windows updates in an attempt to kill Netscape? They got very angry about that. I know the EU has been looking at suggestions that Apple wanted labels to limit Spotify’s free plan, but that’s somewhat different.]

To be honest, the most interesting part of the whole announcement seems to be Beats 1 which sounds very much like a regular radio station. Zane Lowe is the key person behind this and he will be broadcasting daily from LA with other shows coming from New York and London, live around the world (We’ll get Zane Lowe for drivetime). From what I can tell this will be an advertising-free experience.

In some respects then, another free online radio station. There are many of those already; licenced or not. But I wouldn’t underestimate the power of this station. Apple can throw more money at this project than any radio broadcaster in the world.

And it’ll be free to listen to. You won’t need to be paying for Apple Music to hear it. With big music acts doing exclusive things on the station, I imagine that this will be the free-entry point into the service. Something to persuade you to subscribe.

Of course it probably won’t be directly competing with your station because I suspect that the music mix will be quite eclectic. But it’ll have massive credibility. And I expect that the station will allow its presenters to have their own voices. Stations that do this seem to do well (cf. Radio 2 and 6 Music).

But then it sounds very much like Beats 1 is just the first of a set of Apple branded radio stations. They certainly use the plural in their promotional material.

Here’s an interesting thing though. A big part of Apple Music is curated listening. So rather than simply rely on algorithms, an actual programmer will build playlists (Spotify and others do this too of course). Apple is spreading their net far and wide to create those playlists.

I note from Apple’s website that various music magazines and sites are building playlists. These include Q and Mojo – owned by Bauer Media. That would seem to mean that Bauer on Apple will be competing with Bauer’s own radio services for listening! I suspect that Bauer thinks being inside rather than outside is the better bet.

Earlier I wondered on Twitter whether radio stations that in the past had been massive Apple fans, had been talking about Beats 1? 6 Music did, but I’m not certain about others.

Let’s face it, stations have previously been in a rush to align themselves with Apple and announce the cool new iPhones or iPads that they’ve launched. There’s been basically little need for Apple to run radio advertising (has Apple run any radio advertising in the UK?), because stations plug the products for them free of charge. Indeed ask any promotions team and they’ll tell you that Apple products are what prize winners want to win in competitions.

So will stations be quite as keen to hand over free publicity to a device that now has a button – front and centre – that will compete with your brand? Apple is now a well-funded competitor.

[Update: I thought this piece from The Guardian was well worth linking to, with some really interesting numbers. In particular the fact that the average consumer is not going to be spending £120 a year on music when they currently pay just £40. Sure, some people will. But most people just aren’t into music to that extent.]

Podcasts: The Android Problem

Podcasting

A piece on Digiday examines the undeniable fact that listening to podcasts is heavily skewed towards Apple’s products, despite there being significantly more Android devices in the market.

Now we know that not all things are equal: iPhone owners spend more on average – probably not surprising because they tend to be more expensive devices, meaning that their owners are generally richer.

But by and large, podcasts are free, so what is there to explain the difference?

Well many podcasts are aimed at a more middle-class listener – someone, again, who’s likely to own an iPhone. But I’m not going to tar every podcast on the planet with the “middle class” brush. In any case “middle class” means different things to different people. So that’s not the answer.

No, it’s clearly the case that a 360 degree ecosystem like Apple’s, means that it’s easier for their users to enjoy podcasts. The iTunes Store kickstarted podcasts, and their very name implies that you need an iPod (or iPhone) to listen.

Consider this: listen to the average US podcast, and in the bit at the end where they urge you to subscribe, or review the podcast (sensible – you might be listening to a stream that someone has shared), they only ever talk about iTunes:

“Find on us in the iTunes Store”; “Rate us in iTunes”; “Give us a review.”

The best you might get is something like, “or listen to us via your favourite podcasting app.” Stitcher might be the only non-Apple brand that gets regularly mentioned.

While there are non-Apple podcasting apps available in iOS, their usage probably pales into insignificance compared to the default app. A bit like default email apps or browsers, users mightn’t even be aware that there are choices. Perhaps only hardcore podcast listeners seeking some significant extra functionality are seeking out the third party wares.

So with Apple it’s a one stop shop. They have the store and the app installed by default. Any self-respecting podcast must appear in iTunes.

But where does that leave Android?

There’s a suggestion in the Digiday piece that Google could launch its own podcast app, making it a default part of Android. There are some benefits:

– There’d be significant discovery in the Play store. The growth in audiences of podcasts could be significant.
– Google could sell audio advertising around podcasts. They do know how to do advertising.

But there’d be disadvantages too:

– As the Digiday piece says, some podcasts that are earning as much as $50 CPMs – personalised live-read ads go a long way. Google would probably bring those prices down. Is that helpful for a burgeoning industry that has to work to arrive at its own monetisation models?
– Would inserting skippable/unskippable ads a la YouTube, mean that you had to use the Google Podcast app to listen?
– How would that work for podcasts which already have a bigger iPhone audience? Monetising only one part of the audience doesn’t work. YouTube works the same on every platform, but podcasts in their current form are simple files.
– What about the third-party app industry? Would Google’s entry dismantle it (as it largely killed the third-party RSS feed readers when Google Reader came along, only to nearly leave everyone high and dry when they later killed it)?
– Most manufacturers install their own apps/skins, so there’s not guarantee that Google’s app would be visible.

As a massive advocate of podcasts, I think Google would do well to step carefully into this arena. I’d certainly love to see podcasts incorporated into the Google Play Store. At one stroke there’d be massive discoverability, and when directing potential listeners/subscribers, podcast-makers could just say: “Go to the iTunes or Play store to subscribe/review/download.” It’s a much neater message. (Yes, I realise that this ignores Windows Phone, Blackberry, etc.)

From the store, it would simply have to prompt you to download a podcast app if you don’t already have one, or use your favourite app. The hooks are built into Android so this should be relatively painless. I’ll leave it for others to determine the most equitable way to do this with regard to the multiplicity of podcasting apps.

As for advertising? Well that’s interesting.

On the one hand, it’d certainly help grow the online ad audio advertising market if Google was to enter the fray. I’d envisage something similar to the YouTube model of Google selling ads, and sharing revenues with the podcast producers. And having a way to monetise podcasts has long been issue that many have had with Apple.

Then there’s the age old issue of “proof” that someone has actually heard a podcast advertisement. Advertising methodologies these days have to go out of the way to prove that a consumer really experienced the ad; they didn’t fast-forward at 30x speed or whatever. Plus there could be visual elements to those ads on device screens as Absolute Radio does with its InStream proposition. Google could provide a solution to this, demonstrating that the ads were listened to, and weren’t just backed up on a phone’s micro SD card, unlistened to.

But by no means would all want to take part. If you’ve developed a valuable way to monetise your podcasts – Slate springs to mind – then it’d up to you to choose to adopt it. Furthermore, it’d be odd if I didn’t get ads listening on iOS because Apple doesn’t support them, but I do on Android (I realise that these kinds of inequalities do happen in the two ecosystems). And we’re seeing elsewhere, some apps offering “exclusive” podcasts. The financial models are manyfold. So it’s not clear to me how it could work technically across multiple platforms without creating some new kind of “Podcast v2” technology.

Furthermore, let’s not forget that many podcasts are actually streamed directly from websites. Does everyone switch to Google’s player to incorporate their advertising? Podcasts are versatile and that’s one of their strengths.

Then you have podcasts that either work on a paid subscription basis, or offer extra backer-only recordings for those who contribute. How do you work with these? (To be fair, no two set of people seem to do this the same anyway, and it’s always a bit of a technical hurdle).

In general, I think making podcasts “easier” is essential for their future. But I’ve never seen a clear way to do it. I’m not certain that fragmenting the market is the way to go.

Adding a podcast section to the Google Play Store would seem to be the first thing to do.

However I can’t see Google “just” doing that. Shipping a generic app and creating a new ad market? Well that’s a bit more complicated.

Podcast Numbers – Does Serial Tell Us Anything?

In a world where there are so many metrics available, there’s often a curious shortage of figures in some parts of the tech industry where you’d like there to be. Amazon won’t tell you how many Kindles its sold. Netflix won’t say how many episodes of House of Cards it has streamed. And so on.

So it’s interesting to read today that Apple has said that it has delivered over 5m downloads or streams of Serial so far. This is the fastest ever podcast to reach that number. But what does that really say?

Well so far there have been 8 episodes of Serial, so if everyone who used iTunes to listen to Serial, dutifully listened to each episode, that’d mean 625,000 downloads of each episode.

In reality, I suspect that the first episode has been delivered more than any other. Despite it being “the Breaking Bad of radio,” not everyone will get on with it and might drop out after a handful of episodes.

Here’s a possible breakdown of listening by episode based on nothing more than random guesswork taking that thesis into account:

One way or another, I expect the chart would look more like this than a fist line.

This does of course ignore the fact that once subscribed, you might not unsubscribe and just ignore podcasts piling up on your device. They still get credited as a download.

But unfortunately, in the scheme of things, we don’t really know what this all means. While Serial has been sitting at the top of the US and UK iTunes podcast chart for the last couple of months, that doesn’t really tell you anything.

iTunes tries to keep its podcast charts dynamic. If it didn’t, then the top performers would fill the slots repeatedly. So it’s never a question of just how many podcasts have been downloaded over a given time period, but they inject some secret sauce into their formula that almost certainly looks at the rate of growth of a particular podcast, and factor that in too.

And it’s important to note that not all podcasts are delivered via iTunes. You can stream many podcasts direct from the websites of those podcasts, and if you’re using a phone – particularly a non-iPhone – there are any number of podcast apps that you might use to download your listening. Stitcher is one popular one. I currently use Pocket Casts on Android for my own listening. But there are many others.

Depending on your own set-up, if you have your own podcast, you might be able to get your analytics software to determine where your audience is coming from. iTunes is almost certainly the biggest single delivery mechanism, but others are important too, even if cumulatively.

But how does your podcast compare with others out there? Well that’s where you run into difficulties. Certainly you can look at the iTunes podcast charts, but they’re flawed as I’ve mentioned.

Now however, you can look to see whether your last eight podcasts have delivered 5 million downloads or streams via iTunes. If they have then congratulations – your podcast is as big as Serial. Why haven’t I read about it in the weekend broadsheet press?

And if your last eight podcasts were delivered 50,000 times in total by iTunes, then congratulations – your podcasts is 1% the size Serial. We do at least have a comparator!

Payments and Data

When Tesco first introduced its Clubcard in 1995, it was to enable it to capture data on its customers. Most people who use loyalty cards realise this. In return for the retailer being able to tie specific sales to an individual, that individual earns some kind of loyalty points.

It seems to be a win/win. As long as I’m happy giving you my information, you give me discounts or money off. I’m likely to spend more of my money with you, you learn even more about me. And so the cycle continues.

Of course many people aren’t really aware of how their Clubcard data is uesd. Dunnhumby is a wholly owned subsidiary of Tesco (it started out helping them to launch the service), and they sell data based around purchasing to anyone interested – including retail manufacturers. I might be shipping hundreds of thousands of boxes of cornflakes to Tesco each week, but I don’t know who is actually buying them. I could do a survey, but Tesco has their names and addresses!

The curious thing about the introduction of loyalty cards like the Tesco Clubcard is that retailers didn’t already know this information. Given that the vast majority of purchases made in a supermarket are with either a debit or credit card, you would think that it would be easy to maintain a list of cards used, and even in the absence of other data, they’d know that the person with your card number bought a box of cornflakes once a fortnight.

Well it turns out that some of them do track your spending patterns by card number. From a Guardian article last year:

“Waitrose and Asda also admit analysing aggregated payment card data to monitor “customer shopping patterns” (for example, items purchased) over time. Both stress this is common practice in the retail industry and that card numbers are not connected to an individual or an address. Sainsbury’s and Tesco say they do not track or monitor their customers’ payment cards.”

It’s true that they don’t know precisely who you are unless you’ve somehow furnished them with that detail – hence they still love to sign you up for a loyalty card. But there is information in your purchasing patterns, and the power of promotions etc. Even your absence from stores can be noted.

Which all takes us to what’s happening in the US and why it’s interesting at the moment. Because Apple Pay is launching over there, and it’s not being universally accepted by retailers.

There are a few things happening, and they’re related to card merchant charges and information capture.

First off, the US system of payments really needs upgrading. They don’t widely use Chip and Pin or NFC contactless payment methods. It’s mostly swiping a magnetic strip and then paying next to no attention to the signature. Cards are routinely taken away by restaurants to swipe, whereas in Europe we’re told never to let our cards out of our sight.

New schemes like Apple Pay would seem to address some of these issues. But of course it’s not as simple as that. When retailers accept cards, they have to pay for the privilege. Exactly how much they pay depends on the agreements they’ve struck with a third-party who will carry out the transactions for them. A massive retailer with many branches will do a good deal and pay relatively little. A smaller independent retailer may have to pay more. That’s why they sometimes require a minimum spend for a card to be used. The fees differ between debit and credit cards, and it’s why American Express isn’t always accepted.

Muscling in to that market to generate revenues from transactions is good for a company like Apple – and bad for incumbents. There is the small matter than iPhone 6 users are only a small subset of the market, but then we live in a world where Visa and Mastercard seem to co-exist.

Apple is cutting out the card merchant companies, and we must assume that since they regularly sell 79p/99c tracks in iTunes, they’ve done a good deal to make those transactions of value. And because you’ll be tying a single card to your phone (initially anyway), all the card suppliers want to make sure it’s their card your phone defaults to – ideally a credit card because there are fees to be made on that. Apple says that it doesn’t keep your data. But that’s not the case for others…

In the meantime, a bunch of retailers in the US are “clubbing” together to launch CurrentC, and they definitely do want to keep and share the data. In the first instance, those stores won’t accept Apple Pay. They want you to tie your NFC device – probably your phone – to your bank account, a bit like PayPal prefers you do. Then everytime you spend, the money is withdrawn directly, rather than through some kind of Visa or Mastercard network. That cuts out the card charges the merchants charge. And CurrentC definitely want to see what you’re buying. Their coalition will be able to share data with one another and provide a “Clubcard” style environment. You’d imagine they’ll incentivize consumers to use CurrentC once they launch.

You’d imagine that there will be other companies waiting in the wings with their preferred systems.

Personally, I’m not wholly sold on using my phone to pay for things. Contactless cards seem better – “card clash” notwithstanding. And I certainly won’t be participating in any scheme that collects my data like that (nope, I don’t have a Clubcard, a Nectar card or a Waitrose card). Mind you, according to this piece from Rory Cellan Jones at the BBC, even using cash, you can be tracked nowadays…

When Are Casio, Timex or Rolex Making a Smartwatch?

Not a smartwatch

Another day, another over-excited consumer goods release. Most others use trade shows. Apple does its own thing. It works for them. Fine.

I can’t comment on the phone updates as I’ve not really seen anything that interesting or novel in any phone I’ve seen announced recently. Certainly nothing to make me think that my Nexus 5 is dated (it’s only a year old, so it shouldn’t be).

But watches are an interesting area, and so far, nobody seems to have done it right.

First of all, it needs to be acknowledged that most watches are worn as jewellery of some description. Otherwise everyone would be owning cheap and functional Casios. And jewellery is very much in the eye of the beholder.

Do I prefer digital numbers of analogue hands? The Swiss or Japanese movement of a well engineered piece of marvellousness? What kind of watch looks good on my wrist? For some, it’s a chunky diver’s watch; for others the slim minimalism of small ladies’ watch.

And all of these devices do one thing really well.

They tell the time.

We need to know the time because we live our lives by it. We start work, school or college at set times; have appointments to meet at set times; films to see at set times; matches to watch or play in at set times; TV shows to catch at set times (OK – we have PVRs and OTT too).

A personal timepiece isn’t just useful – it’s essential.

Now it’s true, I’m amazed at the dominance of the “slab” in phones. We used to have a phone market where some preferred the dinky minimalism of Motorola Razr, while others preferred the functionality of keyboard-touting Blackberry. Now most phones look the same – between 4 and 5 inches of flatness – and getting bigger. The last set of gloves I bought were size Large, so I can handle one of them. But a 5 inch screen can’t be right for everyone can it? We just have to “personalise” them by choosing different cases. All smartphones are basically the same.

In the world of watches though – a single device, or even two, isn’t enough.

Have you seen how many models Casio, Timex, Rolex, Omega et al offer? Hundreds! We’re not back in the Ford Model-T era when you could have any colour as long as it was black.

So there is no right answer as to which watch looks right to any individual. And it’d take a massive cultural shift to get us to all adopt a watch from just a small number of devices. It may have happened with phones, but I can’t see it with watches.

If I was Google or Apple, I’d be working with watch manufacturers – both high-end and mass-market – and getting them to embed the appropriate technology into their devices. Why on earth should a computer manufacturer be remotely good at producing jewelry? I don’t want an Apple or LG watch any more than I want Apple or LG trainers, or shirts, or jeans.

So here is what I want from a smartwatch:

– It has to be able to tell the time. At all times. Without me having to do anything to see the time.
– The date would be nice too.
– The battery needs to last at least a week, not “nearly a day”. My current Casio battery lasts about three years. That’s 26,000 hours – not just short of 24. The charging mechanism needs to be painless.
– If it has health applications like step counters and heart rate monitors, then they need to work when I’m actually exercising.
– Accelerometers and barometers are lovely.
– It must have decent battery life.
– Most of the watches I’ve seen so far seem to be doing the connectivity, and notifications, so that’s fine.
– It needs to be available in a wide range of styles. I mean really wide. Not just size A or B, with a choice of straps, but hundreds of models to suit me, my lifestyle and my personal choices.
– Did I mention the battery? That’s really important.

By the way, in case all this seems unduly negative, it shouldn’t be. I really do want a smartwatch. I think the functionality is very exciting. A watch is a convenient form factor to glance at for information. I’m not so convinced I need to interact greatly via a watch, but to read a text, get an email subject header or similar seems fine. And for monitoring health, fitness tracking and the like, a watch is essential.

But engineering the watch isn’t the hard part. Well, aside from battery life anyway.

It’s the design. And to be honest, I’d leave that to the professionals. I want to be able to walk up to a Swatch counter (no doubt in an airport), choose a watch and be offered either the iOS or Android Wear version. That should be that.

[An aside: I note that nobody expects Google or Apple to actually build consumer cars for their in-car entertainment systems Android Auto and CarPlay. You’re going to get them offered in Fords or Toyotas – ideally as an option like choosing alloy wheels or metallic paint. Even Google’s self-driving cars are retrofitted cars made by actual car manufacturers. Just because watches seem easy compared with cars, they’re not.]