Internet Radio Services Need To Separate Themselves from the Crowd
-- Upstart Internet radio service Raditaz believes Pandora's problem is "repetition and a lack of diversity," the company says at an Echo Next blog post. So it's using the Echo Nest's music intelligence platform to improve the way it delivers personalized listening experiences.

Good move. But here's the catch: Spotify, iHeartRadio and others are also powered by the Echo Nest's music intelligence platform. More are sure to follow. Already there is very little noticeable difference between the music most services play. Of course, these companies would certainly argue that differences exist between the ways services create personalized listening experiences. But from a listener's perspective they're all pretty similar. Over time, recommendation algorithm that generate playlists will advance to the point where one service's radio feature will be, more or less, indistinguishable from another.

Since switching costs are low -- you could give up one Internet radio service for another and barely miss a beat -- services that want to grab market share or grow the overall market have a few options to be competitive:

1. Create the best product. Pandora is not only the most popular Internet radio service, but it also has the best overall product for mainstream Internet radio users. Pandora is deceptively elegant and very easy to use. In addition, its mobile app set the standard for other Internet radio services to follow. Only Clear Channel's iHeartRadio comes close to Pandora's level of simplicity.

2. Offer additional or exclusive content. A catalog of 14 million songs doesn't mean much when competitors offer a similar listening experience. Some radio services have wisely added value through additional or exclusive content. Sirius XM is the only place radio listeners can find the Howard Stern Show, and it has a variety of news, talk and sports programming in addition to music channels (the fact that it's a satellite radio network is an entirely separate competitive advantage). Pandora has added exclusive live recordings. iHeartRadio has the advantage of offering both a personalized listening experience and streams of its terrestrial radio stations. Although the content is not exclusive, Internet radio service Slacker has added programming from ABC News and ESPN.

3. Find a hook. If you can't be all things to all people, try being something great to a smaller number of people. One company could offer the definitive service for social media freaks. Another could offer the best service for stay-at-home moms. There are numerous possibilities. Regardless of strategy, some Internet radio services will need to cede the mainstream users to the larger players and find other ways to get a firm toehold in the market.

4. Add features. Raditaz allows users to tweak the settings -- artist popularity, for example -- to meet their personal preferences. Slacker also allows users to fine-tune the settings. Those types of features reduce a service's simplicity but will be found attractive by a certain group of listeners who don't mind investing the additional time and effort required.
( The Echo Nest blog)

'American Idol' To Become Shazam Enabled
-- "American Idol" has become the first live TV series to become Shazam enabled. This means that viewers can use the Shazam mobile app during the broadcast to get access to such things as a list of songs from the program, buy links, Twitter feeds and video and photos at Shazam has more than 200 million users worldwide. It started as a music identification tool but is also used with television ads and programs. More recently, the company has branched out into live television through partnerships with the Super Bowl and the Grammys.
( Shazam press release)

Rumblefish Catalog Now Boasts 1 Million Songs
-- Rumblefish, a service that allows consumers and professionals to license music for their projects, now has a catalog of 1 million licensed songs. Each of the songs can be licensed for use in social video, slideshows, mashes and games via or through Rumblefish partners that include YouTube, Socialcam and Animoto. The catalog has grown with the help of licensing deals with APM Music, CD Baby and Indaba.

You may not find your favorite classic rock recording in the catalog, but the platform makes it easy to find project-appropriate music from over 100,000 artists.

"The Rumblefish catalog is now able to power large-scale consumer offerings for any type of video product, especially when combined with easy to use soundtrack search tools and excellent editorial content," Rumblefish CEO Paul Anthony said in a statement. "Professional music supervisors are seeing big benefits to the expanded music catalog for their movie, advertisement and TV show productions, as well."
( Rumblefish press release)

To Strange Battle Between Grooveshark and EMI
-- The digital music world is filled with oddities this week. After EMI sued Grooveshark and terminated their licensing contract earlier this week, Grooveshark responded by saying it had parted ways "due to EMI's currently unsustainable streaming rates and EMI's pending merger with Universal Music Group."

So I reached out to the company's publicist for further clarification. I asked how Grooveshark could walk away from its licensing agreement with EMI based on an acquisition by Universal Music Group that has yet to be approved by antitrust regulators. I also asked Grooveshark how it could terminate a contract with EMI due to "unsustainable streaming rates" when it must have willingly entered into said contract. Here's the response:

"Escape Media Group made a business decision, based on a variety of factors that are summarized in our prior statement, to end our licensing arrangement with EMI. As the matter is now shifting to a legal, rather than business, construct, we think it best to leave these issues in the hands of our attorneys."

Strange. EMI was also struck by the company's comments. "We were bemused by Grooveshark's statement following EMI's launch of legal action against them for breach of contract," the company said in a follow-up statement. "The only decision that Grooveshark has made is to stop paying artists for the music that is carried on their service."

It gets stranger. Grooveshark is defending itself in a different matter, too -- a copyright infringement lawsuit from Universal Music Group that was later joined by EMI and Sony Music Entertainment. In a strongly worded statement last December, Grooveshark said Universal's lawsuit is based "entirely on an anonymous, blatantly false Internet blog comment and Universal's gross mischaracterization of information that Grooveshark itself provided to Universal." Made in a Digital Music News post by a self-described Grooveshark employee, the comment describes an internal system for uploading tracks to Grooveshark's servers in violation of the DMCA's safe harbor rules. But nobody knows whether or not the commenter's claim is true.

Now that comment is causing some collateral damage. Grooveshark has subpoenaed Digital Music News for information related to the comment. But Digital Music News claims protection under the California Shield Law and the First Amendment and faults Escape for forcing upon it "expensive and burdensome" legal costs. "No matter to them that the potential cost and burden to me and my small company is not balanced by any legitimate need for information," says a Digital Music News response to Grooveshark's petition. It's not strange for a large music company to sue a far smaller digital music service, but it's really unusual for an even smaller company to get caught in the fight.