Turntable.fm's Could Go Global With New Major Licensing Deals
Turntable.fm has signed a licensing deal with EMI and is close to completing deals with Universal Music Group and Sony Music Entertainment, according to CNET. The status of discussions with Warner Music Group and independent labels or the territories covered by these deals were not mentioned.
The once-hot social music site - Billboard named it the top music startup of 2011 - has lost momentum since its debut last summer but remains one of the more innovative music services to come along in years. Since its launch the company has released an iPhone app that mirrors the web experience and signed a licensing deal with the performing rights organization ASCAP, which pays publishers for the performance of the compositions.
Turntable.fm mostly functions as a non-interactive webcaster. Listeners stand in a virtual club and face up to four DJs on a stage. The DJs select songs to play by choosing from an in-house catalog or uploading a file. The company could make an argument that Turntable.fm is DMCA-compliant, but that would only cover streaming in the United States (as the DMCA does not carry legal weight in other countries). Licensing deals with rights holders should make Turntable.fm accessible in other countries for the first time since late June. ( CNET)
BBC To (Sort Of) Compete With iTunes Store, Sell TV Shows
BBC will be the latest company to unleash a competitor to iTunes, reports paidContent. This "radical scheme" would allow customers to purchase downloads of BBC's catalog of both old and new TV shows.
This doesn't sound much like a competitor to iTunes, however. There is no chance BBC is going to build a media player for desktop and mobile devices, bake in download stores for music, apps, books and video, and tightly integrate the entire offering with the world's most popular tablet and one of its most popular smartphones. Without building an ecosystem to compete with the Apples, Amazons and Googles of the world, the BBC will be left to soak up what little demand Apple doesn't get first.
Ah, but the BBC is offering producers of its shows a greater share of revenue. Better digital margins are always an alluring offer to content producers, but Apple's 30% cut will look a lot better when the royalty statement shows up. What Apple lacks in generous revenue share it makes up for in volume. The very fact it has such high volume means it can command 30% of revenue in the first place. ( paidContent)
Pandora Banking On Mobile Ad Revenue Maturation
Pandora thinks it might have the second-largest mobile advertising revenue in the United States - behind only Google. "Total mobile revenue quadrupled versus fiscal '11, growing from approximately $25 million in fiscal '11 to over $100 million in fiscal '12," CEO Joe Kennedy said during Tuesday's earnings call. "In fact, based on recent data we've seen in an eMarketer analysis, we believed that Pandora achieved more mobile ad revenue last year than entity other than Google."
A January 2012 eMarketer report put the 2011 U.S. mobile ad spending market at $1.45 billion. A handful of other estimates put last year's mobile ad spending in the $666 million to $1.65 billion range. Using eMarketer's estimate of the market, Pandora would have about 8.9% of the U.S. mobile advertising market. Using the other estimates, its share ranges from 6% to 15%.
Mobile ad revenue is at the heart of Pandora's business. The radio business isn't about music as much as it's about selling ads around music (or talk or sports). Similarly, Pandora isn't as much a digital music company as it is an Internet advertising company that streams music. And to understand the future of Pandora, you have to look at how it generates revenue.
Pandora really needs mobile advertising to catch up with display advertising. Mobile RPM (revenue per 1,000 impressions) increased from about $13 in fiscal 2011 to over $20 in fiscal 2012, said Kennedy. Desktop RPM remained steady in the $60 to $70 range. But Kennedy thinks mobile RPMs will increase in the coming years just as desktop RPMs increased from under $20 just three years ago to $60-$70 today.
In a nutshell, Pandora thinks it will see a boost in revenue once the mobile advertising ad market matures and catches up with publishers' inventories. "We see no fundamental difference in the long-term monetization potential between the desktop and the mobile devices that now constitute the majority of our usage (roughly 70%)," said Kennedy.