Is Groupon Sliding? What That Would Mean to the Music Biz
-- Is Groupon having a difficult first quarter? If so, that would impact the venues, promoters and labels that use the service to move unsold inventory and new albums. But it may just be that other competitors are narrowing the gap. And it may be that external estimates of the privately held company are just plain wrong. In any case, the financial health of Groupon and the long-term viability of its business model have been a hot topic over the last week.
First came a report at TechCrunch that Groupon's U.S. revenue dropped 30% in February. Now comes a post at the blog of Yipit, a daily deal aggregator, that says Groupon's revenue in the top 20 U.S. markets has fallen 32% in March. "Already saturated with competitors, the top metros give a glimpse to how things may eventually play out everywhere," writes Yipit co-founder Jim Moran.
But TechCrunch followed on Friday with a post with what are said to be Groupon's real numbers for February: $103 million, about 67% higher than the third-party estimate TechCrunch posted earlier in the week. About 60% of the company's revenues are said to come from the U.S. and the other 40% is international revenue.
Back at Yipit are some interesting thoughts about how the group discount marketplace is quickly reshaping. Moran lays out some possible reasons Groupon could be in decline (which, as I said, may not actually be the case). One is the growth in the number of competing services, such as new daily deal offerings being sent out to the existing email lists of such companies as DailyCandy, UrbanDaddy and OpenTable. Moran also theorizes that Groupon is offering too many personalized daily deals. "Today in NYC, there are more than 20 offers to choose from. This is a big step away from the one-deal-a-day user experience that gave Groupon its early success." Finally, Moran guesses that Groupon may be maxing out its main 18-34 demographic. "Groupon's competitors may have a broader appeal as the Daily Deal universe expand beyond young singles."
What does all this mean for discounted ticket sales and digital albums? First and foremost, a single Groupon deal may not do as well as in the past. As Groupon slides and competitors gobble up its market share, the market is more fractured. And sellers will need to decide which group discount services can best reach their target demographic. Until some group discount companies merge to gain market power, there will be more options for both buyers and sellers.
Whether or not Groupon is sliding, staying even or growing, it's clear the overall group discount model is growing and attracting a lot of new entrants. That means more work on the seller's part to keep track of who's who and figure out which offers the best route to reaching new customers.
( Yipit blog)
Thumbplay Sends Ringtone Biz To SendME
-- Thumbplay has sold its ringtone business to SendMe Mobile. According to mocoNews, the company plans to announce the deal later this month. Since Clear Channel already acquired the rest of Thumbplay (for its personalized Internet radio service), this acquisition spells the end of Thumbplay as a standalone entity. Writes mocoNews, "It's not clear whether the Thumbplay brand will be retained in this portfolio or folded into the other services. But it looks like it could be the latter: the URL for Thumbplay now directly goes to a Thumbplay Music page with Clear Channel's "iheartradio" branding on it."
Is EMI's iPad App the Next Ringle?
-- Is this the next album format or the next ringle? On Thursday EMI unveiled an iPad app for Swedish House Mafia's "Until One" album . Designed and built in-house by EMI, the app has audio, video and social networking all under one roof. Like an artist's web site, the app also includes links to news and merchandise.
It may be a "21st century music product," as Forrester analyst Mark Mulligan writes. And it may indeed show that EMI is thinking about new ways to deliver an immersive experience to fans. But one has to wonder: Is there any demand?
EMI's drive to experiment with new mobile products is certainly commendable but is the market asking for this kind of app? In the hyper-multi-tasking age, how much potential exists for a product that keeps a user so boxed in? People clearly enjoy listening to music on the device of choice, discovering music at their web property of choice and sharing music through their social network application of choice. In contrast, album apps establish the rules - listen here, share here, discover here.
So what's actually on the "Until One" app? Aside from the nine-track album, the app comes with 150 "timeless photos" taken from a limited-edition hardback book, 15 minutes taken from a documentary on the band, two (unnamed) full length music videos and the band's Twitter and Facebook feeds.
Does the inclusion of all that content actually create value? It doesn't help that digital content is cheap and ubiquitous on the Internet these days. The value of pictures is questionable at best. And sites like YouTube are awash in Swedish House Mafia videos. And Twitter and Facebook feeds can be found online, too. And besides, the group already has a free iPhone app that was built by Mobile Roadie.
If content is so cheap, then an app must create value in the way it aggregates information. And it must deliver far more than what can be easily obtained for free elsewhere.
What's the consumer reaction thus far? In the U.S. it's not yet possible to get a sense of iPad users' impressions. Although it was released March 17, the app had not received a single user review by Friday, March 25.