Fresh off of iLike's expansion into new services like Twitter, YouTube and the iPhone, the company's CEO Ali Partovi sat down to discuss the details of these new features, including whether the iLike service is designed more for artists or fans, the dissolution of its streaming music deal with Rhapsody, as well as the new initiative's importance to the future of the company.
What do artists have to do to make sure their iLike content is reflected on these other sites you're syndicating with? Is it done automatically or do artists have to embed any widgets, code, etc.?
To what degree can artists customize these iLike iPhone apps? Can they integrate your template into their existing apps or can your template accept more customized features that artists are developing on their own?
The baseline for we want to enable are the things you'd expect, like a fan being notified whenever an artists posts new concerts, photos, videos, blogs and so on. Those are the basics we're making available for any artists. We're providing look and feel customization. And there's an area we created called Puzzles and Games that needs to be customized by each artist, and something that will be implemented for a smaller number of bigger artists. Over time we intend to make that also more self-service so they can sell games or puzzles.
But if I have an app already, can I just add the iLike features to it?
The current version doesn't have a way to do that. We've talked to a few artists that have asked us about it, to do something special just for them, but over time our plan is to embrace an open strategy so you can just add things on. The majority of artists won't have the time or money to build their own iPhone app. Certainly the Trent Reznors of the world will, but we wanted to build something that's extensible for 300,000 artists that use iLike. Less than half of a percent of them would have the ambition to build their own app with additional features.
And the Premium Stats service? What's new about it that's not available under your existing metrics service?
We already for free provide a level of recording that I think is far ahead of what artists can get. If you post a bulletin or a blog on MySpace, there's no reporting that tells you how many people even saw it or clicked on the links inside it. We give you a breakdown of total number of views and clicks for anything you post, and do that through every syndication channel to the extent it's possible.
The premium package provides an even richer breakdown. It gives you a geographic breakdown. It also lets you see the correlation between the content you posted and response for fans, so we provide graphs where you can visually see on a timeline what things you've done and what the results were.
So taken as a whole, do these new features mark a change in strategy, or simply an expansion?
It's more an expansion than a change. We've always had a syndicated approach. Even when we first launched iLike.com, it came out with a companion application for iTunes. So our strategy from day one was to offer content to fans in as many places as we can. One big turning point for that was when Facebook opened up their platform. The success we saw there led us to expand to other social network platforms. This is just taking that same strategy to a new level, notably the iPhone and Twitter being the most high-profile.
It's interesting that iLike is positioned both as music resource for fans, as well as a promotional tool for artists. Which is the more important priority for you?
That's going to be hard for me to separate those. It's like which is more important, the chicken or the egg? This may seem like an arrogant analogy, but if you think about Google, the front door of Google is search and obviously it's a consumer service. But where they make all their money is in advertising, and they have Adwords. Similar to us, the ads are not just served on Google, but syndicated into a lot of different sites and services. In theory, they could separate the two and do one side and let somebody else to the other side. But each is equally important and each reinforces the other. The name iLike is a consumer brand, but at the same time the artist services are an inseparable part of that. Ultimately, our strongest thing is the artist-to-fan connection.
Is there ever any tension in those efforts? While you're helping artists get their content and information on other social networking sites like MySpace, you're also competing with MySpace for things like exclusive videos and music debuts. So how do you balance those two goals?
If we're getting an exclusive of some sort, do we want that also appearing on YouTube and MySpace and so on? We'll cross that bridge when we come to it. But our strategy decision here is we're going to opt in favor of what's best for the artist and fan. In the bigger picture, artist and fans are better off if the content is spread out to as many places as it can be. Having said that, we give the artist control and choice. Forget about any exclusivity with us. Perhaps the artist has negotiated exclusivity to someone else? We want to give the artist as much choice as possible. So our strategy has been not to get in the way of that.
How is the partnership with Rhapsody going for streaming full songs? Are you finding any resistance from iLike users to downloading new software to use the Rhapsody features?
We're phasing out the streaming part of our relationship with Rhapsody, but we've redoubled the marketing part of it. A big part of the relationship is that Rhapsody compensates iLike for referring new users to them and that part has been expanded. There's a multi-year marketing commitment.
What happened with the streaming part of it?
It was phased out over the first quarter of this year. It's been a month and a half now that it hasn't been offered on iLike. I don't think either party has seen a big change in usage patterns as a result. Our traffic has continued to grow on the same path.
Are you interested in establishing your own streaming service, or partnering with someone else?
We're always looking at what the options are to improve our service. There isn't anything being done imminently on that, but I think the licensing landscape has evolved a lot, and it continues to evolve. If and when a deal is available that can offer the best experience to our users at reasonable costs to us, we'll always be interested.
Do you think iLike would be even more valuable on Facebook if there was a corresponding full-fledged music component on the service?
It's a little tricky as to what I'm allowed to talk about. What' I'd say is that the Facebook platform has been and continues to be a great place to build a business. I have faith that Facebook will keep it that way, whether that means leaving room for a company like us to innovate on our own, or if they were to do things that they'd do it in such a way that benefits us.
Since MySpace has established it's own music service, do you view that as a greater opportunity for iLike now, or is Facebook still the primary partner due to the depth of integration?
MySpace has their own platform and the things they've opened up there work great. But they haven't opened up the way music works. So I couldn't today build an application on MySpace that streams music inside iLike using their player or licenses or playlists. Facebook doesn't offer anything like that either. The only company that offers that kind of access is imeem. Whether Facebook did it or MySpace did it, if they secured licenses and made APIs available for others to use, I think that would be opening up opportunities to innovate on it.
You're business model began solely as a transaction based one, taking a cut of every sale taking place through iLike. Is that still your primary business model?
A year ago I'd say transactions represented the bulk of our revenue. In the last six months, we've had a split between transactions, ad sales and musician services. We've already diversified across these different channels. Of those, the largest component has been direct ad sales. Going forward, it will probably remain larger than the others, but only time will tell how much money there might be in the new iPhone platform we've created. There's not a lot of data to go on to make predictions, but it could be something really exciting.