Rdio’s announcement Thursday that its app users can enjoy free radio shows free music is an powerful force. From YouTube, the world’s biggest jukebox, to freemium subscription services and Apple’s free-of-charge iTunes Radio, digital music services clearly see the value in free.
On Thursday, Rdio revealed that users in the United States, Canada and Australia can listen to radio stations -- powered by the Echo Nest -- on the Rdio mobile app without paying. (Rdio is available in 28 other countries.) Usage of a subscription service’s mobile app usually comes with a fee, but Rdio is giving its listeners free access to its radio service. Listeners will still have to pay for the on-demand service, and that’s clearly the point here: free radio draws more listeners and helps convert a portion of them into paying customers.
Rdio’s free mobile radio has the same goal as the freemium model that is employed by Spotify and Deezer and is in development at Rdio (and already in operation in Australia). Through its partnership with Cumulus Media, which will sell advertisements, Rdio will soon offer an advertising-supported tier of its web-based service. Again, free brings in listeners and some will turn into paying customers.
The free mobile radio tactic is also employed by Slacker, iTunes Radio, Songza and, in the United States only, Spotify. Slacker has a free option but sells subscriptions to an ad-free service ($3.99 per month) as well as an on-demand service ($9.99 per month). iTunes Radio offers a free, advertising-supported radio service that encourages track downloads and use of iTunes Match. Songza offers free, advertising-supported listening as well as a 99-cents-per week advertising-free tier called Club Songza. Spotify launched its free mobile radio service in June 2012.
There is no better example of free music than YouTube. The video service has become the world's jukebox. It gets more than one billion unique visitors per month globally. In the United States, Google sites (YouTube, more or less) had 167 million unique visitors in August, according to comScore. Not every YouTube viewer will view music content, but music accounts for nearly all of YouTube's most popular videos.
YouTube may also employ the freemium tactic. Various reports have said Google is working on a YouTube music subscription service, something separate from the Google Music Play All Access launched in the United States in May and in nine European countries in August. With its massive audience, YouTube is the perfect service to use free to attract paying customers.