Direct licensing deals are somewhat rare in the world of DMCA-compliant Internet radio services. 8tracks, a quiet yet effective Internet radio service, now has a handful of them. The San Francisco-based company announced Thursday the signing of licensing deals with INgrooves, CD Baby, Dim Mak and DashGo, which cover 6.5 million songs.
"Our hope is we can continue to bring more indies into the fold," CEO Dave Porter tells Billboard, adding that "talks are progressing" for similar deals with major labels. Deals with independent content providers make sense for 8tracks. Porter says independent labels and artists represent about two-thirds of streaming on 8tracks.
While Porter wouldn't provide specific information on the financial side of the direct deals, he did say "there is a component of marketing and steering." Also a component of Pandora's licensing deal with independent rights body Merlin, steering is the process of guiding listeners to one particular group of content -- in this case the content of a direct licensee -- over other content.
The licensing deals enable a new feature called DJ Crate, a system for finding and adding songs to playlists. Until now, 8tracks playlist creators would either have to upload tracks or add tracks through an integration with SoundCloud. Now a DJ can select songs from their "crate," a collection of songs a user has liked while listening to 8tracks. Users can also add tracks to a playlists by uploading them as before.
8tracks does surprisingly well given its quiet nature. Among music streaming services, 8tracks ranks 5th -- one spot behind iHeartRadio -- in the 18-to-24 audience and 9th in total U.S. audience -- behind Bandcamp and ahead of Beats Music -- according to comScore's February numbers. Among Internet radio services it ranks a better 3rd and 4th in 18-to-24 and total audiences, respectively. Not bad for a company that has raised just under $3 million.
The service now streams 30 million hours of music each month, a 15-times increase from three years ago, says Porter. Two-thirds of listening hours come from mobile devices.
By next month, the company will have 32 employees and will have brought on board 8 salespeople since fall of 2013. Located in Manhattan's Flatiron District, the small in-house sales team enables 8tracks to offer more native advertising products such as sponsored playlists and pre-roll videos.