06/04

Thank you, Apple!

It’s hard to speculate on Apple’s “iRadio” before there’s an “iRadio” to speculate on. But one day it will be announced any day now, so here goes nothing.

Conventional wisdom says: Yikes, Apple is big! Pandora and Spotify are screwed!

Yes, Apple is a Big Fish. But companies like Pandora and Spotify already face down Google and Amazon – firms with footprints as big and broad as Apple’s. Even though their music platforms can’t compare to Apple’s their advantages are extensive in many other areas that nurture the ties these companies have with their consumers. And it’s the strength of consumer relationships combined with how well (or poorly) existing options satisfy their desires that dictate how sticky or loose those consumers may be for new services.

Think it’s only size that matters? Consider the impact Apple’s iBooks has had on Amazon’s e-book sales (by one report, Amazon now has “merely” 60% of a market that is growing fast. Thank you, Apple!) Or consider Amazon’s movies on demand and the impact that feature has had on rival Netflix (hint: Netflix’s CEO uses the term “no material impact”). Ah, the on-demand video market keeps growing. Thank you, Amazon!

Yes I know, neither Google nor Amazon have the advantage of iTunes but I wouldn’t be so quick to point that out as an advantage. Is there anyone who doesn’t consider iTunes to be, well, clunky?

Besides, shopping for music and listening to a radio-like stream are not the same thing – they address somewhat different needs, so the base of users for one doesn’t necessarily mean an equal sized base for the other, let alone a swap between them. Hey, if everything iTunes touches turned to gold then we would all be using a gold-plated service called Ping right now.

Meanwhile, there’s this thing called “the advantage of the incumbent.” It’s why we as a nation keep electing pretty much the same politicians one election after another. iRadio’s value proposition will have to be significantly richer than what one can get from Pandora or Spotify in order to dent their momentum. Maybe it will be, but I’m not so sure. Check to see if people say “I prefer iRadio over Pandora because….” and I mean real people, not people with tens of thousands of Twitter followers who blog about technology.

And then there’s the issue of simplicity. This is something Apple has historically specialized in, but the more complex Apple’s ecosystem becomes the more attractive “simple” alternatives like Pandora become. Back at ya, Apple!

Finally, some would argue that Apple is better at approving apps than making them. I turned in my Apple podcasts app for non-Apple Stitcher and never looked back.

Frankly, I think it’s quite likely that Apple’s entrance into the space enables other streaming radio outlets to grow faster than they already are.

What?! Do I mean that a big new competitor to Pandora might make Pandora bigger even faster? Why yes, yes I do.

We have not nearly exhausted the potential for online radio usage. We are still in this game’s early innings. The legitimacy that Apple brings to this space will bring lots of new consumers to the table, and they will want to sample all the wares.

Gee, I wonder what Pandora’s CTO Tom Conrad thinks about this? You can find out when I ask him in person on June 20 at hivio in San Diego (streaming live here).

If I’m right, what’s good for Apple is good for Pandora and Spotify, good for consumers, and good for advertisers who venture boldly into this new marketplace.

You know, it could even be good for radio.

Thank you, Apple!

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  • Robert Lyons

    Mark,
    Dead right on this–Apple’s entrance will ding
    Pandora stock for a while, but grow the pie. I think it’s unlikely
    iRadio will dominate–the innovators in this space are pureplays, not hardware companies (Xbox Music, anyone?)

  • http://www.markramseymedia.com Mark Ramsey

    Ah, Xbox Music – another good example!

    Thank you, Robert!

  • http://brownknowsmedia.com/ Jeff Brown

    Though not the central point of your post, I must concur Stitcher is the bomb. I’ve been a fan since 2010 and the app just keeps getting better. I can’t remember the last time I bothered to sync a podcast between devices. I think I read recently, maybe here, that Stitcher had inked a deal or two with auto manufacturers. Is that in the cards for iRadio?

  • Don Keith

    Mark, I’m with you completely…until the next-to-last sentence. How could anything that takes ears away from over-the-air radio for all those valuable quarter hours be good for the medium? If they ain’t listening to Rock 107…or more importantly if the diarykeeper or the PPM-toter ain’t listening…then it’s bad, bad, bad.

    At least as long as broadcast radio’s success or failure is based on AQH, CPP, and Tapscan rankers…

    Don Keith
    http://www.donkeith.com

  • http://www.markramseymedia.com Mark Ramsey

    I can think of a dozen ways to improve stitcher. Are you listening, stitcher? :-)
    Mark Ramsey

  • http://www.markramseymedia.com Mark Ramsey

    Because radio is online, too.

    Mark Ramsey

  • Don Keith

    OK, but if that online listening is not combined with over-the-air into some kind of number that radio salespeople understand, how does it help, even if the radio stream somehow gets increased listening because people buy the devices and are familiar with the services being offered? And that is a big “IF!” Why would a listener so equipped choose Rock 107, streaming the same 250 “classic rock hits of yesterday and today” 24 hours a day instead of a service that offers almost infinite variety that “learns” what songs that individual wants to hear across “format” boundaries…with less or no commercials?

    You know my opinion. Broadcast radio will never compete with Pandora or iRadio when it comes to serving streaming music. Not as long as they have to do multiple commercial units per hour and depend on ratings to sell their audience to advertisers. Broadcast radio has to give listeners something they can’t get on Pandora or iRadio.

    If I knew what that was, I’d sell it. But I’m not sure radio owners would be buyers. Not when phone apps, a poor-quality Internet stream, and that over-the-air signal is all they think they need to compete with technology that is fundamentally changing their business while they worry about this quarter’s stock price.

    Don

  • http://www.markramseymedia.com Mark Ramsey

    Anything that popularizes online radio will popularize those who put compelling content on it and wrap a business model around it.
    Mark Ramsey

  • Don Keith

    Bingo!

    Don

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