April 25, 2024

Media Decoder Blog: Spotify, New to Advertising, Says, ‘I’ve Got the Music in Me’

The category of digital music services is getting as crowded as CBGB was when the Ramones played. So the major competitors in the category are spending large sums on advertising campaigns that are meant to generate awareness, consideration and trial.

The newest entrant in the ad club is Spotify, which plans on Monday to start its first campaign aimed at American music lovers. Appropriately, the initial commercial in the campaign is to make its debut on a music reality competition series, “The Voice,” which is returning on Monday night on NBC for its fourth season.

The budget for the first three months of the Spotify effort in the United States, which is being aimed at consumers ages 18 to 40, is estimated at more than $10 million. The campaign, which also includes online ads in addition to commercials, is being created by Droga5 in New York, the first agency of record for Spotify.

The campaign promotes Spotify, which competes against streaming music services like Rdio, Deezer, Mog and Rhapsody, with the theme “For music.”

(What, you were expecting the ads to say, “Against music”?)

The idea is to present Spotify as the champion of music for every moment and mood, whatever the particular genre that gets someone reeling with the feeling or moving and a-grooving. To underline that, the initial commercial, which depicts the fun and energy of a giant concert, has no music whatsoever on the soundtrack.

“It’s been said that the best songs don’t give answers but instead answer questions,” a narrator begins. “So, why? Why can a song change the world?”

“Because music is a force for good, for change, for whatever,” the narrator continues as on screen a concertgoer is body-surfing above an enormous crowd. “Because we were all conceived to a 4/4 beat. Because music cannot be stopped, cannot be contained.”

“Because music makes us scream ‘Koo koo cachoo’ and mean it,” the narrator concludes. “Because music is worth fighting for. Why? Because it’s music.” The commercial ends with the words “Spotify” and “For music” on screen.

The absence of music in the commercial signals that “music is personal; it means something different to everyone,” said Erin Clift, vice president for global marketing and partnerships at the New York office of Spotify.

Globally, Spotify has more than 24 million active users, of whom more than 6 million are paid subscribers. The service began in Sweden and came to this country two years ago.

“Our initial growth was with music enthusiasts,” Ms. Clift said. “We’re looking for that next group ready to experience music in a new way,” she added, which is “a mass, mainstream audience.”

To help achieve that, the campaign depicts Spotify as “the company that gives consumers music for every one of those moments” in life that it makes a difference, Ms. Clift says, seeking to reach potential users on an emotional level.

Subsequent commercials in the campaign also try to make emotional connections through playing up the importance of music while, again, not actually playing any particular song.

In one spot, featuring a man on his daily commute who is wearing headphones, he muses, “I’m back in the place that made you and I us.” The spot declares that Spotify is “for all the songs that remind you of her.”

In another spot, young men and women dancing at a party are having so much fun that they “don’t care that it’s a Tuesday or whose apartment it is.” Spotify, according to the spot, is “for always being able to find a new beat.”

An ad intended to appear online, on display and video networks like AOL, Buzz Media and Videology, echoes the dance commercial, showing two shirtless young men and a young woman performing awkward dance steps. “Because music doesn’t judge,” the headline reads.

Below, the text reads: “Find all the songs you need to get weird. And all the rest.”

Another online ad is centered on a photograph of a young couple about to engage in what looks as if it will be a wet, sloppy kiss. “Because mixtapes still work,” the headline reads.

Below, the text reads: “Find all the songs you need to seal the deal. And all the rest.”

David Droga, creative chairman at Droga5, said the campaign, like music, is “not judgmental.”

“We’re bringing it back to the essence of what makes music great,” he added, offering a “visceral” take on how “it’s bigger than all of us.”

“It’s more than files and devices and platforms,” Mr. Droga said. “It’s about the music.” He called Spotify “a mission brand” and the campaign’s goal is “to get across their values,” he said.

There are plans for additional ads, according to Mr. Droga, in that “this is the start of a much bigger integrated campaign.”

The media planning and buying part of the campaign is being handled by the Starcom division of the Starcom MediaVest Group, which is owned by the Publicis Groupe.

Spotify has “a dual challenge, building a brand and building a business,” said Lisa Weinstein, president for global digital, data and analytics at the Starcom MediaVest Group in Chicago, who is involved in the campaign because of the digital focus of Spotify’s business.

That means Spotify needs to be concerned about consumers at the top of the marketing funnel, she added, referring to the brand image aspects of the campaign, as well as those “lower down the funnel” who are considering becoming paying subscribers.

Spotify has enjoyed “a high growth rate,” Ms. Weinstein said, “but there is still a tremendous opportunity” to grow further by taking advantage of earned media — social platforms like Twitter — and owned media like spotify.com as well as the paid media in which the campaign will appear.

Spotify is the most recent digital or e-commerce marketer to start advertising in traditional media to reach mainstream consumers. Others include Fab.com, Rdio, Viggle and Warby Parker.

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Article source: http://mediadecoder.blogs.nytimes.com/2013/03/25/spotify-new-to-advertising-says-ive-got-the-music-in-me/?partner=rss&emc=rss

Media Decoder Blog: Warner Music Owner Bets on Competing Digital Services

Len Blavatnik, the Russian-born billionaire investor who bought the Warner Music Group two years ago, has placed big bets on multiple digital music services as the streaming model grows around the world.

Digital Notes

Daily updates on the business of digital music.

Mr. Blavatnik’s holding company, Access Industries, is one of several parties investing $60 million in Daisy, a planned service by Beats Electronics, the high-end headphone company, Beats announced late Tuesday. The others are Marc Rowan of Apollo Global Management; James Packer, of Australia; and the Texas oil heir Lee M. Bass.

Daisy — still only a code name, and not confirmed as the service’s eventual brand name — will compete with Spotify, Rhapsody, Rdio and others by letting users stream millions of songs by subscription. But it is not the only such service backed by Mr. Blavatnik. In October, Access invested $130 million in Deezer, a French company that has said it wants to open in over 100 countries around the world, including the major developed markets like the United States and Western Europe and also throughout Asia, Africa and Latin America.

Beats said that Daisy — based on the technology of Mog, a struggling service that Beats bought last year — would be spun off as a separate company and introduced by the end of the year. But it has given few details about how Daisy would be distinguished from others in an increasingly crowded marketplace.

Reuters, citing anonymous sources, reported early Wednesday that Jimmy Iovine, one of the founders of Beats, had met with top Apple executives over a “potential partnership” involving Beats. A spokeswoman for Beats declined to comment on the report.

Reinventing Radio: Clear Channel Communications continues to add to its series of historic royalty deals with record companies covering Internet and terrestrial radio.

The company, which operates more than 800 radio stations, announced on Wednesday that it had made a deal with Entertainment One, an independent label and distributor, to “share revenue from digital and terrestrial radio.” The deal with Entertainment One, also known as eOne, follows others with influential independent record companies like Big Machine, the label behind Taylor Swift, and Glassnote, whose acts include the bands Mumford Sons and Phoenix.

In those deals, Clear Channel has made the move — unprecedented in American radio — of offering record companies a royalty whenever their music is played, either on the air or on Clear Channel’s Web sites and apps like iHeartRadio. In the United States, radio stations are required to pay royalties only to songwriters and music publishers, not to record companies. These deals can help Clear Channel limit its exposure to rising licensing costs for online music, which have become a headache for Internet radio services like Pandora.

Big Machine has also been a driving force for these licensing deals. In addition to its deal with Clear Channel, it has made similar arrangements with the broadcasters Entercom and Beasley, which together have about 150 stations.


Ben Sisario writes about the music industry. Follow @sisario on Twitter.

Article source: http://mediadecoder.blogs.nytimes.com/2013/03/06/warner-music-owner-bets-on-competing-digital-services/?partner=rss&emc=rss

Media Decoder Blog: Indian Music Service, Taking Page From Spotify, Goes Pro

Western music fans have no shortage of digital music services to choose from, and that abundance is spreading around the world. Apple’s iTunes is now in 119 countries, and others are racing to plant their digital flags everywhere. This week, for example, Spotify opened in Italy, Poland and Portugal, bringing its reach to 23 countries.

Digital Notes

Daily updates on the business of digital music.

But just as interesting, and in the long run perhaps as significant to competition, is the rise of services that serve regional markets intensely. One is Saavn, a Spotify-like streaming service that specializes in Indian music, and has garnered 10.5 million monthly users with advertising-supported free listening. This week it will announce that it has taken another page from Spotify’s book, by offering a premium version at $4 a month that eliminates the ads, lets users listen to songs offline and will eventually add other features like higher quality audio.

Saavn, which has offices in New York, India and Mountain View, Calif., has a catalog of 1.1 million songs in nine languages and is available in more than 200 countries, with about 70 percent of its consumption within India, said Rishi Malhotra, one of its founders. Like Spotify, iHeartRadio and other Western services, it is an official partner of Facebook. About 80 percent of its use is on mobile devices, Mr. Malhotra said, and when the premium service, Saavn Pro, is opened in March, it will at first be available only for Apple devices.

The pricing is significantly lower than Western services. “We wanted to make it globally acceptable,” said Mr. Malhotra, who is based in New York. “The $10 price point that you see from a lot of music services we use here is way out of reach from what would fly in India or a lot of other emerging markets.”

Saavn believes it can succeed in India not only through its catalog of Bollywood hits, but through technological touches that may be meaningful only to Indian listeners. One example is the ability to search for a Bollywood song based on the actor who lip-synchs it — often more memorable to fans than the “playback” singer who actually provided the voice.

If successful, Saavn Pro could give the company an advantage in India’s quickly developing digital music market, which already has a handful of streaming services, like Dhingana, as well as a strong presence in downloads from Nokia. Yet that market is still tiny for a country of India’s size and overall media spending. According to the International Federation of the Phonographic Industry, recorded music had only $141 million in trade (or wholesale) value in 2011. A recent report by Ernst Young said that music and radio combined count for only 2.4 percent of India’s media and entertainment spending, which for 2011 it estimated at $18 billion.

Part of the reason for music’s small proportion of India’s media economy is that popular music in India is dominated by the film industry. But a greater reason is piracy; the federation estimates that 55 percent of Internet users in India go to unlicensed music services on a monthly basis. That is slowly starting to change, music executives say, as courts there crack down on infringement and legitimate digital services proliferate. Apple’s iTunes opened there in December, and Nokia says it sells 1.4 million songs a day at its download store in India.

And Indian record companies are approaching digital business without the baggage that has been complicating deals with Western labels and services for more than a decade, Mr. Malhotra added.

“The labels in India are not reluctant about digital,” he said. “It’s not like they are protecting against some established, older revenue stream. It’s all found revenue for them.”


Ben Sisario writes about the music industry. Follow @sisario on Twitter.

Article source: http://mediadecoder.blogs.nytimes.com/2013/02/13/indian-music-service-taking-page-from-spotify-goes-pro/?partner=rss&emc=rss

Media Decoder Blog: With ‘Daisy,’ Beats Electronics Bets on Digital Music

Memo to Spotify: Beats Electronics is coming for you.

Beats, whose success with the Beats by Dr. Dre line of high-end headphones transformed a hobbyist niche into a huge mainstream market, has been planning its entry into the streaming music world since at least last year, when it bought the digital service, Mog.

Beats has been slow to reveal its plans, and the streaming market has been growing steadily without it. But two recently announced hires should signal to Spotify, Rhapsody and others that Beats is serious about challenging them.

On Thursday, Beats — whose founders are the hip-hop star Dr. Dre and the music executive Jimmy Iovine — announced that Ian Rogers of Topspin Media would be the chief executive of its digital service, which is code-named Daisy. Last month, a profile in The New Yorker of the musician Trent Reznor (Nine Inch Nails, “The Social Network”) revealed that he was acting as creative director.

The announcement on Thursday offered few details about what music fans (and current Mog subscribers) can expect. Daisy will be based on Mog’s technology to some degree, although executives suggested some changes, like the ability for artists to interact with their fans.

Mr. Rogers, a veteran of digital music well known by music executives and musicians alike, has been a longtime critic of existing digital music services; in 2006 he called iTunes “a spreadsheet that plays music.” On Tuesday, Mr. Iovine characterized the appeal of existing services as, “Give me your credit card, here are 12 million songs, and good luck.”

All digital services have to some degree or other been struggling with that perception. Last month, for example, Spotify introduced a number of features to help users find music on the service, like the ability to follow favorite artists and cellphone alerts for new songs.

A bigger challenge, however, is growth. Spotify has five million paying subscribers, Rhapsody about one million, and other American services are believed to be far behind. While Pandora has built a huge audience offering a free digital alternative to radio, and Sirius XM has gotten nearly 24 million paying subscribers for its version of radio, so-called on-demand services like Spotify and Rhapsody — which let consumers pick exactly what songs to listen to — have been slow to penetrate the mainstream.

Beats, however, has a major advantage in reaching everyday consumers: its headphones, which have become popular enough to be fashion accessories. The company is estimated to have more than $1 billion in sales, and says that it has nearly two-thirds of the premium headphone market. Beats headphones range from $100 earbuds to a $400 “pro” model.

Mr. Rogers, 40, got his start in the music business when the Beastie Boys spotted the fan site he had made in college, and hired him to run its Web operation. He later worked for Yahoo Music before joining Topspin, which offers online tools to musicians and record companies to help them market and sell music. (The Beastie Boys and Nine Inch Nails are two of its most prominent clients.)

“This is the gig I’ve been training for my whole career,” Mr. Rogers said.

Beats also made an investment in Topspin, which will continue with Jeremy Bellinghausen as its chief executive and Mr. Rogers as its executive chairman.


Ben Sisario writes about the music industry. Follow @sisario on Twitter.

Article source: http://mediadecoder.blogs.nytimes.com/2013/01/10/beats-electronics-poised-to-name-music-service-chief/?partner=rss&emc=rss