“I wanted to choose a relatively unchallenged segment,” says Kurt Hanson, CEO and founder of AccuRadio. Targeting active listeners during the day, it’s a throwback to the earliest days of webcasting, before smartphone apps took over mobile internet radio and Sonos, Roku, and Apple TV streamed digital music to homes. lounges.
In December, AccuRadio ranked twelfth in the Triton Digital ranking of US digital audio networks and services, down from fourteenth a year earlier. (Excluding Spotify, which Triton did not follow in 2014, AccuRadio would have been eleventh.) The number of people listening at the same time rose 35% to 14,000 from 10,400 a year earlier. The total number of sessions increased by 21%, from 2.1 million to 2.5 million.
Unlike its competitors, who frequently team up with young and developing artists, AccuRadio targets 35 to 64 year olds. Pandora told advertisers that Millennials (typically thought of as those between the ages of 18 and 34) spend more time with service than the average listener. Spotify skews young people in terms of both penetration and self-identification. Half of 8tracks listeners are from 18 to 24 years old. Amazon, however, could be an exception; its Prime Music streaming service is a broad but intermediate offering that will appeal to both Generation Y and their parents. “Classic Rock Dinner Party” and “Classical Dreamtime” are among his most popular playlists.
Certainly, AccuRadio ranks well behind the leaders in streaming. A snapshot of December listening across all services illustrates the dominant players: Pandora had 2.5 million active sessions on average and 1.26 billion sessions in total; Spotify ranked second with 1.1 million average sessions and 852 million total sessions; YouTube (admittedly not a webcaster) and Apple Music would certainly rank well if they were followed by Triton. But AccuRadio has grown and allows people to listen. The service’s average session length in December, 1.73 hours, is more than double that of Pandora (0.63 hours) and Spotify (0.41 hours) and is only exceeded by the punk and alternative station idobi Radio.
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“We focused on the genres and channels that are right for the workplace,” says Hanson. “The idea is that you can show up at your desk and with one or two clicks your radio will sound great all day long. You don’t need to create a channel. Pick a genre. [and] you will see a choice of options. With a bit of luck […] It’ll sound good for eight hours. The company says its listeners average one to two jumps per day.
The stations are leaning heavily towards adult formats like smooth jazz and classic rock. Laid-back stations such as “The Spa Channel”, “Classical Relaxation”, “Textures Breeze” and “Beautiful Music” (a collection of mostly instrumental favorites) are reminiscent of muzak, sometimes (pejoratively) called “elevator music” . “He has a page called“ Workplace Moods Channels ”with collections designed for the worker who needs to avoid stress and stay focused on the job.
The arrival of John Gehron as COO in 2010 brought serious difficulties to the company’s broadcast radio and prompted AccuRadio to add more programmers and more channels. Gehron is credited with founding the first oldies FM station to air in 1970 and helped shape the smooth jazz format in the early ’90s before becoming an executive with American Radio and Infinity Broadcasting, Clear Channel and Harpo Radio’s Oprah Winfrey. AccuRadio now has eight full-time and eight part-time employees, plus “about a dozen” outside programmers who cover individual genres.
The market has changed since the launch of AccuRadio; Pandora has become the market leader in webcasting and is now a publicly traded company with a market capitalization of $ 2.5 billion; Spotify and SoundCloud on-demand services have a strong following in the United States; iHeartRadio has made a major breakthrough in webcasting; NPR has gone from jazz and classical to being a popular taste maker.
Gone are the days of the relentless pursuit of music. Five years ago, curation efforts were mostly limited to playlists created by publishers of the Rhapsody subscription service. Since then, streaming services have collectively had a “come to Jesus” moment on the value of listening behind. Spotify hired John Marks away from SiriusXM Music to lead its global country programming and chose George Ergatoudis, head of music at BBC Radio 1 and 1Xtra, to lead its content programming in the UK. Apple’s Beats 1, a one-to-many radio station, poached Zane Lowe and a handful of producers and BBC staff, while Apple Music has latched on and expanded the playlists genre created by the publisher and promoted by its predecessor, Beats Music.
“Kurt saw the Internet very early on and saw streaming probably sooner than anyone as a viable business model,” says Fred Jacobs, a radio consultant who has known Hanson from his years of radio research in the 1970s. other streaming brands are getting agitated and trying to find their way. “
Marketing and branding are always crucial in music streaming. It’s all about the use cases. Does a service want to attract hardcore music consumers? Tell them that they can choose from all the music in the world, or something similar. Does the service want to target people who broadcast outside the home? Make it a mobile product first with playlists for exercise and driving. Is it for audiophiles? Provide them with high definition sound.
Despite all the success, it is a difficult business with an ever-growing graveyard. AOL turned to Slacker to power its radio station in 2013. Yahoo let CBS Radio, in 2009, and iHeartMedia, in 2012, power its radio station before quietly shutting it down two years ago. Apple shut down its ad-free radio service, iTunes Radio, last month. Samsung’s Milk Music is rumored to be shutting down, although the company denies the allegations and said it “remains committed” to the platform. The casualty list grew after this year’s increase in the free streaming royalty rate, to 0.17 cents per stream from 0.14 cents. Long-running Live365 webcaster shut down last month after running for more than 16 years. Three-year-old Smooth Jazz Chicago has also chosen to close its doors.
Some of the early webcasters are still around, and going underground and subsisting on the support of listeners has been a workable model. Soma.fm and Radio Paradise have successfully used an ad-free, listener-supported business model since 2000. Pandora, a second-generation yet pioneering service, has just celebrated its 10th anniversary. It racked up $ 367 million in losses while reaching 9.5% of US radio tuning.
AccuRadio survived by staying slim. Recently, it has devoted more resources to its advertising sales. Last year, he hired Mary Beth Agase, a 20-year veteran of radio sales and management, to lead his sales efforts. Hanson says the company’s new representative firm, Audio HQ, gets radio purchases from the national AccuRadio network with CPMs roughly 50 percent above the webcast average. “We’re in the $ 5 to $ 6 CPM range. It’s still significantly lower than what Pandora gets in the local market, but good enough for domestic purchases.”
A $ 2.5 million investment in September 2014 by Los Angeles-based NantWorks led to three new full-time employees, several new outside music consultants, and higher SEM expenses such as pay-per-click advertising. It also provided the resources to add support for Roku and Sonos and enabled a launch in Canada.
Despite growth and expansion, the focus remains on day workers. “Reaching people while they are at work is a very difficult task for advertisers,” says Hanson.