Radio Aggregator Apps Compete With Music Subscription Services

Despite the boom in music subscription services, from Spotify to Pandora, terrestrial radio and aggregator apps seems to be the most popular ways for

Despite the boom in music subscription services, from Spotify to Pandora, terrestrial radio and aggregator apps seems to be the most popular ways for audiences to discover new music.Nielsen’s “Music 360” study surveyed 3,000 consumers and found that 48% of listeners use radio as their first option to find new music, ahead of friends and relatives (10%). In terms of digital listening, mobile apps are key, with 54% of consumers saying they have a music app on their smartphone, 47% having radio apps and 26% having apps for music stores.Subscription music sites should pay special attention to the growing popularity of radio apps. The New York Times reported on the growing competition between iHeartRadio and TuneIn, both providers of free mobile apps for streaming radio. TuneIn offers 70,000 streams from around the world and has 40 million monthly users. That’s a 267% increase in the company’s mobile listener base over the past 12 months.And iHeartRadio, owned by Clear Channel Communications, “has been downloaded 95 million times and has attracted more than 12 million registered users,” according to The Times. iHeartRadio also has a custom radio function, which is currently free, but reveals the company’s intention of competing directly with Pandora.Needless to say, making money from online music streaming remains problematic. While terrestrial stations pay music producers negotiated rates no matter how many people are listening, online radio operators pay producers, labels, and artists for each new listener. Subscription site Pandora pays more than half its revenue out in music royalties.Music subscription sites should be aware that more consumers will likely adopt these music aggregation apps in lieu of painstakingly creating custom streams through subscription services. However, die-hard music lovers will want their custom streams as well, and creating a smartphone app may be the deciding factor for a consumer weighing your subscription music streaming service versus another.

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