Five on Friday: Media, Messenger and Monetizing Music
Featuring Pandora, Spotify, Ad Exchanger, Axios, Forbes and Facebook
If you’re tired of the political headlines, we’ve got something to distract you – subscription news you can use to grow your business. In this week’s edition of Five on Friday, Pandora and Spotify face the difficult reality of trying to monetize streaming music, Ad Exchanger explains how Google’s GDPR consent tool will limit publishers, Forbes explores blockchain, Axios shows how publishers are using paywalls to stay afloat, and Facebook tries to help people protect their data with new restrictions on Messenger.
Pandora and Spotify Finding Streaming Music Less-Than-Profitable
Last week Pandora and Spotify posted their quarterly financials and neither were impressive. We reported on Pandora here. While Pandora had total revenue of $319.2 million, a 12 percent increase, and total subscribers grew to 5.63 million, a 19 percent increase, the company also reported a net loss of $132.3 and lower engagement year-over-year.
Spotify reported that it had 170 million monthly active users, 75 million premium subscribers and total revenue of €1,139 million. While those figures may be impressive, the company also posted an operating loss of €41 million, or 4 percent of total revenue.
The bottom line is that neither Pandora nor Spotify have found their sweet spot, reports Diginomica. They continue to refine their offerings and to gain access to new audiences through partnerships, but will those tactics ever be enough? Will Apple, with 40 million paid subscribers, surpass them both? Considering that Apple has been marketing digital music longer than Pandora or Spotify, and they have seemingly endless resources, Apple may figure it out long before smaller players like Pandora or Spotify do.
Google’s GDPR Consent Tool Limits Publishers
According to a May 3 report by Ad Exchanger, Google recently announced some of its tools in its GDPR compliance arsenal. Among those tools is Funding Choices, a consent tool that will limit publishers to 12 ad tech vendors or supply chain partners. Ad Exchange explains that Google’s new consent form will greet website visitors asking if they can use visitor data to tailor advertising. The user has the option to select yes or no. If the user says yes, the ad experience will be more relevant to the user. If they say no, the user will get more random ads.
Funding Choices is a type of consent management platform (CMP), and publishers can use other CMPs instead of Google’s Funding Choices option. For publishers who choose Google’s solution, they will be restricted to 12 supply chain partners which includes SSPs, exchanges, ad servers, plug-ins, tracking and measurement tags, etc. For more on this topic, and how it might affect your subscription company, read James Hercher’s article on Ad Exchanger.
Blockchain in Publishing: Is it an innovation or a disruption?
Forbes has taken a great interest in blockchain, trying to determine if it is an innovation or a disruption, particularly in terms of the publishing industry. The company hosted an event last month to better understand the impact blockchain could have on publishing. They spoke to about 50 industry executives and stakeholders to hear three possible disruptors talk about blockchain: Jarrod Dicker, CEO of po.et, David Bookspan, co-founder of Amino Pay, and Julien Genestoux, CEO of Unlock.
Each of the three plays a different role in the blockchain ecosystem including everything from attribution and permission to paywalls and subscriptions. Each company is also using blockchain to solve a different challenge. For example, Amino Pay wants to verify ad views and provide instantaneous clearing of payments. After the discussion, Forbes concluded that blockchain in publishing will have benefits but there are concerns to be considered including security, full transparency and the right to be forgotten. Learn more about blockchain and publishing at Forbes.
Axios: Publishers Rely on Paywalls for Survival
Every month it seems we hear about a different publisher launching a paywall. In the last year alone, Bloomberg, Vanity Fair, Wired, Business Insider and The Atlantic have put up paywalls, while publishers like the Wall Street Journal and the Boston Globe have tightened theirs, reports Axios.
Why? Publishers are looking for sustainable sources of revenue. Gone are the days of being flush with cash from print advertising and print subscriptions. Media organizations are having to get creative to cross the digital divide. Only the biggest and best like the New York Times, the Washington Post and the Wall Street Journal have created a unique package that have helped offset the losses felt by declining print ads and lower circulation, said Warren Buffet at Berkshire Hathaway’s annual meeting. The big question for other publishers is this: will paywalls keep them afloat?
No More New Bots or Experiences in Facebook Messenger
In late March, Facebook made some changes to the Messenger platform to help users get more control over their private data and put stronger protections in place to prevent misuse. One of these changes is to pause app review, meaning Messenger will not be allowing new bots or experiences to be launched on Messenger until Facebook can review its policies and make necessary adjustments.
In a blog post by Ime Archibong, vice president of platform partnerships, Facebook outlined some of the steps the company would take to protect user data:
- Do an in-depth review of the platform, particularly of apps who had access to large amounts of data prior to Facebook’s tightening of data access in 2014.
- Advise users if an app was removed for the misuse of data and ban those apps from the platform.
- Encourage users to manage their existing apps to control their data.
- Employ more rigorous policies and terms for B2B apps.
- Reward people who report possible misuses of data by app developers.