Pandora’s Serial Deal Shows That Music Alone Is No Longer Enough

 

pandora_logoPandora this week announced that it signed a deal to become the exclusive streaming partner for hugely successful podcast Serial. The move is interesting on many fronts, not least what impact having near-on-demand content within the otherwise only semi-interactive environment will have on users. (Serial episodes will be broken into 5 minute chunks which users can flick between, additionally previous episodes will be available on demand as podcasts).  But the most important implication is the statement this makes about Pandora’s vision.  Pandora has always been a music service and this will always be the case.  But there is something that Pandora is even more than a music service: it is a radio service.  While Spotify and Deezer have their sights set on transitioning music industry revenue, Pandora is competing for radio listening time and radio advertisers’ dollars.  Spoken word is thus a natural transition.  But there is also more to the shift to spoken word and the implications go far beyond Pandora.

Music Licensing Is A High Effort Enterprise

For all the arguments Pandora may make about how it pays more to the music industry than terrestrial broadcasters, it remains a bête noir for songwriters and for many artists.  Whatever the rights and wrongs of the incredibly complex and nuanced arguments, one thing is clear, licensing music is a high effort enterprise.  And that’s even with Pandora’s comparatively straight forward statutory licensing framework.  Music services of all shapes and sizes are routinely rueful about the hassles of licensing music, whether that be the complexity of rights fragmentation, the challenges of costs or the inherent insecurity begotten of commercial rights holders being able to withdraw their rights at any moment.  By contrast licensing non-music content can be a relative breeze.

You Don’t Need To Buy The Whole Shop

The other benefit of non-music content is that audiences do not expect it to ‘all be there’ in the way they do with music.  If a cable subscriber does not have HBO in her subscription she does not expect to be able to watch Game Of Thrones without paying for the privilege to do so.  But a Spotify user will fully expect to be able to find Taylor Swift in among the 30 million tracks he subscribes to.  Thus when Spotify added a smallish selection of video shorts from Viacom when it introduced video earlier this year it had far more impact than if it had added the catalogue of an indie label.  Non-music content is a lower-effort, higher impact way of streaming music services broadening their appeal.

Music Services Are Competing For User Screen Time

Music services, on demand or radio, are not competing in a music-industry vacuum.  They are competing directly with Candy Crush Saga, YouTube, Instagram and WhatsApp.  Consumers use their smartphones and tablets for multimedia experiences, with video, games and messaging the real growth areas.  Music apps are competing for screen time and need more weapons in their arsenal to do so.

While Pandora’s Serial deal is probably more focused on listening time in the car than it is on the phone, it nonetheless reflects the same broader strategic imperative: music alone is no longer enough.


Tagged in: Deezer, Licensing, Mtv, Music Licensing, On Demand, Pandora, Pandora Media, Pandora Radio, Serial, Serial Podcast, Spotify, Streaming Music, Streaming Radio, Viacom

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