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Patrick Stewart?

Solveig Whittle

I think it's worth taking what Mr. Maples has to say here seriously, because he makes some good points.


1. Not all streaming customers are like Rhapsody's, who say, apparently fairly frequently, "Sometimes, I just don't know what to play." This is the myth (repeated by Beats and Pandora) that discovery is the customer problem, and curation is the cure. Yet research shows that discovery is still via radio, TV and word of mouth: http://www.digitalmusicnews.com/permalink/2013/20130326discovery - except for teens, who discover music through YouTube: http://www.nielsen.com/us/en/press-room/2012/music-discovery-still-dominated-by-radio--says-nielsen-music-360.html

There is no overwhelming call from music consumers to improve music discovery. The only people who complain abut having to wade through the proliferation of crappy music in the marketplace are... musicians. Curation is a solution that is chasing a customer non-problem.

2. I totally agree with Mr. Maples that survivial of the fittest streaming service will greatly depend on a business model that minimizes customer churn. However I don't think that reduced churn results from either better discovery or more variety. It results from a high switching barrier or cost, or from a unique value proposition (service). If it's easier to stay with a service, and the UI is good, why switch? Increasing customer loyalty is important, and I think there is a lot more the streaming services, including Rhapsody, could be doing to offer enhanced artist content or access (private invitations and communications between bands and fans, for example) in order to build customer loyalty and differentiate themselves from other streaming services, thereby reducing the likelihood of commodification and switching, or churn.

Rhapsody's "Give Fans The Credit" program is a good start, but really it seems aimed at increasing artist loyalty, not listener value.

3. The big issue which is unaddressed, but alluded to in the link to the Verge article on Spotify, is that costs continue to outstrip revenues for all the streaming service providers. The costs of licensing and hosting only increase the more subscribers gained and the more music that is consumed. Until a workable cost model emerges, it seems inevitable that all the services will continue burning investment capital, and it will be a war of attrition that only the deep pocket platform players (Apple, Google) can win.

Only Pandora seems to get this, and is trying to address the licensing cost issue, although they have gotten a lot of criticism for the manner in which they have chosen to do so.

It might be a better strategy for Rhapsody to figure out how to squeeze more out of its cost structure, provide some differentiating artist-to-fan services (besides discovery) that appeal to listeners, and hunker down for a long battle.

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