Music Aggregators Move From Building Features To Growing Platforms

A number of popular music sites like Reelr.tv and Chill, that aggregate content from services such as YouTube and SoundCloud, might well be described as offering a feature rather than a more complete service. Such site tend to be limited in how they can be monetized in contrast to sites that use such an approach to build an audience on their way to creating platforms with broader options for monetization.

Web business writers from pundits to venture capital bloggers periodically point out that many popular new sites would have been considered features in previous phases of software and Web development. While such observations are often dismissive, many realize that a sharply focused feature can attract a large audience, as Twitter's humble beginnings attest.

With the growth of API's and the ability to stream audio from such sites as YouTube and SoundCloud, we've seen a variety of music aggregation sites emerge that could be thought of as offering single features.  For example, Reelr.TV focuses on playlists of YouTube videos created using Twitter. Essentially, it aggregates two services to create a feature as product.

While such playlist sites may go on to become more complex, monetization options are fairly limited in single feature mode.  The most obvious are site advertising, affiliate music sales and branded channels.

Beyond those options, it's difficult to come up with monetization possibilities that wouldn't seem like unrelated add-ons. In addition, the steady increase of sites selling ads and music is making it more difficult to achieve sales in both areas.

By contrast, Groovebug pursues a content aggregation model that brings together a wider variety of media on its way to building a platform. Though Groovebug did launch on the iPad, it serves as an example of a project that is using aggregation to build an initial user base that will then support the creation of a platform on which artists and fans can interact.

This longer term vision opens up the possibilities for monetization. For example, they plan on offering freemium marketing services for artists while developing paid services. Given that the wider range of aggregated media also offers more advertising and content sales options, a much broader range of revenue streams becomes possible.

However, companies such as Rockstar Motel are also building towards platform status from other directions and have indicated that such marketing services may well be a part of the mix.

Given that advertising and music sales have become incredibly widespread, one then has to wonder if platforms that offer marketing services will ultimately see a similar fate. Of course, it's a lot easier to set up a site, join an ad network or affiliate program and start vying for a bit of the action than it is to build a platform and develop appropriate services. In addition, once a platform comes into existence, the potential for true revenue innovation emerges and that's when more limited sites are left behind.

Note: The photo by Ewan-M is used in this post under Creative Commons licensing.  Thanks!

Hypebot contributor Clyde Smith is a freelance writer and blogger. He blogs about web business models at Flux Research and the world of dance at All World Dance. To suggest music services and related topics for review at Hypebot, please contact: clyde(at)fluxresearch(dot)com.