Any DJ who’s earned the equivalent of a Platinum certification ( 1,000 likes) - on a single mix or across multiple mixes, on a cumulative basis - gets 3X the normal weekly listening limit.Any DJ who’s earned the equivalent of a Gold certification ( 100 likes) - on a single mix or across multiple mixes, on a cumulative basis - gets 2X the normal weekly listening limit.Similarly, if you’ve contributed your time and passion to 8tracks by creating awesome playlists, we want to ensure your contribution is properly recognized: If you’ve already contributed cash to 8tracks by investing in our crowdfunding round, you will automatically receive 8tracks+ in perpetuity - for life! - which we’ll apply to your account within 30 days. How will this affect investors in our crowdfunding round? The less cool things in the former bucket - more ads, interstitials that stop playback between mixes, weekly limits on the number of hours a free listener can stream - will be introduced in early November to encourage listeners who tune in a lot to “pay their way” directly and to cap our royalty costs for those who do not. The cool things in the latter bucket - more skips, offline listening, full DJ library access - are dependent on our direct deals with labels, and we’re not yet in a position to offer these as part of 8tracks+. To ensure 8tracks can sustain itself with its current level of funding, we’ll introduce both limits on free listening and benefits for paid listening over the coming year. If a meaningful proportion of our listeners subscribe, and we limit the amount of streaming (and thus royalty expense) for ad-based listeners, we can return 8tracks to profitability over the course of the next year. Our average revenue per user (ARPU), on a monthly basis in the US, has trended at $0.12 our current 8tracks+ price point is $2.99, a 25X difference. Historically, we haven’t placed much emphasis on promoting our 8tracks+ subscription, but we believe it represents a big opportunity for revenue growth. Over the past four months, our community has rallied behind us, raising $2.5m to help power our future. However, the round is half of our $5m target for crowdfunding, likely not enough to fund the growth necessary to make the economics of a primarily ad-based internet radio model work in the US, given the prevailing royalty rates. (In Canada, this rate is one-tenth that in the US.) Our US royalty is the same rate paid by Pandora, which - thanks to its larger audience and sales team - brings in four times the ad revenue per hour that 8tracks is able to generate. On the other hand, in the US, we pay a high fixed royalty rate on a “per track, per listener” basis. As a result, it’s been difficult to generate a consistent level of revenues from one month to the next. We’ve found that when we lose ad deals, it’s typically because of our audience size. The ad model works best for a service with a large audience, as brands and agencies would prefer to work with relatively few apps or websites in a particular category so their efforts aren’t spread thin. We’ve historically relied primarily on the sale of advertising to generate revenue for 8tracks. We want to build a sustainable business that doesn’t require ongoing VC funding. Larger services have raised billions to fund continued losses, but even with our recent crowdfunding, 8tracks has raised only $5m over the last decade. So expensive that, to date, no digital music service is generating a profit. Streaming music on the internet is expensive. The problem: the economics of streaming music I’d like to take a moment to walk you through the background, our gameplan, and the impact on our community. In the coming weeks, we’re going to shift our focus in the US to our 8tracks+ subscription model, including the introduction of a listening cap. Guest post by David Porter of music streamer 8tracks
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |