Here’s my guess for the vision behind Ian Rogers going to MOG/Beats/Daisy: much tighter integration between the content business and subscription service. The service will have business deals to heavily promote artists. It’s similar to paying radio stations to play a single, but rather than pay them, the label will own one.
If the Daisy service can break even and attract a reasonably large number of users, it will become a marketing platform. It may even become a profit center for the label if it can avoid giving too much of the revenue to other labels.
What did the MOG acquisition cost? I would guess 20 million or so. I think I’ve seen that number around, but if I’m just making it up I bet I’m within ten million. That’s a reasonable budget for a publicity machine with so much potential.
The Daisy service itself will be marketed like a music product. Having a sub will be cultural identity just like those red headphones or the white earbuds before them. Rappers will all have subscriptions. It will be design-forward and style-forward. It will be perky, gym-toned, safely dangerous. Compare to this heinously unhip MOG ad.
Or, that’s Iovine’s vision. I can’t say for Ian or the investors.
Related: Jimmy Iovine on why he can make the on-demand streaming business work:
Why tech companies can’t succeed at music subscriptions:
I was shocked at how culturally inept most consumer electronics
companies are. And what I also learned is that you can build Facebook,
you can build YouTube, you can build Twitter — you can be a tech
company and do that. But those [sites] program themselves.
Subscription needs a programmer. It needs culture. And tech guys can’t
do that. They don’t even know who to hire. They’re utilities.Why Beats/Daisy will be different:
[Other music subscription] companies, these services, all lack
curation. They call it curation; there’s no curation. That’s what we
did as a record label, we curated. There’s 150 white rappers in
America; we served you one.
We are heavy on curation, and we believe it’s a combination of human
and math. But it’s a give and take.Right now, somebody’s giving you 12 million songs, and you give them
your credit card, and they tell you “good luck.” You need to have some
kind of help. I’m going to offer you a guide. You don’t have to use
it, but it’s going to be there, and it’s going to be a trusted voice,
and it’s going to be really good.
value propositions that won’t move the needle:
– large database (14,000,000) – so what
– free – you can get that anywhere
– ubiquitous – ditto
– discovery – yawn
Excellent (curated) listening experience with personality + local…Yes. Local personality is the key (IMHO).
Bruce, when you say local do you mean like local radio, with news about your hometown?
About the large adatabase, I think if anybody gets a truly encompassing catalog it will matter, but nobody’s even close. I don’t know what the number is, but it wouldn’t surprise me if it was 2X – somewhere around 30 million. Maybe if the database can incorporate YouTube it can get close.
“Discovery – yawn” – *guffaw*
But actually, I think that “discovery” is one of the big things people pay for when they get an on-demand service. Unless I’m opening the app with something specific in mind, my first stop is MOG’s “editor’s picks”, Rdio’s “Heavy Rotation”, or the Pitchfork app in Spotify. That’s not about finding new music, it’s about avoiding a lot of clicking around. These discovery features are solving a problem with information architecture.
But Iovine thinks the real problem is that nobody identifies with on demand services. He thinks people see on demand services as techie gibberish rather than things to love. He thinks there should be people with tatoos or patches for the on demand service. I personally think this might be true! But if so, it’s not the same kind of app as Spotify etc. It’s more like a members-only fan club where the operators of the fan club also own the content.
Curation isn’t the only thing the record companies did. They were gatekeepers that strictly regulated who had access to your ears. And it sucked.
Iovine is a relic of that era. The new order means ANYONE can be a content creator – and ANYONE can be a curator. Only sheep will allow the record companies to dictate what they listen to these days.
Having said that, the success of the crappy Beats headphones shows there are a lot of sheep out there. What Iovine really excels at is marketing. Period.
Leo, I think that what Iovine et al do is shape the culture. They have a product to move and they work to make that product cultural currency.
We all have an opinion on those red headphones, for example. You may have better ones, but it’s between you and yourself. “By Dre” creates an instant emotional response, whereas “Foobar 2000 X500 2T micro sub in-ear lorem ipsum” sounds like “bla bla bla”.
Yeah, there are a lot of sheep there. Iovine understands their language. He speaks sheep. And I think his career has been thriving since the dawn of Napster.