Have Netflix, Will Travel: EU Digital Single Market Inches Closer

Negotiators for the European Commission, the European Parliament, and European Union member countries this week reached agreement on new rules that will allow citizens from one EU country to access digital services they subscribe to, such as Netflix, Spotify, and sports live streams, when traveling in another EU country starting in 2018.

Up to now, exclusive territorial licenses between rights owners and online services, as well as other rules, have generally prevented services from granting access to subscribers from outside their home country.

“Today’s agreement will bring concrete benefits to Europeans. People who have subscribed to their favourite series, music and sports events at home will be able to enjoy them when they travel in Europe,” EU vice-president in charge of the Digital Single Market Andrus Ansip said in a statement. Read More »

Music For The Masses

Music streaming has brought a lot of personalization to the experience of listening to music. Faced with the challenge of differentiating their service from competitors featuring substantially the same catalog of music, at a de facto standard price point, streaming services have focused on developing ever-more precise tools for personalizing the listening experience in the hope of keeping users engaged. So, Spotify has its playlists, Apple has its curators, Pandora has its music DNA project.

His_Master's_VoiceMusic rights owners too, in their approach to the streaming business, have also encouraged personalization. Burned badly by free music “sharing” sites, the record labels have been more than happy to reinforce the streaming services’ efforts to turn listening into a personal — and solitary — experience, such as by curating their own Spotify and Apple playlists.

Digital technology itself has also contributed to the bias toward personalization. Use of streaming services is heavily weighted toward mobile devices, particularly phones, which by design are personal, and in general highly personalized devices. Digital distribution also generates the sort of highly granular usage data on which personalization tools rely.

All that personalization has come at a price, however. With everyone cocooned inside their own playlists and cut off from the outside world by earbuds, the communal experience of listening to recorded music with friends or family has become a rarity. Read More »

Apple’s Risky New Metric

With iPhone sales flattening, Mac revenues eroding and iPad sales falling, Apple broke out a new metric in its Q4 (fiscal Q1) earnings release Tuesday in a bid to direct analysts’ and investors’ attention toward those parts of the business that are still showing robust growth.

According to the “Earnings Supplemental Material” released with the earnings report, the “active installed base” of iOS devices has reached 1 billion, a figure Apple CEO Tim Cook said the subsequent analyst call has actually now been exceeded. That figure, which CFO Luca Maestri said Apple-TV-4reflects 25 percent year-over-year growth, represents the total number of iOS devices out there actively downloading apps, using Apple Music, buying music from iTunes, using iCloud and other Apple services in the last 90 days. And it underpinned, Cook and Maestri repeatedly stressed, $5.5 billion in revenue for Apple in the quarter ($4.7 billion net of the portion of some service revenue shared with rights owners), an increase of 15 percent over the same quarter last year.

“The market has not fully understood that we have a portion of our business directly tied to our incredible installed base that’s not driven by quarterly results,” Maestri said. “Those customers engage with our services and that business, which is a $20 billion business, is growing at more than 25 percent during the last 12 months.” Read More »

Licensing Music Streaming’s All-Of-The-Above Business Model

There’s an old adage in business that there really are only three fundamental business models in the world: I pay, you pay, or somebody else pays. Music streaming services have been built on each of those.

Music has been bundled in with other services at no apparent additional cost (I pay); it has been offered as a subscription service (you pay); and it gangnam1has been made available for free, supported by advertising (somebody else pays). Increasingly, however, streaming services are looking to multiple business models in search of still-elusive profits.

The latest case in point: Pandora. Originally an ad-supported internet radio service, it spent $450 million last month to acquire music concert ticketing and promotion service Ticketfly. This month it dropped another $75 million to buy parts of paid-streaming service Rdio at the latter’s liquidation yard sale. Read More »