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Rara.com – Music for Everyone?

WHY RARA.COM IS FAILING TO ADDRESS THE MASS MARKET

The other day I pointed out four reasons why Rara.com is worth checking out. While Rara.com certainly brings a fresh breeze into the market, I believe they will have a tough time. Here’s why:

Let’s look again at what lets Rara.com stand out in the ecosystem of streaming services. The biggest difference between Rara.com and the existing players is clearly the user interface, which is designed to be very easy and intuitive. In the launch presentation Rob Lewis, chairman of Rara.com, said that the market of digital music is still in its infancy and has not yet reached the mainstream. Players like Spotify, at the same time, do not address the mainstream market, but a small niche instead:

The graph shows the audience along the two axes “music knowledge” (from “music listener” to “music guru”) and tech knowledge (from tech laggard” to “tech wizard”). According to Lewis, a majority of existing music services (including Spotify, Napster, Pandora, but also iTunes) are “designed for people who know a lot about music and also are technically very literate” (i.e., the upper right quadrant), and fail to meet mainstream requirements. Rara.com, on the other hand, focusses on the remaining untapped market, that represents a majority of 80% of the entire market, according to their analyses.

Quite frankly, I think that Rara.com is not going to be able to get those remaining 80% of the market, and I’m going to explain why.

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Grooveshark shuts down in Germany

As of today Grooveshark has shut down in Germany. According to their website, they did so because because of “excessive operating costs”. They continue to imply that this is the fault of the GEMA, and suggest to get in touch with them to help bring down these costs.

It would appear they are referring to the recently announced rates for streaming services (as mentioned in a previous post). Which is kinda funny, given that they don’t even pay any license fees to the GEMA in the first place. As the GEMA says in their press release in response to Grooveshark’s accusations:

Grooveshark has shut down their service in Germany – contrary to their claims – not because of excessive operating costs.
In fact, Groovshark refuses generally to pay any fees whatsoever for their service. Grooveshark has never even been in touch with the GEMA in any way yet. (source)

So what Grooveshark forgets to mention is that they don’t, never did, and probably never wanted to give money to the artists that they have on their website. Contrary to streaming services such as Spotify, Deezer, or Simfy, Grooveshark do not have deals with the labels, nor do they pay any royalties. In fact, they are being sued by all 4 majors because of that.

Here’s the message that Grooveshark shows to visitors with German IP adresses:

At the bottom they recommend that German users should use Simfy instead. Here’s what Simfy says on their blog:

simfy AG today announced a transatlantic collaboration with US-based Escape Media Group and its music streaming service Grooveshark. In response to Germany’s music streaming regulatory environment, Grooveshark.com has begun referring visits from German IP addresses to simfy.de. The goal of the agreement is to provide German music fans with continued streaming access to the songs and artists they love. (source)

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last.fm: Annual loss increases to £5m in 2010

Bad news from my second-favourite online music service: According to The Register, last.fm saw an annual loss of £5m in 2010:

According to the company’s accounts, Last.fm’s losses increased in 2010, the last year for which records are publicly available. The annual loss grew from £2.89m in 2009 to over £5m in 2010. That was on a turnover of just £7.992m in 2010 (2009: £7.283m). Administrative expenses increased from £2.95m to over £8m.”
(www.theregister.co.uk)

Unfortunately The Register did not specify their sources, so we’re left to wonder what exactly “According to the company’s accounts” means.

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Simfy now connects with Facebook

Simfy announced that they now connect to Facebook as well – just in time for the Facebook Timeline roll out. The feature, which is already used by Spotify, connects to Facebook’s Open Graph, which has been introduced in September 2011 on the f8 conference, and automatically shares songs in the Facebook Ticker on the Facebook news feed. Simfy →

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Facebook launches ‘Listen with Friends’ Feature

Facebook announced on their blog a new real-time group music listening feature called “Listen with Friends”:

Look for the music note in the chat sidebar to see which of your friends are listening to music. To listen with a friend, hover over their name, and click the Listen With button. The music will play through the service your friend is using. (source)

Judging from the screenshots among the first services to make us of this are Spotify and Rdio.

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Entrepreneurship

Every time you want to make any important decision, there are two possible courses of action. You can look at the array of choices that present themselves, pick the best available option and try to make it fit. Or, you can do what the true entrepreneur does: Figure out the best conceivable option and then make it available.

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Rdio to launch in Germany

It’s getting cozy in the German online music streaming market: After the recent launches of Deezer and Rara.com, US based Rdio now announced their Germany launch starting January 12, 2012 (blog.rdio.com).

Spotify, any news?

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4 Reasons Rara.com is worth checking out

Recently I mentioned the new streaming service Rara.com. Here are a couple of things about them that are quite interesting (the following is all based on their launch press conference video and their press release):

1) Innovative User Interface

Instead of a “boring” Excel spreadsheet look, Rara.com wants to give users a more visual user experience. So instead of typing in your artist and listening by album, as you would do with for services such as Spotify or Simfy, Rara.com presents a colourful interface where the user can browse playlists by the three categories moods (e.g., “Chilling out”, “Sunday Morning”), genres (e.g., “Pop”, “Rock”) and Best of (e.g., “Best of 90s”, “Best of 80s”):

2) Curated Playlists

The playlists on Rara.com are not user generated, or put together by some algorithm, but instead they are curated playlists:

rara.com also features a wide selection of expertly curated music channels to suit your every mood at the touch of a button making playing music online with rara.com as easy as switching on your radio or CD player.

One of these experts will be Imogen Heap, who is joining rara.com as associate editor, and also had an impact on the design of the service. According to Rara.com “many more respected artists [are] joining [the] Rara.com team”.

3) Introductory Pricing Strategy

While the monthly fee is the standard $/€/£ 4.99 per month for web-only and $/€/£ 9.99 for web + mobile access, Rara.com comes with an introductory price of 99 p/ct per month for the first 3 months. In contrast to Spotify et al. there is no ad-supported version of Rara.com.

4) Cooperation with Hewlett Packard

To get their feet off the ground Rara.com has entered a “global partnership” with Hewlett Packard to give them “instant scale”.  The world’s largest computer manufacturer will have Rara.com “preloaded on all their devices” (whatever that may mean, a link to the website?), and allow “instant access to music” for their customers,  introducing the Rara.com to an estimated 60m users a year.

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