Last week I was invited to a panel at Popkomm in Berlin to discuss cloud based music business models. Shortly before I had visited the IFA in Berlin, one of the biggest trade fairs for consumer electronics, to see what´s new at TV and radio devices. I´ll take this as an opportunity to take a look at the challenges music services are facing and at the newest devices that deliver music streams.
We all love streaming services like Youtube, Spotify or Play.fm for what they offer: immediate online access to an infinite variety of music, no matter where we are or what device we prefer to use and no need to copy files from device to device as we can collect and access our music online and on-demand.
Although this concept is as old as the web itself (or at least from 1993 when I started listening to music online), the notation “Cloud Service” helps to underline the differences in regard to pure download services like iTunes or Beatport and became one of the main topics at this year´s Popkomm, one of the largest international meeting places of the music industry.
I was invited to discuss at a panel with Ben Drury (CEO 7digital), Oke Göttlich (Managing Director finetunes), Tobias Schiwek (Co-Founder simfy), Steffen Holly (CTO aupeo!) and Thorsten Schliesche (CEO Napster Germany) and had a bit of an exceptional position: While all these services focus on music by major labels and offer single tracks to download or stream, Play.fm is quite special with its focus on indie label content, DJ mixes and radio shows, ie. recordings with a minimum length of 20 minutes.
We all agreed upon the following:
1) Licensing is complicated due to the fact that in every country there exist various collecting societies. It should be made easier to get licences for music services, at least within the European Union, so the money can be spent for improving the services instead of lawyers.
2) Usability is one of the biggest challenges but will also determine which cloud service will win most customers, on the desktop as well as on other devices.
3) Cloud based streaming services will more and more be available in cars.
This will happen slowly as lifecycles for cars are quite long and it will take some years for streaming services to be implemented. I´d like to add: Some services are already available in cars, eg. Pandora in the Mini and Aupeo will announce two partnerships, soon. Nevertheless I believe that people will just use their iPads or Android tablets in their cars to listen to music from the cloud instead of using systems provided by manufacturers that restrict access to only selected apps or services.
While it was good to see that other streaming services have a similar perspective on challenges, it was a bit disappointing to see what TV or radio device manufacturers had to offer on the IFA: TVs are called SmartTVs these days when they can be connected to the Internet. Every single manufacturer offers its own SmartTV platform with apps but unfortunately there are only few music apps available – I guess the effort necessary for a cloud music service to develop apps for all these platforms is just too high.
Manufacturers of radio devices or wifi stereos can be split into three groups: few positive examples like Sonos or Logitech offer access to on-demand music services (plus 24/7 radio streams from around the world), but most manufacturers only offer access to 24/7 radio streams and still there are manufacturers that even don´t know anything about on-demand music streaming services when you ask them about (we’re not going to drop names, what happens at the IFA stays at the IFA).
Regarding usability I have seen a lot of wifi radios with a tiny, integrated display, so you don´t see anything when you try to use the radio control from a large distance. Again, devices of Sonos and Logitech have to offer a better solution, since they work with iPhone or Android phones as radio controls – very smooth to navigate and hopefully with a Play.fm app pre-installed in the near future.
I think it´s a good move that Popkomm and IFA both happen to be within one week now. But taking into consideration that the challenges mentioned above (licensing, usability, devices in cars) are deeply linked to hardware manufacturers delivering music, the IFA should actually organise panels like this to have music service providers meet with device manufacturers. Eventually, consumers and music producers will benefit from better services.