Wednesday, November 18, 2015

Entertainment Business Culture


The purpose of today’s blog is to inform the Entertainment Business culture and it’s investors of the changes taking place with Rdio the streaming music service industry’s newest member. In a published report by Ben Sisario Sept.4th 2014, in the New York Times, Rdio has moved into the free music streaming market to compete directly with Spotify, Beats Music, Rhapsody, ITunes and others. The move by Rdio to change its business model from all paid to free was based on the latest trends in the streaming music business.

Based in San Francisco, Rdio offers its music in 60 countries. Over the past four years the service was fully paid. However, until recently the company has switched its business model to the so called Freemium model. This business model which is used by the larger companies provides music on the basis that the listener will at some time in the future pay for the subscriptions features. To date “Spotify has 10 million paying users and Rhapsody has two million”.  Rdio has moved to the free music model to compete for the users who pay for music subscription features.

The published article by Ben Sisario clearly defines how trends spread throughout the web almost overnight. A business which cannot see trends will not last in the Entertainment Industry. When companies like Clear Channel, Apple, Google and Pandora adopt to a trend this signals that it is time to pay attention to the stock prices and join the investment. To make it clearer Cumulus Media announced that it has a 15 percent stake in Rdio’s parent company, Pulser Media, in exchange for promotional services and rich media content.

Last year streaming services contributed $1.1billion in revenues to the $15 billion global industry, according to the International Federation of the Phonographic Industry. The strength of the industry is based on the foundation of the subscriber. The listener needs a reason to become a subscriber to a streaming service. Over the past four years I have been a listener with Spotify recently my interest in Rdio has grown. I guess I was curious, the name caught my attention or is it the fact being a musician and publisher I am always looking for a new entertainment outlet.

436 MEDIA Inc.

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