Rhapsody exec advises Spotify, Rdio: You’re doing it wrong

jonmaplesrhapsody

Jon Maples.

Jon Maples, Rhapsody VP of Product and Content, has some veteran advice for fellow music streaming competitors Spotify and Rdio: Stop making the same mistakes we did.

In this blog post, Maples takes a trip down memory lane and discusses how Rhapsody put out costly advertisements from 2008-2010 that share similarities with the TV spots Spotify and Rdio are running now.

Here’s an example of a Rhapsody ad that ran in 2008:

Then, he compares it with Rdio’s spot featuring Paramore that’s out right now:

Maples points out what these commercials have: interesting visuals and an emotional connection to music. But here’s the problem, in his own words:

But what exactly are these companies advertising? We tried the emotional connection to music with our Droga5-produced bubbles ad early on. The ad featured a woman who dove off a building into a bubble that immersed her into music. She dove into another bubble, and the music changed. Nice idea. Hard to understand in terms of product. Or value proposition. Or pretty much anything outside of diving off high rises, which we neither condone nor recommend.

rhapsody1Maples, who does commend Spotify for its viral nature and Rdio for its social features, says that his competitors need to focus more on the service itself and educate customers on what exactly these companies can provide, rather than just promoting artists.

He ends with this:

Since neither of our companies sell advertising, Rdio and Rhapsody are in the business of sourcing, identifying and enticing fans who are willing to pay for music. How you go about that is the hard part. My belief is that streaming companies have to sell the value of a music service and the benefits to customers instead of relying on an emotional connection to music, giving songs away or buying exclusive rights to a band’s new release.

Seattle-based Rhapsody has been in the streaming music space since 2001. The company saw its revenue rise nearly 13 percent in 2012, to $143.7 million, while the company reduced its annual loss to $12.3 million, an improvement over its $13.6 million loss the previous year.

The larger revenue comes despite tough competition from rivals like Spotify, Pandora and Rdio. It follows deals including Rhapsody’s MetroPCS partnership and its acquisition of the Napster music service from Best Buy in late 2011.

Both Google and Apple have been rumored to be building their own streaming music services as well. It makes sense, as global music sales rose 0.3 percent last year to $16.5 billion for the first time since 1999. That’s largely due to the subscription-based services.

Previously on GeekWireRhapsody app arrives for Windows Phone 8

  • joe

    This is like Microsoft giving advice to Apple on how they should change what they are doing with the iPhone…

  • http://twitter.com/shadesofsolveig Solveig Whittle

    I agree with Joe – there are bigger issues at stake related to streaming and the music industry than consumer-targeted TV advertising. Interesting to note an increase in revenue and decrease in costs at Rhapsody – but since we cannot see their subscriber numbers, it’s hard to know what is really going on with Rhapsody’s customer base: is it shrinking or growing? “Maples…says that his competitors need to focus more on the service itself and educate customers on what exactly these companies can provide, rather than just promoting artists.” I do agree that perhaps this is not an area where one could argue Rhapsody is leading by example. But it’s interesting to see Maples out there stirring the pot.

    I would much rather see Rhapsody take a leading role in establishing standards for metadata, or leading a charge on royalty rate rationalization in the industry, playing an intermediary role in bringing together artists and labels in the mid-tier artist market, or advocating for/promoting unsigned musicians. There are so many other positive ways to contribute to solving the problems with the music industry than pointing out the faults in your competitors’ TV advertising strategies.

    I do agree with Maples that “streaming companies have to sell the value of a music service and the benefits to customers” The question is, what exactly is that value, and how does Rhapsody differentiate itself from its competitors, acquire new customers, and grow its base in the face of so many other streaming service choices and relatively low switching costs?

  • Levi

    two mistakes were rhapsody forcing people to use REAL player and buying out dinosaur napster

    • Mr. Endoplasmic Reticulum

      Actually Napster was a very nice service – they had a solid IOS app that was better than what Rhapsody has out there now.

  • Len

    I used to use Rhapsody….now I choose Rdio because there is no difference in the music library,the app is better and they have an updated software client that works.