Wednesday, June 10, 2015

Rdio prepares to launch its €3.99 Select service in Europe

by Emmanuel Legrand

Rdio is preparing to launch in Europe its Rdio Select service, a low-cost subscription streaming programme already available in the US and in other parts of the world, including Canada, Australia, New Zealand, India and South Africa.

The €3.99 plan will be available across Europe in the next couple of months, according to the company's CEO Anthony Bay, once negotiations with rights holders will be concluded. 
Speaking in Cannes during Midem a couple of days before the launch of Apple's streaming service, Bay added that he would have liked to launch earlier but talks with labels, publishers and rights societies have delayed the process. "We have not yet launched in Europe, as we are negotiating licenses, but we hope to get that soon, probably within next month, but we are not there yet," said Bay.

"The industry has developed its structure around 9.99 and everything new requires more discussions," said Bay. "The market is complex in Europe. It takes longer which I think is unfortunate for European consumers, because we have a service already available in many places but not in Europe."

For Bay, fluidity in the European market could be achieved if the European Commission decided "what is the appropriate fair split between the stakeholders. If it could solve that problem, it would be wonderful." 

Bay -- who joined the service in December 2013 and who worked previously at Amazon, where he was responsible for Amazon Prime -- said that Rdio's strategy is to attract various types of consumers by offering different pricing points. Bay declined to disclose the number of subscribers the new tier has attracted. As a privately-owned company, Rdio does not disclose financial figures nor its number of subscribers.

In the US, the basic offer is Rdio, a free ad-supported streaming service, then for $3.99, consumers can pick Rdio Select, which allos access on mobiles to ad-free streaming radio plusn25 daily downloads. The two upper tiers are Rdio Unlimited, at $9.99 with unlimited ad-free streaming radio and Rdio Unlimited Family, a package priced $14.99 for two accounts to $29.99 for five accounts.

"If you look at the TV business you have a free to air TV everywhere in the world and pay TV," said Bay. "The majority of the audience is on free TV and when you chose pay TV, there's different tier pricing. Any subscribers' business needs tiers."

He added, "In the music business, you've had a version of this system with free for about 100 years. Around the world everyone listens to free radio, which has existed alongside paid music for a long time. From our perspective, we need something that is free and something at $10 with an all-you-can-eat model."

In passing, Bay drops that the free, on-demand tier that Spotify offers "is bad for the industry: If you give someone something too good for free, they have no reason to pay."

Rdio Select, he added, offers for $3.99 (or less than $1 in India) a significant uptake from the free tier, with access to an unlimited catalogue, higher quality files, and 25 downloads at a time. "This offer is not aimed at people who collect music but rather at people who hear a song and want that song over and over or just a list of hits. So this is made for a pretty broad audience."

More than Apple or Spotify, Bay sees YouTube as the biggest competitor as it provides all the music for free. "The biggest challenge for the industry is that YouTube is too good and it is hard to get people to pay, especially if it is already on YouTube for free. Safe harbour is not intended for this."

Bay is optimistic that eventually the streaming audio market will pick up and the entrance of new players such as Apple or Google can only boost the market. "We believe that there is a lot of potential, with more people with mobile phones," he said. "The potential audience for legal music is very high. It could be some of the best times in the history of music. In the long term I am very optimistic. I do not think that Apple and Google will not leave room for others. There will be room for independents like us. I believe that as competition will grow, services will differentiate from each other. You have to take the long view in a business like that and I believe that it will be a very big business with millions of people subscribing."

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