Who Plays DJ in the Digital Age?
With 80 percent of music fans still discovering new songs through terrestrial radio, Jimmy Iovine's new Daisy streaming service will try to counter by blending "math with emotion."
This story first appeared in the June 7 issue of The Hollywood Reporter magazine.
Jimmy Iovine isn't known for subtlety. The Interscope Geffen A&M Records chairman and co-founder of Beats Electronics declared at a February conference: "There's an ocean of music out there, and there's absolutely no curation for it." His forthcoming music streaming service, code-named Daisy, is an attempt to prove that he and his team of experts can program your iPod more effectively than Pandora's or Spotify's algorithms. It's the latest entrant in the escalating battle to control how music fans discover and consume their favorite artists in the digital age.
Daisy is the result of Beats' $10 million July acquisition of MOG a music subscription and streaming application that boasts superior audio quality and licenses with all the major labels. When it relaunches later this year, the service will combine the algorithmic curation of Pandora with the tastes of a radio program director, DJ, promoter and music fan to handpick songs and group them in labeled categories.
"Music gets treated as a big pile of bits, and we really see the artists, the context, the story," says Daisy CEO Ian Rogers, a digital veteran going back to the earliest days of Yahoo Music. He was selected by Iovine to launch Daisy, along with Nine Inch Nails frontman Trent Reznor, who serves as chief creative officer. "What fans want is actually not every song in the world in their pocket; what they want is something awesome to listen to," adds Rogers.
That mantra evokes the old-school job of a radio programmer or disc jockey who chose what songs to spin -- as opposed to today's method of programming preset playlists nationally, as Clear Channel does across its 850 stations. And that's no coincidence. Despite the advances of digital downloads, streaming and Internet radio, 80 percent of music fans still discover new songs through terrestrial radio, according to a study by Latitude Research and OpenMind Strategy, and some 94 percent of 13- to 17-year-olds say they tune in weekly.
With that in mind, Daisy is poaching a high-ranking Clear Channel executive, who'll be tasked with overseeing a sort of editorial board of tastemakers that will choose what music to play. In essence: Now that consumers are more familiar with subscription services (Daisy's pay model has yet to be determined), Iovine's team wants to combine the breadth of a Spotify-sized catalog with a professional, human-curated element. An announcement is expected in the coming weeks.
By the time Daisy is introduced in late 2013, the marketplace of music services will be more crowded than ever. Apple is expected to soon introduce iRadio, its own Internet radio service, as Google already has with the May 15 launch of Google Play Music All Access. For $9.99 a month, Google Play users can stream songs a la carte as well as listen to a channeled playlist, a la Songza, which has made significant inroads by offering curated playlists with categories like Indie Apartment Party, After Work Chill-Outs and Stoned in the Park.
Human vs. algorithm is essentially what's at issue. A service like Pandora, which counts 200 million registered users and 2.5 million paid subscribers and recently saw quarterly revenues rise 55 percent to $125 million, relies more on the latter. A user types in an artist's name or a genre and Pandora pulls from its own database of licensed songs, matching instrumentation, tempo and melody among some 400 musical attributes to determine what the listener might like. On the flipside is Spotify, which puts millions of tracks at a user's fingertips and lets them do the choosing.
"Initially consumers were enchanted by all the choices they had … now they've realized there's so much out there and it's hard to sift through the chaos," says Robb McDaniels, CEO of INgrooves, the biggest digital music distributor in the U.S. The solution, he offers, is "professional curation" -- an antidote to technical curation (algorithms and recommendations like those of Pandora) and social curation, where what your friends are listening to comes into play.
According to Rogers, who cautions that he doesn't "want to give away too much of what the product is," Daisy will feature "some really unique approaches that pull together algorithmic intuitions along with the human touch." Reznor calls it "intelligent curation," while Iovine has described it as "math with emotion."
Despite the buzzwords, some worry that "professional curation" is just another way of saying that major labels and corporate minions are trying to influence trends and tastes online, as they have with traditional radio. "I like that everyone [online] has the same chances, that you don't have to be the chosen one by a record company or a radio station, you can still make it," says electronic dance music star David Guetta. At the same time, he understands the value of curation: "It would be good to have a better system that could help you understand and discover music in that same genre."
An upside to all these competing services is that streaming has proven a deterrent to piracy. In Sweden, for example, where subscription services have been most successful, illegal downloads fell from 47 percent to 23 percent in 2012, according to a study by the Media Vision Group cited by digitalmusic.org.
As these companies sew up licenses and build customer lists, many industry players agree: If anyone can move the needle on popular music, it's Iovine, Reznor and Rogers.
"There's no clearly defined path anymore," says McDaniels. "So any tool that can help bring order to that chaos is something that will probably be successful."
Top Digital Music Services
As streaming grows in popularity, so have the user bases for these providers:
Pandora: 200 million users, 1 million songs
Spotify: 20 million users, 20 million songs
iHeartRadio: 30 million users, 15 million songs
Rdio: N/A, 18 million songs
Rhapsody: 1 million users, 11 million songs
*Worldwide; THR sources