In 2008, when Aza Raskin and his co-founders decided to call it quits on Humanoid and its best known product, Songza, they got themselves gigs at Mozilla, and they quietly sold the assets of the service to Queens, New York-based online music retailer, Amiestreet. In reality, that was the last anyone should have heard of the service that used to strip audio out of YouTube videos and stream it to the users of its music service.
Amiestreet, a cult favorite of sorts, was started by Elias Roman, Peter Asville, Elliott Breece and Eric Davich. They wanted Songza as their “night and weekend” project. However, by 2010, the writing was on the wall for them: the music buyer was going to want access to their music on all the devices, all the time.
Some surveys of their audience only reaffirmed what they were reading in the proverbial tea-leaves. It helped that all the legal hassels around the Internet radio royalty were getting resolved. In 2010, they sold assets and retail business to Amazon, allowing Roman and his cohorts to focus all their energy on Songza. Amazon is an investor in the company along with Deepfork Capital, a Silicon Valley-based investment group.
For nearly year and a half, they went into hiding and started working on an iOS app that was focused on music discovery. They launched the service in September 2011 with deep integration with Facebook . In March 2012 the company launched Music Concierge, first on the web and then on the iPhone.
It is a feature looks at the day of the week, time of the day, device you are using and everything they know about your lifestyle to suggest the things you need a soundtrack for. It’s the first feature you see when you open the iOS app or the website. Say you are feeling blue and it is Monday morning – well, there is a playlist for that. (Actually three playlists to choose from.) In the gym? Well, here ia a playlist of jock jams. Friday night and sitting at home with your spouse? You can pick a playlist for that.
Zero to a million in 10 days
Hmmm. Doesn’t Pandora already do that, you might be asking? The answer is yes and no. Yes, Pandora uses its magical algorithm and creates playlists based on the name of the artist you like or the song you want to listen to. Songza, on the other hand, uses humans — about 25 in total — to create playlists and then uses algorithm to help you discover those playlists. (By the way, Pandora used humans to build its music genome and then uses that to create the automatic playlists we like so much.)
Things were going rather well for them, but when 10 days ago, Songza launched an iPad app, everything simply changed. Songza’s idea of presenting mood-and-situation based playlists seems to have stuck a chord with the listeners. Songza currently is now the number one iPad app, not just music, and it is ranked number two in the iPhone app universe. In the process it has become the number one iOS music app for both the iPad and the iPhone. Today the company announced that there have been 1.15 million downloads of the iOS version of the app. (Songza also works on Kindle Fire and on select Android devices.) And if that wasn’t enough, it has been getting a lot of usage and happy users — over 100,000 of them are tuning in daily.
Roman thinks that the company is making money already — through advertising –but more importantly offering a platform-type service to bigger brands. Radio stations that want to offer a curated listening experience by tapping into their DJ artists can pay Songza money to use their platform and stream music in their apps. Powered-by-Songza is going to be a good business for the company, Roman argues.
Pandora vs Spotify vs Songza vs radio
When asked if they were competitive with Pandora, Roman was quick to add that they “compete for the same hours from listeners, and I would be hard pressed to say that they are not competition.” Others see them as a direct assault on Pandora’s existence. Rich Greenfield, analyst with BTIG Research, ranks Pandora a sell and is increasingly bearish on the company. He loves Songza and points out that being a mobile first app gives it a distinct advantage over Pandora. In a recent note to his clients, he wrote:
In many ways Songza’s simplicity and focus on mobile life reminds us of what drove Instagram’s success, as consumer web activity shifts far faster than expected from computers to mobile devices. Songza is focused on simplicity as it is built for a mobile environment, so listening only takes a few clicks, rather than having to type in the name of an artist letter-by-letter to start a playlist.
Yesterday’s WWDC news that Apple’s Siri is being integrated into the car illustrates how Apple is leveling the playing field for music applications in the car. While Pandora issues one or more press releases a week talking about their car integration, Apple enabling Siri in your car means voice commands will enable easy navigation of your smart phone apps (Songza, Spotify, Rdio, Pandora, etc), eliminating Pandora’s current integration advantage.
It is fairly easy to assume that this is trouble for Pandora, but one has to put things in perspective. Much of Pandora’s growth came from the company’s ability to launch mobile applications. I can’t remember if I have actually heard Pandora on the web — it is either on my mobile phone or one of my Internet enabled music devices. Are Songza and Siri a challenge for the company? Absolutely. Are they going to kill Pandora tomorrow? Probably not.
Pandora by the numbers
Pandora had 53.9 million active users at the end of May 2012 (vs 51.9 million at the end of April 2012) and they spent 1.1 billion hours listening to music on the service in May 2012, up from 1.07 billion hours in April 2012, thanks to more device makers and car makers embedding Pandora into their platforms. The advertising revenues are still on an upswing. The fact remains that Pandora and more apps like Songza along with services such as Rdio are going to continue to take “attention” away from traditional radio. Even the car makers are preparing for a connected future where Pandora, more than terrestrial or satellite radio, starts to become part of in-car listening experience.
The way I see it, Songza too is part of a greater trend of siphoning attention away from current established formats — satellite and terrestrial radio. And yes, if they keep adding 3 million people a month, then not just Pandora but Spotify too is in trouble.
When asked if he competes with Spotify, which has dabbled with algorithmic and social discovery of music, Roman said no, they don’t. I am not so sure. I think all these apps (and services) are duking it out for our ear — and it doesn’t matter what we do, there is still only 24 hours in a day.
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