Tuesday, June 11, 2013

Bloom.fm responds to Apple's iTunes Radio announcement

UK: With the recent announcement of Apple's iRadio service, Bloom.fm, the world's first £1 a month music subscription service responds with CEO and co-founder Oleg Fomenko's thoughts:

"After listening to this evening’s much anticipated launch of Apple’s new iTunes Radio service, here are a few thoughts on what it really means for our industry and UK consumers.

"We all love Apple; their devices are amazing and they have changed the way we all think about and interact with the digital world. What they have achieved through creating a vibrant & successful music download market through iTunes is also to be hugely admired. However, is iTunes Radio really going to be a game-changer?

"Streaming radio is not a new concept and, as expected, it’s an ad-funded model. Apple’s vast user-base will undoubtedly guarantee healthy traffic and as such the service will be an attractive proposition for advertisers, but will this create significant and sustainable revenue for rights holders and artists? We’ve heard talk of the major labels securing attractive deals and healthy revenue shares from Apple but the stand-alone viability of an ad-funded model still remains to be proven.

"Everyone agrees that the £1 per download model is in-decline and that £10 per month streaming subscriptions have failed to gain mass-market traction. Streaming radio, expensive on demand subscriptions and paid for downloads do not reflect how people consume music today. They want total control over what they listen to at an affordable price. The combination of restricted streaming radios and paid for downloads doesn’t satisfy this need, neither does the standard £10 per month on-demand services.

"Apple has avoided the potential cannibalization of its iTunes sales with this new offering. iTunes Radio might well be a useful tool to maintain iTunes download volumes but there is nothing new for consumers here. This is all about selling more downloads and more devices, which is perfectly fine but let’s not kid ourselves that it will change consumer habits or the fortunes of the industry.

"The £1 per track download model has driven many to music piracy and a reliance on free on-demand sources of music like YouTube. We believe that owning music is actually an inconvenience and we want to get more people paying for music again. For £1 on Bloom.fm you can get our entry-level monthly subscription, which gives you access to 20 songs of your choice, to enjoy and swap when you fancy something new. It’s a much more natural way to enjoy music.

"On a positive note Apple’s marketing muscle will raise the visibility of streaming radio and although it is not introducing anything new, we welcome the role it will play in education. It looks like the true innovation in digital music will have to continue coming from young companies that don’t have a legacy business to protect. At Bloom.fm we’re focused purely on giving music fans the best possible music experience on their phone and creating an attractive proposition for mass-market consumers, rights owners and artists."

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