Google Play is now offering Canadians access to 25-million songs for $9.99 a month, but Songza ‘s CEO explains how streaming music can remain free…
Less obtrusive and even, perhaps, useful, native advertising can blend with a user’s experience to create an ad supported service that isn’t annoying, says the CEO of one of the world’s largest streaming music services.
Songza CEO Elias Roman was in Toronto recently to attend Canadian Music Week and talked to John Yorke for BNN’s “The Street”.
Roman says the days when a consumer is served an ad they have absolutely no connection to are fast ending. That’s being replaced, he says, by ads that are not only targeted to the proper person, but can actually serve a purpose.
“For us ads can’t just be informational or transactional, they have to have utility,” says Roman. “We use seven different data points to predict what you are doing and then serve the expertly curated playlist that will make that barbecues or workout or nap or cocktail party better.”
Songza serves ads in traditional ways, such as displayed on the side of playlists or rolled out before the content, a la YouTube. But it’s native advertising that excites him the most. This means allowing brands to pay Songza to “help that brand make whatever their customer is doing, or intending to do,” he says.
Recent Songza sponsors include Febreze, which created soothing playlists called “Sleeping Soundly with Febreze” to promote its Sleep Serenity scents, and WestJet, which sponsors vacation themed playlists. In the U.S., Nissan, Taco Bell and Samsung have thrown their respective hats in the ring.
Making ads work on Songza may ultimately become a key differentiator for the company, which competes against paid for services. Last year, Roman told Forbes writer Eric Jackson he thinks the company has unlocked the code to monetizing its user base without alienating it.
“Historically, users have viewed ads as a necessary evil of free services, as something that is at odds with the ideal user experience. We’re changing that. We’re in the business of lifestyle-enhancement and we’ve created a way for our ads and advertisers to also work towards that goal,” he said. “Instead of serving traditional audio ads that interrupt your workout, an athletic apparel brand on Songza can own the ‘Working Out’ activity, complete with branded playlists that immediately deliver a motivating energy boost to the listener. This is native advertising. It grabs user attention by matching the form and function of the current experience, in this case listening to music, and actually improving on what the user needs it for right now…”
Songza was first of the notable streaming music services, the others being Pandora and Spotify, to focus on Canada. The site launched here on August 7, 2012 and after 70 days had hit one million downloads. Investors paid attention: the company recently received a cash injection of $4.7-million dollars from the likes of Amazon and Justin Bieber’s manager, Scooter Braun.
Songza, however, now faces stiff competition from the likes of Google, which last week launched Google Play Music, a service that gives access to 25-million songs for $9.99 a month, in Canada.
But the space as a whole might be growing fast enough to accommodate several offerings. While Songza is free, consumers are showing a willingness to spend for premium services, something that will without doubt key the attention of potential advertisers. Subscription-based music services revenue topped a billion dollars last year, up more than 50% from 2012.