To ensure 8tracks can sustain itself with its current level of funding, we’ll introduce both limits on free listening and benefits for paid listening over the coming year. If a meaningful proportion of our listeners subscribe, and we limit the amount of streaming (and thus royalty expense) for ad-based listeners, we can return 8tracks to profitability over the course of the next year. Our average revenue per user (ARPU), on a monthly basis in the US, has trended at $0.12 our current 8tracks+ price point is $2.99, a 25X difference. Historically, we haven’t placed much emphasis on promoting our 8tracks+ subscription, but we believe it represents a big opportunity for revenue growth. However, the round is half of our $5m target for crowdfunding, likely not enough to fund the growth necessary to make the economics of a primarily ad-based internet radio model work in the US, given the prevailing royalty rates. Over the past four months, our community has rallied behind us, raising $2.5m to help power our future. (In Canada, this rate is one-tenth that in the US.) Our US royalty is the same rate paid by Pandora, which - thanks to its larger audience and sales team - brings in four times the ad revenue per hour that 8tracks is able to generate. On the other hand, in the US, we pay a high fixed royalty rate on a “per track, per listener” basis. As a result, it’s been difficult to generate a consistent level of revenues from one month to the next. We’ve found that when we lose ad deals, it’s typically because of our audience size. The ad model works best for a service with a large audience, as brands and agencies would prefer to work with relatively few apps or websites in a particular category so their efforts aren’t spread thin. We’ve historically relied primarily on the sale of advertising to generate revenue for 8tracks. We want to build a sustainable business that doesn’t require ongoing VC funding. Larger services have raised billions to fund continued losses, but even with our recent crowdfunding, 8tracks has raised only $5m over the last decade. So expensive that, to date, no digital music service is generating a profit. Streaming music on the internet is expensive. The problem: the economics of streaming music I’d like to take a moment to walk you through the background, our gameplan, and the impact on our community. Its interface is friendly enough and the user created database assures you there is always something to listen to.In the coming weeks, we’re going to shift our focus in the US to our 8tracks+ subscription model, including the introduction of a listening cap. It also comes in handy when you just don't know what to listen to. To sum it up, 8tracks Radio is a handy application to have music available at the press of a button to satisfy any mood or enhance any activity. Moreover, content of playlists unveils only as it progresses through. Unfortunately, playback options are only limited to play/pause and next song, with no easy way to listen again to a song that appeals to you. This is available for both playlists and individual songs.Īdditionally, the application gives you the possibility to make favorites accessible with a single mouse click, by having them pinned to your taskbar. These automatically go to a predefined folder, without further question or requirements. Save favorite playlists for later useĪt any point while browsing through the application's features you stumble upon a button that marks the current item as a favorite. You can either take advantage of the “Explore” function and look up music by categories, or check the dashboard of 8tracks Radio for the latest entries or top ratings. Available content is created by others who use this application, so you gain access to a constantly updating database.Ĭhoosing the right playlist for you is done easily. Everything is organized in categories so you are able to play songs for different moods, activities or occasions. The interface is cleverly simple to use, only a few mouse clicks being enough to get some sound to your ears.Īn integrated search engine makes sure you quickly find desired items. The concept behind this application is to put custom playlists at your disposal to enjoy without any commercials to interrupt you. With the Internet being home to all kind of media, it is needless to say that with an active connection and a specialized application like 8tracks Radio, enjoying an audio masterpiece is only done with a few mouse clicks. Nowadays we can take and listen to our favorite songs literally wherever we are.
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