FROM: Tim Davis
RE: Pandora vs. The All New iHeartRadio (and Spotify)
DATE: October, 2011
There’s been a lot of attention paid to Pandora over the last few years, and the new iHeartRadio service has clearly been designed as a strong alternative with the addition of its version of custom channels. And now other music sites and services are looming, too, including Spotify. So, in an effort to help you wade through the who, what, when, where, and why of these services, here’s a look at them with some analysis that will hopefully help you better understand what’s available to your audience.
If you would rather not wade through the complete analysis, there’s a convenient “Pro/Con” box that summarizes the good, the bad, and the ugly in a single, accessible way.
Some Key Features
To be fair, I've logged many more hours experimenting with Pandora than I have with iHeartRadio's or Spotify's services given their relative recent arrivals. But here are some thoughts about each service.
With iHeartRadio's new "create a station" feature, one can see why it might be referred to as a "Pandora Killer." Pandora's stock price has certainly taken a beating since the June IPO, and some of the worst of it was on the days iHeartRadio and Spotify announced that they would provide custom stations.
But as Tim Westergren pointed out at the recent RAIN Summit, he’s not worried about Pandora’s future. And Pandora has a major advantage because of its head start. In our recent Techsurvey 7 study, we learned that more than one-fifth of our core radio listeners tune in Pandora on at least a weekly basis.
Further, however you look at it, neither iHeartRadio nor Spotify has the current ubiquity of Pandora. Sure, Spotify has an early entry into the car dashboard (albeit as a beta product on 2011 Ford Fiestas), but otherwise, neither service is as readily available on your TV, DVD player, Roku, nor car dash (http://www.pandora.com/#!/go/auto) as Pandora currently is. But Clear Channel, as we know very well, has some big advantages with its radio/media footprint and Spotify has excellent buzz.
Each of these services feature solid mobile apps and they all integrate with Facebook on some level - especially Spotify, which is officially a Facebook partner and has rolled out new (albeit controversial) features during the recent F8 Conference (see our blog). Pandora has developed a stronger affiliation with Facebook with their recent site re-launch, and iHeartRadio requires a Facebook account to use the service (their FAQ says they are looking at other options as well, but our inquiries to them about timeframes went unanswered).
Spotify's custom station service is still very much in its early stages. I didn't love the experience, and honestly found it confusing at times. It's not as robust or usable as Pandora's or Clear Channels offerings as of yet, and it's nearly impossible to find the feature on their platform at present.
As for Pandora, there are two versions (free and paid) with the former having limitations on how many tracks you can skip and it also has commercials.
iHeartRadio will likely be the bigger Pandora competitor in the near term simply because it has the brand name awareness of an already existing service, it’s backed by the largest broadcaster on earth, and has a major mobile presence supported by those stations.
iHeartRadio at last count has 34 million app downloads with about 50 million listening hours per month, while Pandora logs over 100 million users and over 600 million listening hours a month. So Clear Channel has some catching up to do. But don’t count them out. Here’s why:
Clear Channel offers a library of music that is ten times larger than Pandora’s. In addition to the thumbs-up/thumbs down approach, they also rely on their in-house research and the insight of their programmers (whether you call it biased or just smart, we'll leave that up to you) to compete with the personal rating factor in Pandora’s Human Genome Project.
iHeartRadio's custom station feature will also be commercial free through the rest of the year, according to the company.
Pandora = Simplicity
I've used Pandora via my browser, through my iPhone, on Android devices, and frequently via my Samsung DVD player and on a Roku. The beauty of Pandora is its simplicity - enter a song or artist, after a few occasions of indicating "thumbs up" and/or "thumbs down," most of the channels are about 95% solid. Although I still find the occasional outlier song that raises an eyebrow.
To really tweak a channel, however, you have to go to the Pandora site, log in, and then dig deep to find your profile information. Here you can supplement a channel with additional artists or songs. This is great, and is unique to Pandora... when it works. At its worst, this creates a schizophrenic mix of music that is unlistenable. At its best, it creates a great experience. However, more often than not, I was better off before adding another artist.
I'm probably one of only 5% (or less) that actually goes that far into the Pandora system. By and large, according to blog posts from Pandora's Tim Westergren, most users simply log in, create channels built around a single artist or song, and then leave it alone (other than rating songs). Simplicity embodied.
Hands On With iHeartRadio
iHeartRadio, like Pandora, works seamlessly across the web site and the mobile app. I used the site extensively, but since the growing trend is more and more toward mobile, I spent most of my time with the new iPhone app.
The new interface is a significant improvement over the previous layout- and that's with an entirely new feature added to the mix.
It's dumbed-down and clean. While it does offer two things from the launch (asking you choose to "find a radio station" or "create your own station") which goes against many UI/UX rules for mobile apps, it's still very clear, and the navigation is simple. Yes, I got the app to crash multiple times (I'm very good at that), but overall it's not only a significant UI upgrade, but the addition of the custom station feature is a clear selling point.
Fundamentally, the Custom Radio Station feature of iHeartRadio is as simple as Pandora’s - just enter an artist or song title and go. From that point you can easily access your existing stations, look at what your friends are listening to via Facebook (which they reported at F8 will become a bigger feature in the near future), or invite friends.
|Creating Your Own Station in iHeartRadio - Easy as 1, 2, 3!|
On the web site there's a list of "Featured Stations" and below that is a "Hottest Stations" list that's sortable by genre. The genres don't break down much further than simply Rock, Pop, Jazz, World, Christian, etc. - so Country's "hottest" will contain anything from Dolly Parton to Darius Rucker, just as you will find Mumford & Sons alongside Queen, David Bowie & Florence + The Machine under Rock's "hottest" but it's further than Pandora goes in terms of highlighting what others are listening to (a very "radio" approach to marketing music - which we like).
As noted previously, Pandora lets you add spice and flavor to your stations by adding another artist. iHeartRadio’s approach is actually a bit easier to grasp and won't wind up with the musical train wrecks created by Pandora. There's a slider on the web site and a cool knob/gear interface on the iPhone app that allows you to select either "Familiar Artists," "Mixed Tunes" or "More Discovery" (a feature they call "Discovery Mode")
This worked very well in my trials. It was a great way to reach beyond the basics of artist selection without violating the sensibilities you sought by choosing that artist or title. Yes, it's a step beyond simplicity that Pandora has mastered so well but it's subtle, and for true music lovers, it's a welcome addition.
By and large Pandora, Spotify, and iHeartRadio work equally well in their role as a computer driven jukebox playing music that approximates your taste/mood of the moment and hitting you up with a reasonably good selection. The addition of the "Discovery Mode" to iHeartRadio, however, is a winning feature that for the die-hards could make a big difference. Jacobs Media has seen from research in the past that the term "discovery" is a huge selling point for music heads. The concept of "discovery" is the basic premise behind the wildly successful NPR Music portal.
The nuances of the various settings (Mixed vs. Discovery Mode) aren't entirely clear, but they do make a difference, and broaden the canvas considerably based on our time spent listening.
A key question that time will answer is how well your likes/dislikes will play into the overall flavor of a given station. The results are fairly time-tested with Pandora, and at present all that is shown with iHeartRadio when you click the thumbs down is "You dislike this song, we won't play it again on this station" or if you click the thumbs up, you get the message "You like this song. We'll try to play more like it." (As usual, you are limited to six skips per channel per hour.)
Where iHeartRadio breaks even further from the formula is the inclusion of over 750 live terrestrial stations you can access (and they are now adding radio stations outside of the Clear Channel family). You can find them by location (in your app and on the site it will tell you which stations are closest or enter a zip code) and by format. Obviously, Clear Channel has some big name stations in their portfolio covering most of the United States' major markets and key formats.
You can add these "real" stations to your custom station list and have them all show up in a single location in the app and on the site.
The new interface to the app makes this process much easier and cleaner than it was previously. I was not a big fan of the previous layout. I found it buggy, tough to navigate and a bit slow. The ratings on iTunes can speak more to this than I ever could. The new version is much improved in usability and function over the previous efforts.
To sum it up…
Who Will Win?
Honestly, that's a loaded question.
First, it assumes there's not room for two (or more) custom channel streaming services. There are already dozens of these types of services available, and many of them do pretty well for what they are.
Second, Pandora has such a huge head start in the space that to predict their failure would be short-sighted. Will they be impacted? It would be safe to assume that in terms of listening hours and active users the answer is yes. How these competitors will affect Pandora's revenue is the real question.
Bottom line is that iHeartRadio has an interesting product that compares easily with what Pandora is offering - in some ways better, but some of those advantages (local/terrestrial radio streams, discovery mode) also add complexity and potential confusion. There's also no clear answer as to how the monetization of the service will impact the Customer Experience. Will it become cluttered with spots and bad promotional announcements (even pop-ups)? Will this version of the app, over the long-run, prove to be as buggy and complaint-riddled as previous incarnations?
Additionally, will Spotify, and their relationship with Facebook, combined with an "all you can eat" on-demand platform supersede both offerings? Spotify is aggressively pursuing expansion and marketing. And you have to wonder where Apple is going with its iTunes Match service, and whether an on demand/streaming platform, as has been rumored, is still in the works. And don't count Rhapsody out yet. Here in the U.S. they are more than double the Spotify audience base, and also have announced various Facebook integrations.
One thing is certain – a big part of this battle will be waged in the mobile space, rather than within web browsers. And getting the services into car radios, on to consumer electronic devices (TVs, DVD players, etc.) will also be crucial to Clear Channel and the other contenders.
Let us know how our review matches your experience.