Streaming Services & Smartphones: The New Audio Paradigm
The excitement around Pandora's IPO was not about following the fluctuating stock price or placing bets on the company's long-term profitability. It was about the attention it generated for the streaming music services that will help generate more opportunities for retailers to sell quality audio solutions.
Save for some affiliate programs and creative marketing deals, retailers can't make much money directly from the services, such as Rdio, Spotify, Rhapsody and MOG. But they can make money selling the headphones, speakers, components, attachments and mobile/home integration services that improve the sound of streamed music files over smartphones.
There's lots of room for improvement, which translates to lots of sales opportunities. But those opportunities will be lost unless retailers embrace smartphones and streaming services as THE new audio paradigm.
Two big factors are driving the opportunities. One, no matter how great smarphones are, the sound quality, especially when streaming music, is mediocre at best; it's thin, flat and void of nuances. That's a positive for retailers. The other positive is that close to half of your customers (tomorrow the number will be bigger) carry a smartphone with them at all times. Think of how excited you'd be if half of your customers walked into your store every day carrying an AV receiver sans speakers and components. It's the equivalent.
Second, in a few years most people will listen to the majority of their music through streaming services. The services are all evolving but strive to do to radio and the sale of downloadable music what Netflix did to video on demand and DVD rentals.
The best of them, like MOG (which I've become a huge fan of after Peachtree Audio's Dave Solomon turned me onto it) will offer consumers an intuitive interface to download any music they want to a handheld and/or the cloud, listen to it at home and on the go, create and access any type of "radio station," and interact with a varied group of fellow travelers.