Startups are the DJ’s of music streaming

I love me a controversial headline! Admittedly it’s a bit deceiving, but before the pitchforks appear and my DJ friends oust me, let me explain.

When Soundcloud started back in 2007 it’s whole premise was to get content on their platform. So, they enlisted DJs and producers to add their mixes and original (initially unreleased) productions to the site. The DJs and producers shared these uploads with all their fans, which in turn brought a lot of traffic to Soundcloud.

I was one of these early adopters and loved the fact that I no longer had to burn mix cd’s but could rather send a link to a friend or fan, via email. It saved me money but more importantly time. I was very driven to promote my mixes this way, so I praised and inevitably promoted Soundcloud.

Ultimately that’s every company’s goal. Create a product where your users, members or subscribers do the promoting for you.

Today, streaming services don’t have that same initial problem of content. They all pretty much offer 30 million songs. What they do struggle with is getting users on board and converting them to paying customers. Its made more complicated because there is a lot of competition and they all offer very (read — almost identical) features.

So what can these streaming services do, to get that same level of community and commitment from their users?

Well, like the title suggests — Enlist the startups.

I don’t mean any old startup of course, but the ones focusing on music tech. It’s these 3rd party developer startups that are creating great products that work on top of these streaming services.

Sure you can run a great campaign with a celebrity, and sign up a bunch of new users. But that never should be the long term play, because those same users will just as easily move to the next platform that does a better campaign and better offer — they are not your loyal users and influencers.

These startups are your loyal users and they are actually driving innovation. They are also the most motivated and invested in promoting the music streaming service they work with — they are your brand ambassadors and influencers!

Music streaming services need to become profitable and if these startups can bring a whole new audience and contribute to that goal, isn’t it a no brainer?

To give you an example. Our music app Muru just launched, we have yet to do any marketing for it. Despite that, we are already seeing some very interesting metrics. At the moment our app only works with Spotify and to use it, you need a Premium account. We do not have a special promotion for Spotify Premium or a direct funnel to get anyone to sign up to Spotify.

43% of free Spotify users that downloaded our app, clicked a “Get Premium” button we created. It does nothing more than direct them to the Spotify website, but imagine what we could do for Spotify if we had an incentive?

Another interesting metric is that more than 50% of the people that downloaded our app, actually didn’t have Spotify at all. A shame for us, (until we integrate with the other streaming platforms), but a wasted opportunity for Spotify.

Like the DJs did for Soundcloud in the early days, it’s the startups that have the potential of adding real value to streaming platforms today.

Spotify was the first to offer this kind of 3rd party access, which I think is a big reason for their success, but even they are not fully embracing the potential as I mentioned above. The same goes for Apple Music. Streaming services are treading with caution which is understandable, but a good vetting system, to ensure all guidelines are followed and the quality is high, is not hard to implement and the upside is huge.

Now is the time to embrace these startups and make them a part of the ecosystem. Let them be your brand ambassadors, influencers and instigators, for they hold the keys to an audience you can’t reach!

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