Tuesday was Apple’s annual October launch event, which includes the introduction of the new iPad Air, retina iPad Mini, OS X Mavericks, updated Macbook Pros and a newly designed cylindrical Mac Pro. Although I was excited to hear about all the new and updated products coming from Apple, I was most interested in discovering how iTunes Radio had performed in its first month on the market. Apple’s CEO, Tim Cook revealed that 20 million users have played 1 billion songs in iTunes Radio’s debut month. This is quite an accomplishment, but still pales in comparison to Pandora’s 72 million monthly active users. (Pandora has recently surpassed 200 million overall users.) The question on everyone’s mind is whether iTunes Radio is a threat to Pandora’s market share.
iTunes’ entry into the predictive playlist market pits their 27 million songs under license to the hand-crafted 1 million song library of Pandora, whose “music genome project” involves one or more music technicians rating the song against a matrix of attributes, so that each song has its own genetic code, so to speak. An individual song may have as many as 4-500 “genes”, which are used to categorize the song and weigh its similarity to other songs. The results are then fed into a listener’s queue, with each song “liked” by the listener further improving the queue.
iTunes has the advantage of starting with their customers personal song libraries, which in my case would be several thousand. While Pandora takes the boutique approach of weighing and analyzing each individual song, iTunes Genius appears to be largely driven by algorithms, and one suspects a similar algorithmic approach is at work here. iTunes Genius (and presumably iTunes Radio) tracks volume and crowd behavior, while Pandora is committed to the concept that musical products do, in fact, have unique genetic signatures that can inform future listening choices. Two approaches, with two very different styles. At least, I think they’re different since iTunes Genius classification system remains a corporate secret. iTunes Genius clearly wins the quantitative battle, but ultimately, what really matters is which system is going to put the songs I want to hear in my queue.
So, what does that mean for advertisers in general, and political advertisers, in particular? If you’re online, you need to be on Pandora. It’s really that simple. In a recent campaign, we noticed our click-through rates were ten times higher than what we were seeing with online banner ads. Advertising on iTunes Radio is currently unavailable. (Except for Apple’s iTunes Radio launch partners) The first quarter of 2014 should be interesting, as the general public begins advertising with iTunes Radio. Is iTunes Radio the Pandora killer? Not likely, since it’s only operating on Apple products while Pandora is everywhere. Besides, this market is more than capable of supporting the two, and thus it’s doubtful to see one falling off the map any time soon. One additional thought: when and if iTunes Radio is open to political advertising, will they screen contrast (i.e. negative) ads as they do in the rest of the Apple world?
From my first month of using iTunes Radio, I’ve noticed a lot more diversity on my stations. This was not exactly what I was looking for. People listen to the radio to hear the songs they love. On the plus side, my “Arcade Fire” station has really started to mold to my taste over the last month.