The ultimate customer pain of online music streaming: ads. The ultimate problem for online music companies: how the hell are we going to make money?
Ad interruptions bring heavy frustration to online music streamers. I recently created a mock campaign for Snickers for my Brands and Culture class that leveraged Snickers' rebrand as a 'snack' with the music streaming cultural trend. From our research, it was apparent that among all forms of streaming(tv, movie, music, short clips), ad interruption during music streaming was by far the most frustrating(at least among the millennial sample) to consumers.
Pandora has created a platform for advertisers where brands can embed muted content in replacement of an album cover, which allows ads to run without audio disruption. At first I thought this could take away the customer pain, but was skeptical about the actual results of the marketing. Would people really look at this and subconsciously make an emotional connection between the brand that's being displayed and the song they love? What if it's a bad song? Will this affect the artist's brand, and will artists ultimately lose awareness from this? Well apparently, a few brands, including Lexus, took a shot in the dark and it paid off: "Lexus saw brand favorability jump 13 percent while awareness increased 10 percent and purchase intent 5 percent." That's awesome, assuming their Pandora marketing was a major contributor to these stats. It was unclear from the article if these stats were already directly linked to Pandora marketing.
I would assume other music subscription services like Soundcloud would be following Pandora's innovaion very closely. Soundcloud's ads for their free service currently include banner ads (like Pandora's), AND audio interruption. If Pandora's model pays off, could muted content the industry norm for the free version of music streaming services? Only time will tell.