Last FM was just sold for $280million to CBS. This is evidence that those of us in the music recommendation field for the past 5 or 6 years have been on the right track. It also means…
… The race is on!!
There is room for several more winners in this space. Not every company in it will survive however. Each one has their own unique business model so finding the right path forward is key. Judging by today’s news it’s clear that building your own music-related community is what is most valuable to radio companies like CBS. It makes sense. They need to evolve with the changing landscape and they need to attract younger listeners. Last.fm will provide CBS with a whole new channel to the new radio consumer. Radio companies that do not build or buy new Internet or satellite channels (like Slacker) will be left behind in this new-media world.
By that logic, one would assume Pandora and MyStrands will be the next companies to be acquired. Not long after that the next wave of companies in this space to be acquired will be those that do music search, recommendation and discovery as a third party application for music retailers and community portals. The companies that are able to show the most improved music consumption results and high consumer satisfaction by keying into users’ personal tastes will win the day. The companies that best understand how to help the user find the needle in the haystack; those few songs out of the millions available that touch the soul of any given individual will be the most valued.
In my opinion, the tough road ahead is all about proof of concept. I’m not talking about proving the recommendation system works. I’m talking about generating real-world sales lifts for real customers and making a revenue generating business out of it. I’m talking about generating recommendations that consumers believe in and feel are valuable. It’s still too early to judge most of the companies in this space. Some business models are still taking shape and real-world results that are big enough and convincing enough to be considered an attractive acquisition are still just over the horizon.
Platinum Blue is in this race and we’re giving it everything we’ve got. While the road has its obstacles and daily frustrations, I’m pleased with our progress. In under a year and a half since leaving our former company in this space and starting Platinum Blue we’ve been able to put in place a very talented team, some amazing partnerships, strategic investors, technology deals and contracts that give Platinum Blue a number of advantages. What’s more, we’re not in the race alone. It’s not Platinum Blue vs every other company out there in this space, all competing for the same acquisition deals. We’ve formed partnerships with former competitors and we’re committed to helping our partners succeed as well; and that’s another important distinction.
It’s exciting to think about where this is going and navigating a company like ours through the current music industry and business environment is exciting for our team. But when it comes down to it, it’s about the music and that’s why almost everyone I know in this space got into it in the first place. We were frustrated with how music was discovered and how much good music out there was being overlooked and not enjoyed to the extent it could be. We saw how many people who were avid music consumers became disenfranchised and no longer knew where to start when looking for something new to enjoy.
Regardless of how this shakes out business-wise, the end result will be that millions of people will be able to enjoy more music in more ways and it is so worth it and so rewarding to be a part of the movement of dedicated and passionate people in this space driving toward that result.