Former SVP and Head at Sony Pictures Entertainment suggested that data and measurement company Nielsen’s new brand, Nielsen Digital Audience Measurement (Nielsen DAR), is “probably the closest thing to a currency” as it allows advertisers to make decisions on whether they should move their money to over-the-top (OTT) platforms. He continued by stating that while the company offers insights into the digital market, businesses like Roku and Amazon have refused to open up their platforms to Nielsen DAR, which could prevent the company from improving its methodology. The specialist also expressed concerns about Roku’s approach, saying that although it is currently a “major player in [the video] space,” the real question is where the company will stand in a year once publishers “start taking [their] inventory back.” The former SVP at Sony Pictures Entertainment believed that Apple is going to “blow a big hole” in the digital video sector, especially after hiring Jamie Erlicht and Zack Van Amburg, “the top two… producers of content… in Hollywood.” This, coupled with its significant budget and audience size, could enable the company to create its own original content.
Competition between the music streaming industry and traditional radio has been questioned by a former EVP at iHeartRadio, who declared that radio is “much more robust, and has done a much better job maintaining its place in the media diet” than previously projected. He noted that iHeartRadio could struggle with attracting younger listeners who tend to use digital incumbents such as Spotify. While he suggested this could be an issue for iHeartRadio in the future, the former EVP stated that the company is “in a class of one” because other broadcasters such as Entercom, Cumulus and other regionals do not have “anywhere near the investments or infrastructure that iHeart has access to.” A specialist at MBMG Media echoed this sentiment, saying iHeart has positioned itself uniquely by hosting local “branded concerts” and targeting a “female audience,” which could allow it to compete with other entertainment companies. He explained that the bankruptcies of Cumulus and iHeart have not heavily influenced his ad-buying decisions as his short-term motivation is finding the “best, most efficient way to reach [his] clients’ target audience,” which can be achieved through radio networks that target a particular demographic.
A Lead Independent Director and Chair of the Audit Committee at Pandora Media expressed concerns regarding Spotify’s launch in India on 26th February 2019. He noted that if the company were to employ the free model, supported by advertising revenues, then low audio advertising rates could make India a “very tough market…” However, he expressed optimism towards the subscription model, stating that “a service such as Spotify should be of advantage to [users in India] because it can cut across the upper-middle class,” making the country a “pretty good marketplace to play in.” A former Director of Digital Business and Products at Sony Music Entertainment agreed that Spotify would have a higher chance of success by marketing itself as a “premium product in the music business” like Apple Music, saying that the “revenue will be there.” However, the former Director explained that “profitability is [still] very, very unsure” for Spotify even if it were to market itself as a premium product. He attributes this to piracy, which still makes up approximately 40 to 50 percent of the market in India, suggesting that Spotify would have to take a long-term approach and would likely only see profits once it had “a huge amount of paid subscribers.”
The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.
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