Less Spotify, more Pandora – We7 shifts focus to more economical 'Internet Radio Plus'

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Navigating the choppy waters of ad-supported music, We7 hasn’t been afraid to change course. The UK startup began life as an innovative free music download service before transitioning to an on-demand browser-based offering. While most recently the company, which is backed by Peter Gabriel, Eden Venture and Spark Ventures, made a premium paid-for play with a desktop and mobile version sans-advertising.

Today, We7 is shifting focus once again in the belief that the route to mass market requires a lean-back experience more akin to Internet radio services like Pandora in the U.S. rather than a pure on-demand play such as European competitor Spotify. It’s also a model that sits more comfortably with We7’s ad-supported aspirations since music licensing fees for Internet radio are about a third of that charged for non subscription on-demand services.

The new service and strategy, dubbed “Internet Radio Plus” (a name given the seal of approval by recent We7 users, 10,000 of whom were surveyed on the issue), came about after We7 quietly rolled out a simple radio function in January this year. Without any marketing push, by September more than 55% of tracks on the site were being accessed through the radio feature rather than on-demand, says We7 CEO Steve Purdham. “This is a massive hint on how people want to listen to music.”

After that initial experiment, the company has concluded that what the majority of people want is the simplicity, no effort required, aspect of traditional radio – press a button and listen – with the personalisation opportunities that on-demand offers. Purdham summarises this philosophy as “entertain me but let me have control when I want it”.

On that note – no pun intended – We7’s new Internet Radio Plus focus will begin with ‘Loved Radio’, a personal radio channel that can be created at any time by the user pressing ‘love’ on an artist, song, album or playlist. These choices will then influence what is played going forward. It’s not a new idea but one that certainly fits with my own online listening habits. Additionally, users can share their ‘loved’ station with friends via Facebook, Twitter or through email.

More innovative, however, is that personalisation will also go beyond music to include spoken audio with News, Entertainment, Sport, Weather and “a series of yet to be announced innovations”, building on the news bulletin feature that We7 rolled out in conjunction with GMG Radio back in July. Better still, the company plans to evolve Internet Radio Plus to eventually allow users to include a news alert if anything happens with a chosen football team, for example, or related to other personal interest areas. Now that would be truly personal.

We7 is also keen to talk up the advantage of all of this personalisation and music residing in the cloud, meaning that in theory it can travel with the listener and be accessed from anywhere. A direct quote from the press release reads: “What defines an individual’s music tastes is not their CD or download library but the metadata about the music they like and when they listen to it”, which I think sums up quite nicely the opportunity that We7 is now embracing.

But let’s not forget the economics of all of this either, which we’ve touched on already. Rightly or wrongly, the Internet radio model, which imposes arcane rules such as how many tracks by the same artist can be played sequentially etc., has a different royalty rate to ‘on-demand’. And that’s music to Purdham’s ears.

“I have to admit that this positive consumer shift to radio streams does benefit the economics of the We7 financial model”, he concedes. Although he also notes that Internet radio fees are still more expensive than traditional terrestrial radio.

So, yes, along with feedback from users, economics has clearly played its part, which along with Pandora’s growth in the U.S., “made it one of those no brainer business decisions”, says Purdham.

It also, perhaps conveniently, moves We7 slightly further away from comparisons to Spotify, which remains very much an on-demand play. Who then is We7’s closest competitor now? “Standard radio services listened to on the Internet”, says Purdhmam.

But what about Last.fm?

An “obvious choice”, but Purdham argues that the CBS-owned Internet radio service appeals to a different audience than We7, “such as the early adopter tech savvy music obsessives who are looking for discovery, whereas We7 is my mum, sister, wife, daughter and son.”

Instead, “becoming the Pandora plus of the UK and Europe would be a great aspiration to have”, he says.

  • http://www.psonar.com/ Rob

    It’s interesting to see the options that the different services offer, and how the are evolving. Services like We7 and http://www.psonar.com are trying to become more social or personalised as people realise that music is very much a personal taste.

    • http://www.soundtrckr.com Daniele Calabrese

      Guys did you check out Soundtrckr? http://bit.ly/nearbyradio on the iPhone, Windows Phone 7, Nokia and soon on Android. Geosocial internet radio, mobile and web Free wit 8M songs available international!!! Enjoy it

  • http://jetlib.com/news/2010/11/10/less-spotify-more-pandora-%e2%80%93-we7-shifts-focus-to-more-economical-%e2%80%98internet-radio-plus%e2%80%99/ Less Spotify, More Pandora – We7 Shifts Focus To More Economical ‘Internet Radio Plus’ | JetLib News

    […] Read the rest of this entry » […]

  • http://lushfun.com lushfun

    Let the commoditization begin thats where its heading. Might be better for consumers if more competitions is in there, I am sure there will be integration between radio and other products to see the marginally improved combo working.

  • Dave

    Don’t overlook Jango – I’ve replaced spotify with this web based radio service…the personalisation features are great. (www.jango.com)…We7’s “love” feature seems creepily similar to what Jango already does.

    • Steve O'Hear

      I think the ‘love’ feature is similar to tons of services, but it’s the insertion of spoken word (news etc.) which is potentially innovative.

      • Francisco

        The love feature sounds to me like that feature that worked way back in the early web 2.0 days called digg, then called like by others and love by last.fm… nothing new.

  • Ibn

    The personalisation features of Aupeo (www.aupeo.com) is awesome. Try their mood radio

  • http://www.guidegoods.blogspot.com Edwin

    Nothing beats Pandora

    • Steve O'Hear

      But Pandora pulled out of the UK years ago.

  • http://twitter.com/captaink99 Suresh Kumar


    This is all very well.

    But pandora couldn’t broadcast to Europe or UK due to excessive license arrangements.

    Does this pave the way for pandora back in the UK??????

  • http://www.calendargod.com Leon Crutchley

    Loving the new feature- maybe I’m lazy but finding new music on spotify has been too much effort recently!

    • http://www.soundtrckr.com Daniele Calabrese

      This is the reason why we opted from day one for internet radio. A lean back experience especially on mobile is what people are really asking for

  • http://www.ankurb.info Ankur Banerjee

    Last.fm too had a ‘loved tracks’ radio available ONLY for subscribers, and they are shutting it down on 17th November because “the licensing fees were too high”. If Last.fm found it uneconomical with their scale, how will We7 fare any better?

    And, BTW, Spotify is not just on-demand. It has a radio feature too. That’s the beauty of it! You can have a ‘lean-back’ experience, as well as satisfying the urge of listening to particular track/album/artist if a user so wants.

  • http://wyar.org Gary King, Heritage Radio WYAR

    We are a Non-commercial Educational station with a format called, The American Musical Heritage, featuring original recordings from the turn of the century through the 60s+ We are competitive with many Commercial stations in the Portland area. We are looking for the most economical way to stream our programming. Parts of our vast musical library might be made available to other “Love” type services in return for the free streaming & licensing of our basic program feed which is a 24/7 operation. We are open to ideas.
    Gary King
    Heritage Radio Society Inc.
    WYAR-FM 88.3

    • Francisco

      Your best bet is Radiotime.com. Just add your stream and you will be able to reach most mobile devices, TV, Roku and cars around the world… They also will list you in the local dial. I bet you are already listed there if you have an available stream.

  • http://eu.techcrunch.com/2011/01/11/spotify-who-we7-to-launch-first-in-ireland-next-week/ Spotify who? We7 to launch first in Ireland next week

    […] terms of what We7 will offer: despite pivoting somewhat recently to emphasise its more economical ‘Internet Radio Plus’ model – more akin to […]

  • http://www.wordsaboutmusic.co.uk/01/2011/industry/understanding-choice-bring-music-streaming-masses/ Words About Music. Streaming Music, importance of choice | Words.About.Music

    […] playlists and radio stations that are one click away from starting. Your eyes are drawn to the recently launched ‘Internet Radio Plus’, tempting you to push a station in the right direction by choosing your favoured artist. It may be […]

  • http://eu.techcrunch.com/2011/03/07/we7-launches-free-personalised-radio-app-for-android-offline-playback-supported/ We7 launches free personalised Radio App for Android – offline playback supported

    […] pivoting somewhat to focus on the more economical Internet radio model, the UK’s We7 has launched a new, […]

  • http://eu.techcrunch.com/2011/04/14/spotify-the-american-dream-and-why-freemium-is-a-broken-record/ Spotify, the American Dream, and why freemium is a broken record

    […] a different royalty rate to a pure on-demand service. Another Spotify competitor, we7, has just switched to the Internet radio model, claiming that’s how mainstream users want to consume music, although it’s convenient […]

  • http://eu.techcrunch.com/2011/06/21/we7-secures-new-funding-for-european-expansion/ We7 secures new funding for European expansion

    […] also believes that We7 has found the right mass market formula too with its Internet radio Plus model, which provides a more lean back experience akin to traditional […]

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