Music streaming service 8tracks just signed a few licensing deals with independent music labels to make playlist creation much easier. As a reminder, 8tracks true advantage lies in its community — the service is all about creating playlists and sharing them so that you can find the perfect music depending on your favorite genres and current mood.
“Historically, DJs on 8tracks have been primarily relying on SoundCloud streaming or their MP3 collection — it’s been a bit of a drag,” founder and CEO David Porter told me. “This our first foray into direct licenses. It reduces the friction when you create a playlist.”
Currently, when you create a playlist on 8tracks, you can find and add songs either by searching SoundCloud or by uploading files from your computer. But there are a few issues with these options. First, many people are ditching iTunes in favor of subscription-based streaming services like Spotify or Rdio — they don’t have MP3 files on their hard drives anymore. Second, SoundCloud provides a free API, but doesn’t have solid metadata and can start charging for this API. And sometimes, SoundCloud removes copyrighted content if a song wasn’t uploaded by the content holder.
So 8tracks had to find a way to rely less on these APIs and boost playlist creation numbers. The company signed licensing deals with independent labels and aggregators INgrooves, CD Baby, Dim Mak and DashGo. Overall, the new music library features 6.5 million songs already, and this is just the beginning as the company plans to sign deals with major music labels as well. “The longer game is to have a complete library of content,” Porter said.
Now, you can just search for an artist or song and see if it’s in 8tracks’ catalog. If it’s not available, the other options still work. Another new feature is the crate. When you favorite a song on 8tracks, it will be added to your crate, a personal repository of songs that you like. This new feature will help turn active listeners into DJs.
Behind the scene, things won’t change much. Like heavyweight competitor Pandora, the company already operates under a particular radio-like license, meaning that it pays fees to content holders every time someone streams a song.
With today’s new approach, the company will pay that fee directly to the record labels rather than SoundExchange, the entity that handles royalty collection for services like 8tracks or Pandora. It will cost more or less the same for the company. 8tracks has been profitable since 2012 and now has an in-house ad selling team.
When I asked Porter whether it was easy to sign those deals with content holders given that many music labels want to get rid of the free tier of streaming services, he told me that music labels were enthusiastic as 8tracks is all about music discovery. And it’s true that you can’t just search for an artist or song to stream it like on Spotify. “We are Switzerland — we don’t have any intention to be a full on-demand service,” he said.
Today’s move was also motivated by 8tracks’ shift to mobile. Evidence of this lies in listening hours — two-thirds of the service’s 30 million monthly listening hours are on a mobile device. “Given the shift to mobile consumption, we thought we needed to have a mobile creation approach,” Porter said. In the fall, you will be able to create playlist directly from the mobile app. As more users create playlists, it should make the service even more compelling for passive listeners who just open the 8tracks app on their phone.