Brands (and Agencies) Give a Spin

A Long Way From a Business Model, But Has Brand Attention

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Brands are already starting to pop up on the hot social music service du jour: No, not Spotify, the even noisier startup making its U.S. debut, but, the came-out-of -nowhere music service, still in beta, that allows users to play music for their friends as virtual DJs.

As the digitally obsessed continue to flock to the service -- it's attracted more than 400,000 users in two months, according to AppData -- there are already rooms called "Pepsi" and "Pepsi Max," which appear to be placeholders with no DJs or attendees just yet, a Threadless T-shirts outpost and a room for Electronic Arts. Groupon customer support has carved out a room too. So have New York Times Digital, Gizmodo and Gawker.

Cable network Bravo, which has been notorious for testing out new services like Foursquare, last week spun Bell Biv Devoe's "Poison" for a small room of listeners.

While these efforts are hardly major corporate outposts and, likely, just employees testing out the new service internally, it's the first sign that brands are paying attention to the social music site. So far, just like everyone else on the site, those brands are setting up for free.

Ad agencies such as BBH, Attik and CP+B Miami are hosting their own rooms, too. Ian Schafer, CEO of Deep Focus, was dropping Tune-Yards tracks in that agency's room earlier today. Just a short perusal turns up rooms for other agencies like DraftFCB, Arnold , Rosetta and Ogilvy. is the latest startup from Seth Goldstein and Billy Chasen, the founders of now-defunct and not-at-all related Stickybits. Mr. Goldstein declined comment for this story. Considering Turntable is brand-new and still in beta, it's unlikely that hammering out a business model is yet a top priority. The company hasn't announced venture funding beyond what's remaining from Stickybit's previously raised $2 million.

Give Turntable time to blossom and all that , but here's the problem: The reigning streaming music services haven't really been able to float a successful free-to-consumers, ad-supported advertising model. Exhibit A: Pandora.

Pandora CEO Joe Kennedy just said that his company's service, which went public last month and is the No. 2 most downloaded free Apple app of all time, is having trouble wrangling enough advertising to support its massive mobile usage. Pandora has accrued losses of $92 million since 2000; its costs continue to climb because of higher licensing fees for the music. was recently certified by the American Society of Composers, Authors and Publishers, a performing rights organization that collects royalties, and reached an agreement with music licensing company BMI. So as more beta users sign on and it preps for wide launch, too will have to pay licensing fees, but with no revenue model in place.

One feature gap playing to its advantage: Turntable isn't mobile. Pandora, which sees 60% of traffic from phones, is fighting for ad dollars in a relatively tiny market -- U.S. mobile ad spending is expected to top $1 billion for the first time this year, according to eMarketer. While that represents explosive growth, it's still peanuts compared to digital ad budgets in general.

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