Tiny Songza Tries Different Approach to Music -- and Ads
With fewer than 5 million users, it's a minnow among big fish like Pandora, Spotify and Clear Channel's iHeartRadio, as well as presumed giant iTunes Radio.
But Long Island City, N.Y.-based Songza has built a buzzy little existence with an entirely different take on a music service. You don't pick songs or albums at Songza. Indeed, there are none to be seen. Instead, you pick a mood, an activity or a state of mind. Tell Songza what you're doing and a staff of 50 DJs, musicologists and music nerds give you three playlists to choose from.
"Our objective is serving users' needs for what they are doing right now," said CEO Elias Roman, 29. "We view ourselves as that thing that makes what you are doing better."
The idea is that some listeners simply don't want to pick their own music, or have an algorithm choose. "We can create really fun content that no algorithm will understand," he said.
Mr. Roman also has his own ideas on the ad experience. Rather than interruptive radio ads, Songza sells custom playlists and collections of playlists called "moments" along with banner ads and pre-roll video ads that target them. Samsung, for example, wanted to sponsor a "back to college" category of playlists including "College Dance Party," "Strutting to Class," "Lying on the Quad," "Studying with Friends," and "Campus Romance." Each list has three options, including one from Samsung itself that comes with an offer: Try a Samsung Galaxy Tab 3 with 12 free months of Boingo Wireless Hotspot Access.
Similarly, Taco Bell is sponsoring playlists around times when you just might be hungry. Songza's technology determines when to offer the playlists based on day, time, device (iPhone or PC?), location, past consumption and those with similar taste. The brands aren't interrupting the music -- they're sponsoring moments, like a cocktail party, a morning run or afternoon in the office cubicle. "If you remove the branding, it needs to be something we would have done anyway," Mr. Roman said.
Is it enough to standout and attract users in a crowded market? Matt Britton, CEO of youth-focused agency MRY, isn't so sure.
"The idea of creating music based on mood is akin to a filter feature on a camera; nice to have but ultimately something that can be easily replicated by the likes of Spotify or iTunes," he said. "Millennials also like ultimate control and customization, which the Songza model lacks."
Pandora has shown how tough it is to run a profitable ad-supported music service while paying music license fees for web streaming and Songza's ad business is still nascent. But the startup raised $4.7 million in August to figure out what a native-ad experience looks like in radio.
Songza isn't the only service programming moods, not music. Fuse TV's 8Tracks.com similarly curates playlists by mood or occasion. But digital music may not be a winner-take-all market. The question is whether Songza's bespoke ad model scales and whether it can survive in a land of giants.