Dealing With Facebook/Pandora's Online New World Order
Tom Webster On What the Deal Means To You
April 26, 2010 at 12:19 PM (PT)
The ramifications of the FACEBOOK/PANDORA deal has been put into stark detail by EDISON RESEARCH's TOM WEBSTER in a column on The Infinite Dial. Basically, WEBSTER predicts that the two online powers will likely become the preeminent source for music discovery.
"Essentially, FACEBOOK has created a giant 'like' button for the web, and is closing the loop on all the data associated with expressing preferences online," WEBSTER wrote. "...Search engines are already preparing for the next generation of search -- prioritizing links from your network -- and FACEBOOK has jump-started the process by making your friends' 'likes' around the web part of their social graph, and your social data stream.
Music discovery in America has reached another inflection point ... the future will likely be increased (online) consolidation, cooperation with former rivals, and aligning yourselves with Facebook's rivals (Google, for now)
They Get The Data ... And the Eyes And Ears...
"If you are a site that is built around proprietary social tools, like LAST.FM, you just got served. If your path to revenue was monetizing a social network around books, or music, or anything else, you are going to be faced with the prospect of forcing your users to "like" things twice (maintain profiles on your site as well as FACEBOOK) which only the hard core fan would ever do. FACEBOOK has made things easier for users, but a whole lot harder for competitors.
"PANDORA hands over the reins of user suggestions to FACEBOOK's Open Graph, and in exchange, when people share links on FACEBOOK about songs or artists they like, those links are increasingly likely to be PANDORA links. FACEBOOK captures the data, PANDORA captures the ears ... Setting aside the privacy implications, for most people this integration is going to be a good thing.
... And Everyone Else Gets The Crumbs?
And for everyone else trying to cash in on the web? "The future for online radio (both for terrestrial broadcasters AND for online-only streamers who are not part of this master plan) just got a little murkier," WEBSTER concluded. "With the near-total commoditization of music online, playing music is essentially like trucking wheat. The only way to grow in that business is scale.
"Having already leapfrogged everyone else on mobile phones, PANDORA is set once again to leapfrog its rivals by getting in bed with what is increasingly everyone's home page on the Internet. As shared links to "liked" songs become the new currency of music discovery online, PANDORA and FACEBOOK may have just done an end run around everyone in the online music space, and there probably isn't anything you can do about that.
"Music discovery in AMERICA has reached another inflection point. For broadcasters of all stripes, the future will likely be increased (online) consolidation, cooperation with former rivals, and of course aligning yourselves with FACEBOOK's own rivals (GOOGLE, for now). It also wouldn't hurt to accelerate your plans to load up those wheat trucks with something besides music..."