After graduating from Vasser College in New York with a major in English Literature, Carter Adamson (below right) began working on Total New York, one of the internet’s first local guides. Since then, he’s put together an impressive resume, working at Kazaa, Skype and AOL. In Australia to promote the Rdio music streaming service he co-founded, Adamson sat down to watch his beloved New York Giants win the Super Bowl with Current.com.au editor Patrick Avenell.
Starting with your time at Kazaa — did illegal downloading and piracy help modernise the music industry?
It happened very quickly and I don’t think anyone was prepared for it. For the past 10 years we’ve been through all these fits and starts with digital music — we had to go through DRM and tethered CDs — but always the core proposition to consumers has been about mobility. A lot of piracy was done because seamless mobility wasn’t there yet and the right price wasn’t there yet. Now it is finally possible for you to subscribe to services that allow you to pull down music, TV, movies and books — wherever you are, on whatever device you’re on and whatever platform you’re on, for a very low price.
Why come to Australia so early in your international expansion?
We prioritised what we viewed as the key countries first, so when we looked at Australia, we saw a country obviously with an amazing tradition and catalogue of music, and we saw Australia as a country of early adopters. There’s great smartphone penetration here and already digital music revenue comprises 40 per cent of the entire revenue, and it’s only growing.
Adamson says the music industry has always trailed the playback device industry, with the labels having to adapt to vinyl, then cassettes, CDs and now digital formats. With internet speeds now capable of instant playback without interruptions, he says any device that can talk to the internet is a playback device, and that labels must move swiftly to service the consumers that already have.
Australia has quickly become a crowded market, with Rdio joining Samsung, Sony, JB Hi-Fi and rara.com. Have you checked out this competition?
We’ve taken a look at them and we feel what we are offering leads beyond what anyone else is offering, both in terms of the catalogue and the experience.
Everyone forgets that VoIP was an incredibly competitive and crowded market — we had Apple, Google, Microsoft, Yahoo! and tonnes of start-ups in the space — what got us [Skype] out so far ahead of the pack in the end was our ability to deliver the best experience.
Samsung and Sony are marketing their services very heavily to their handset customers — so the challenge for Rdio is to get those customers to use a third party program. Adamson reasons that because all these services are very similar on face value, with the same number of tracks, comparable streaming quality and offline playback, the difference is in discovery.
It’s incredibly easy and fun to discover new and old stuff you have forgotten about. The team we have in place at Rdio — many of us from Skype — and the engineering team is from imeem, which was the largest streaming music service in the world, so we come with a great deal of experience. We’ve actually done business with most of the telcos and carriers around the world, so our ability to actually execute a truly global music service is better than the others.
Rdio’s ‘Share’ feature lets you post what you are listening to on Facebook and Twitter, or email it someone you know. I think Ping and us are the only ones that are natively baked into Twitter, so you can play it in Twitter, you don’t have to go to Rdio. And Facebook we’ve done the same integration, so you can see what your friends are listening to.
Top: How Rdio's Twitter application will appear in one's timeline (It may be a regional or teething issue, but it took several attempts to get this player started). Bottom: Artist Radio, in which Rdio will generate a playlist based on the selection of a single artist, in this case, Coldplay.
A common hesitation for consumers of music streaming is data costs. A lot of the fun of music streaming is lost when you have to plan your offline playback to ensure you don’t accrue excess usage charges.
In other markets, Rdio has worked with telcos including Oi (Brazil) and Telus (Canada). Adamson says these types of partnerships make the last three feet much easier, as the service can be tied into the carrier’s billing system and handsets can be delivered with the application pre-loaded. Adamson said Rdio has spoken to the major telcos in Australia, though he said couldn’t go into details.
Telstra told me that “We have met with [Rdio] previously, although not recently. We're not working with them on any projects at this time”. Over at Optus, the message was: “We do not comment on external meetings and rumoured products and services”. Vodafone did not return our calls.
One of the key drivers of iTunes’ success has been gift cards, which have generated revenue for both Apple and retailers. Although an Apple spokesperson could not provide any information about sales, saying “I don't have access to such sales figures”, Current.com.au understands that like all gift cards, they are a particularly valuable source of revenue, as it is cash up front and not all are redeemed. I asked Adamson if Rdio had similar retail packages.
We do sell packages in Target stores in the US — we have gift cards at the end of the aisles in the music section — and we’re doing something with…I can’t say [Adamson actually stopped himself revealing his Australian partner at the last second]. We’re doing something along those lines with a very big partner soon.
Why are there price discrepancies between Rdio’s US service (US $4.99/$9.99) and its Australian service (AU $8.90/$12.90)?
I don’t do the deals so I’m not intimately aware of what the negotiations entailed, but I will say that our prices are the result of discussions across many different rights holders, and it takes a long time to balance the various interests of the parties involved, and the prices that we have are in alignment with what the rights holders felt like was the right price for the market.
Finally, Adamson said the Rdio team is working on a next project: a TV and movie streaming service called, appropriately, Vdio.