The impact of music programming on the success of the subscription music model

It used to be you seldom heard about “curation” outside of a museum or art history class, but these days it’s a buzzword in the music press. With news of Spotify launching its browse experience, and Jimmy Iovine boasting about Beats Music and its playlists built by humans — particularly the celebrity kind — people can’t stop talking about curation as the next innovation in music services.

[![Jon Maples, Rhapsody](/content/images/2013/07/RhapsodyJonM_134-300x200.jpg)](/content/images/2013/07/RhapsodyJonM_134.jpg)
Jon Maples, Rhapsody
At Rhapsody, all we have to say is, “Welcome to the party!”

Curating music experiences is something that Rhapsody has done since its inception. As, our original charter was to curate the best legal MP3s on the web. Over the years, through features such as hand-programmed radio, mood and activity playlists, genre explorations, artist interviews, original audio and everything in between, we’ve explored the many ways a digital music service can integrate curation into our products.

Unlike our competitors, Rhapsody’s had real humans programming really great music experiences since day one – and not because we’re sentimental about the days of record store geeks and radio DJs. It turns out great curation is valuable to both customers and to the bottom line. As the streaming service that’s been hand-curating its catalog for over 10 years, we’ve learned a ton of lessons about the process. Here are a few.

It’s About Solving the Catalog Problem

Our core offering of a catalog of millions of tracks is great for today’s music customers. They want access to everything everywhere they listen to music. Still, nearly every single member I’ve ever talked to has said, “Sometimes, I just don’t know what to play.” Music is fun right? But what’s not fun is staring at the search box with no idea where to go next.

Curation helps fix that problem by recommending playlists and albums that you might like. We have a team that’s built thousands of these of these, which you can find throughout our suite of products, including mobile.

It’s About Creating Business Value

So okay, we know that curation solves a customer problem. But what about the business impact? One of the most important metrics for a subscription service is churn — the rate at which customers quit. Churn is important because acquiring new customers costs a fair amount of money; either in direct marketing, giving away expensive content or advertising. The sooner the customer churns, the more a service loses in sunk costs, plus you need to spend that money again to replace them.

Churn is a critical indicator of the health of any subscription business. We have teams that do nothing but think about churn. I’m sure some of my colleagues even dream about it. So what’s the number one indicator of churn? Inactivity — not using the product. It seems obvious, but if a customer uses the product more, they are less likely to leave.  In fact, we’ve found if we can get a customer to play more than 50 tracks a month, the churn rate drops in the double digits.

So we have worked really hard to keep our customers as active as possible and have utilized curation as a driver, so that every time our members fire up the service, they’re going to get something new to play.

We’ve rolled out our curation products where the customers are listening. Our Featured section is front and center in our mobile apps. Our curated playlists, stations, and posts are prominent in our browse experience. And our members tell us how much they dig them.

It’s About Discovery and the Repeat Play

We’ve seen that once a customer plays something, they’re more likely to play it again. So the song’s popularity extends well beyond the day it is promoted in our sites and apps.

We sampled a couple days of playlists we published in early July, and saw a 26 percent increase in playback of the songs in those playlists the week the playlist was initially published. This is to be expected as the playlists were featured prominently in our apps and throughout our promotional slots.

But what’s more interesting is that the month after the promotion, the plays are still 10 percent above the baseline. So the customer continued to play these songs well after the time of the promotion. Additionally, offline plays peaked three weeks after the promotion period, meaning that customers played the songs once, downloaded them to their device and enjoyed them later. That’s the value of a subscription music service exemplified: a customer discovers new music, saves it and adds it to their personal rotation.

Rhapsody Graph_Curation Piece

It Is About Variety

One thing we’ve learned observing usage patterns over the years is that music tastes are like snowflakes: no two people’s are the same. While it might seem to you like everyone in the world follows Pitchfork or watches American Idol, our customers listen across the gamut of music – new and old, mainstream and underground, even across cultural boundaries.

And our best customers listen to more than 200 subgenres a year, which is why we employ dozens of experts in hundreds of genres – great curation means speaking to a wide variety of tastes and interests, which is something we think we’re really good at. Just ask our huge base of regional Mexican fans, or all our subscribers who can’t get enough Bakersfield Country.

It’s About The Future

While curation has been around as long as people have created art,  our particular collection is relatively new. There have been some very good products that have defined curation differently and customers have noticed.

But we’re still early and it’s premature to declare any winners or losers. There’s so much that we all still need to learn in order to create awesome music experiences that are flexible, scalable and, most importantly, keep paying customers happy.