Today Omnifone made the move from B2B2C music service provider to consumer facing brand with the launch of their streaming music service Rara, which is being operated as an entirely separate company utilising Omnifone’s technology infrastructure. The knee jerk reaction would be that this is bandwagon jumping in an increasingly cluttered streaming market, joining the likes of Spotify, Deezer, We7 and Juke. But the folks at Omnifone have been in this business long enough to not simply pursue a me-too strategy. Indeed differentiation is at the heart of the Rara strategy.
Targeting the mass market
Regular readers of this blog will know I have long argued that the paid digital music market is stagnating because it hasn’t got the tools to reach beyond the tech savvy music aficionado base it has addressed so far (mainly through iTunes). Spotify’s recent US-and-Facebook -spurred growth has been encouraging but we are still talking about single millions of premium subscribers globally, most of whom are the same aficionado segment all other services have been chasing for the last 10+ years. If digital music is ever going to break out of the confines of the few per cent of consumers per market that will pay for those services a new go-to-market strategy is required, as is a new series of music products.
This is where Rara come in. They’re not bringing the new product (it will be years before anyone gets the licenses for the required next generation products from the record labels) but they are bringing a new approach to customer acquisition and a new approach to user experience.
Two key differences in approach
Rara’s target is unashamedly the mass market, the consumers the digital music bandwagon is increasingly leaving behind. Rara uses two key tactics to reach these customers:
- Changing the funnel. Spotify (with whom most people will rightly or wrongly benchmark Rara) use their free ad supported tier as their customer acquisition funnel. The losses associated with supporting free Spotify users is their customer acquisition cost. Rara’s funnel though is a combination of traditional marketing tactics (which will be backed by substantial marketing spend) and an innovative pricing strategy. Taking a leaf out of some magazine subscription models, Rara gives consumers an introductory 3 month price of 99p / 99c which automatically switches to the full rate at the end of the period. If this approach works, it will enable Rara to separate the wheat from the chaff, with prospective valuable customers self-selecting by submitting their payment details to get access to the heavily discounted rate. The conversion rate for these consumers should be much higher than for ad supported free users (many of whom sign up simply to get free music).
- Changing the experience. Digital music services and players are notorious for looking more like accountancy software than they do music software. The ‘music collection as excel spreadsheet’ is a paradigm we have all grown used to. But there in lies the rub. Most of you reading this will be savvy users who have grown to tolerate a series of inherently poor user experiences. For the digital hold outs this just serves as another reason not to go digital. Rara takes a different approach, giving users a highly visual experience, with colourful graphics and mood-based playlists at the core of the service. Of course you can still dive into the excel spreadsheets but you can quite easily never need to.
Rara’s approach is not a radical departure, rather a series of welcome innovations on the current model. Critics will argue that it is ‘just another streaming service’. But streaming is the delivery vehicle for the experience rather than the product itself. Think of streaming like cable TV infrastructure, and services like Rara, Spotify and Deezer as the cable companies that package channels over them.
Rara isn’t *the* answer to the music industry’s woes. No single service is. But with a fair wind, it could well become an important part of the answer. The music industry desperately needs the mass market brought into the digital fold. It needs more fresh thinking like Rara’s to help achieve that.