Thursday, June 3, 2010

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Music Startup Rdio Kicks Off US Launch: A Chat With Founders And Management Top
We’ve written about digital music startup Rdio a bunch in the past, starting from when we found out Kazaa, Skype and Joost founders Janus Friis and Niklas Zennstrom were involved in setting up and funding the business through their investment firm Atomico Ventures . We noted how they were silently assembling a killer team , and took notice when an early iPhone app landed in the App Store that nobody was able to access yet. This morning, the company finally unveiled its strategy for the first time, and opened up a preview version of the service to users in the United States on an invitation-only basis. We had a chat with Friis, CEO Drew Larner and COO Carter Adamson about the idea behind the service, the business model, future plans and some history. Adamson explained to me that Rdio was born out of necessity. The founding members of the company looked around the digital music space and saw a lot of shortcomings on the market, specifically in terms of pricing strategies, portability, seamless playback and social sharing abilities across devices and issues with music discovery. Rdio aims to solve all those problems with one single service and two fixed pricing plans. Time is ripe now, they claim, because of the increasing proliferation of capable smartphones, more stable and faster networks worldwide, people getting accustomed to all-you-can-eat pricing models and paying for applications, and so on. We’ve heard that before, of course, including from many startups who’ve tried their hand at bringing music sales and distribution into the digital age – and most have failed spectacularly in doing so. Most of the coverage of Rdio’s launch was focused on its subscription-based model. Basically, you can gain access to more than 5 million songs online for $4.99 a month, or $9.99 a month if you also want to be able to access your music collection from your mobile device. Apps for the iPhone and BlackBerry are on the way, with an Android version also scheduled for release ‘very soon’. The service is being launched in the US first, then Canada, the UK and parts of Western Europe later on. Management is hopeful that the international roll-out will be carried out largely before the end of this year, but declined to discuss specific launch dates. What’s been left out of most coverage is that Rdio also doubles as an à la carte store that could potentially rival with Apple’s iTunes and Amazon’s MP3 store. That means you’re also able to purchase individual songs and albums through Rdio and download them to your computer. It will be interesting to see if Rdio can stand its ground against juggernauts like Apple and Amazon, but also other Web giants like Google, Yahoo, MySpace, Microsoft and eventually, Facebook. Not to mention the likes of Rhapsody, Spotify, Pandora, Napster and We7. If Rdio fails and becomes another Joost rather than another Skype-like story, it won’t be because of lack of content. The company has licensing deals in place with the world’s largest music labels – EMI Music, Sony Music Entertainment, Universal Music Group and Warner Music Group – along with a number of independent aggregators of digital music. But the unique thing about Rdio, Larner and Adamson told me, is the social element. Users will be able to not only stream and download songs, but the whole experience revolves around activity streams, which is core to the service and enables people to discover music through what their friends are listening to and buying. There’s also some basic integration with social networking services like Twitter and Facebook. Rdio also offers recommendations much like iTunes does with Genius, by algorithmically learning which music you like to listen to. Users can also discover music by browsing category rankings and playing artist-based radio channels, which serve tunes from similar artists as well. Also compelling is that Rdio offers a small desktop app that serves as a basic music player but also scans a user’s iTunes and Windows Media Player history. That way, Rdio can check if the music you play on your computer is available through their service based on metadata and build your catalog based on your history, so you don’t have to start from scratch. This only takes seconds, Adamson explained. I asked Friis if he took any lessons from his Kazaa days, which notably are almost a decade behind us. Surprisingly, he told me that the relations with key people from the music industry, which he developed throughout the whole litigation process and namely the settlement procedures, were key in getting Rdio off the ground in the first place. In many ways, it seems like they wouldn’t have been able to seal the licensing deals that are in place now and are needed for Rdio to become a sustainable venture if it weren’t for Friis and Zennstrom’s history with Kazaa and the music labels. Funny how that goes. Friis also took a lot of lessons away from Joost, the failed online video venture that the pair started a couple of years ago. The two businesses can not really be accurately compared apples to apples, Friis says, but he did learn a number of interesting things from the whole adventure, which he wouldn’t get into further because it would take him too much time. Friis told me that he will divide his time between Rdio, Skype and other commitments, but that he has been and will remain closely involved with product strategy and more. Zennstrom will focus more attention on Atomico Ventures, although both he and Friis have personally invested in Rdio along with the (undisclosed amount of financing) that was contributed by Atomico. Expect a full review and more screenshots of the Rdio service soon. CrunchBase Information Rdio Information provided by CrunchBase
 
The Founders Behind Diapers.com Launch Soap.com: "All The Robots Are In Place" Top
Marc Lore and Vinit Bharara have figured out a formula for selling low-margin goods online and shipping them overnight to customers. The two entrepreneurs have built Diapers.com into the largest seller of diapers and other baby products on the Web. Diapers.com is on track to bring in $300 million in revenues this year. Now the two are getting ready to launch a new e-commerce site, Soap.com. . It will sell much more than just soap. When it launches in July, Soap.com will offer 25,000 products—daily essentials ranging from cleaning supplies to toothpaste. By the end of the year, it will offer 60,000 different products, all at the same price you’ll find at Target or Wal-Mart, and about 25 percent less than at a typical drugstore, with free overnight shipping for orders of $50 or more. The overnight shipping is key because when you run out of toilet paper you can’t really wait around three days for your order to arrive. The parent company, Quidsi, raised $30 million last year which they’ve been using to prepare for the launch of Soap.com. It will use the same warehouses and facilities that Diapers.com uses, and the same back-end inventory, logistics, and shipping software. The company recently moved to new fully-automated warehouses on both coasts, and now has 2.5 million square feet of warehouse space ready and waiting. “All the robots are in place,” says Bharara. They will pick and pack your soap and get it to you by the time you take your morning shower, or at least by the time you get home from work. Here is a cool video showing how those robots give Quidsi a competitive advantage: CrunchBase Information Diapers.com Soap.com Information provided by CrunchBase
 
The Star Wars Kid Is Back and He's Going to Be a Lawyer Top
It was eight years ago that Ghyslain Raza slashed his way into our hearts with his Star Wars Kid video. Sadly, Raza suffered from severe bullying and abuse for his video and eventually ended up in a psychiatric ward for children. However, his video was seen 1 billion times and multiple thousands of geeks came immediately to his defense. While those must have been the worst years of his life, things are now looking up. He and his family sued the kids who leaked the video for $250,000, settled, and that seemed to be the end of it. Now, however, Ghyslain just became the president of the Patrimoine Trois-Rivières , a heritage society dedicated to conserving his hometown in Quebec. He's also working on law degree at McGill in Montreal.
 
Yahoo Chief Architect Raymie Stata Promoted To CTO Top
Raymie Stata, Chief Architect at Yahoo has been promoted to the role of CTO and Senior Vice President, according to a post on Yahoo’s corporate blog. Stata will replace former CTO Ari Balogh, who left the company in April. Stata joined Yahoo in 2004, and has led a number of significant tech initiatives across the company from re-imaging its technology stack, to spearheading search and advertising development work and architecting the company’s private cloud. Prior to joining Yahoo, he founded Stata Laboratories, which he sold to Yahoo in October 2004. Prior to founding Stata Labs, Raymie worked at the Digital Equipment Corporation's Systems Research Center, where he contributed to the AltaVista search engine. He was an Assistant Professor of Computer Science at the Baskin School of Engineering at UC Santa Cruz, and has collaborated with the Internet Archive. Stata will report to chief product officer Blake Irving. Stata recently participated in TechCrunch Disrupt, where he served as a panelist and awarded Art.sy with the Rookie Disruptor Award. It’s nice to see talent actually staying at Yahoo, considering the growing number of executives and early employees have left over the past few months. CrunchBase Information Raymie Stata Information provided by CrunchBase
 
As Twitter Starts To Crack Down On In-Stream Ads, Ad.ly Turns To MySpace Top
In-stream advertising network Ad.ly, which launched last year, is moving beyond just advertising on Twitter today. The startup just announced a deal with MySpace to allow the social network’s members to insert in-stream ads in their activity streams. Terms of the deal were not disclosed. Ad.ly, which will continue to advertise on Twitter, links up advertisers with users and then distribute links to marketing campaigns through the user's tweet streams with full disclosure. Ad.ly's recently launched self service platform platform enables Advertisers to connect with any user who signs up for Ad.ly’s service. So for example, an advertiser for Dell could choose which Twitter power-user to pitch their ad too and then submit a bid to a particular user. The publisher then approves or denies the request. Once the publisher approves the Tweet, the message is sent out via their account by Ad.ly. Beginning today, MySpace publishers can visit this site on the network to sign up with Ad.ly and create a profile. Once registered, publishers can decide which messages from advertisers they want to support and Ad.ly will deliver the approved messages into the activity stream, similar to the arrangement with Twitter. MySpace feels that Ad.ly is a prime opportunity to allow others, particularly musicians, filmmakers and celebrities on the network, to monetize off of their stream. This isn’t the first time that MySpace has inserted ads into the stream. The social networks began inserting ads in-stream earlier this year. But the deal with Ad.ly is one of the first with a third-party in-stream ad network. It’s interesting that Ad.ly has engaged in a formal deal with MySpace (where we’re assuming there is money exchanging hands). We’re assuming that Twitter doesn’t have a similar monetization deal Ad.ly but after COO Dick Costolo’s announcement last week, this may change. Costolo addressed Twitter’s long-term strategy and updated TOS last week, which was thought to ban in-stream ads and affect in-stream ad networks like Ad.ly. However, Ad.ly was quick to respond that their service does not violate Twitter’s TOS and will continue to operate as is. Ad.ly founder Sean Rad echoed these sentiments to me, saying that the new TOS do not affect Ad.ly. Regardless of where Twitter goes with banning ads in the stream, Ad.ly is wise to diversify its network beyond Twitter, which seems to be figuring out its own monetization and advertising strategy. And armed with $5 million in new funding, Ad.ly should be ready to improve its product with new features and iterations. CrunchBase Information Ad.ly Information provided by CrunchBase
 
Google Confirms Invite Media Acquisition, Brings Bidding To Display Ads Top
Google confirmed reports from yesterday that it acquired Invite Media , a bidding exchange for display advertising. Google did not disclose the amount of the deal, but Peter Kafka at MediaMemo pegs it at around $70 million . Today on the DoubleClick blo g, Google explains what the startup does: Invite Media has developed technology that enables advertisers and agencies to use "real time bidding" to buy display ad space, and to optimize display ad campaigns, across multiple advertising exchanges, all in a single interface. Google is a big proponent of realtime bidding. Its search keyword advertising is priced based on an auction model. Invite Media brings auction pricing to display ads by giving advertisers a mechanism to ” tailor their bids on an impression-by-impression basis, based on their own data.” Last year, DoubleClick launched its own Ad Exchange , which will work now work hand-in-hand with Invite Media’s technology. There is no doubt that Google wants to take the best parts of paid search ads and bring those economics to the world of display advertising. The question remains, however, whether auctions benefit the advertisers or publishers more. It all depends on how much bidding there is for a specific ad slot. My guess, though, is that there is so much inventory that market pricing will have the effect of pushing average CPMs down because there is no scarcity when it comes to online advertising. CrunchBase Information Invite Media Google Information provided by CrunchBase
 
Spotify Already Has 30,000 U.S. Users – So Why The Launch Delay? Top
European music startup Spotify has all its "ducks lined up" for a U.S. launch, we've heard from multiple sources. It has servers ready to go in the US and, crucially, users already there, even though it has not yet officially launched. It fact it has 30,000 users in the U.S., according to the chatter coming out of the Stockholm tech scene where the company has its main development arm. But these users are being kept quiet. So why isn't Spotify launching in the U.S. right now?
 

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