The Promise of Daisy
Project Daisy, a developing music streaming service, has been dubbed by its creators as the new standard for the future. But, until recently, much of the details regarding the differentiating features have been withheld. Built on the MOG platform and founded under the Beats Electronics umbrella, the venture is headed by CEO Ian Rogers and Chief Creative Officer Trent Reznor. By partnering with Topspin, Project Daisy plans to integrate music discovery and artist connection into a streaming service, allowing fans to simultaneously discover music and connect with and support talent. This feature alone stands to bring direct-to-fan marketing to a whole new level. With the mass appeal Beats can bring to the table, the new service could grant musicians access to a huge consumer base.
Following the major success of its headphone line, Beats Electronics recently broke into the streaming industry with its purchase of MOG, for which it paid $10 million.1 After the acquisition, Jimmy Iovine, CEO of Beats Electronics, announced plans to create a service that could compete, among others, with Spotify. “Right now, these [companies] are all utilities,” Iovine claims, “It’s give me your credit card, here’s 12 million songs, good luck.”2
The creators of Project Daisy emphasize four main selling points: sound quality, music discovery, direct-to-fan integrations, and the ability to “take music subscription services to the mainstream.”3
Although no formal details have been released regarding sound quality, Iovine et al stress its importance. Considering Beats Electronics has built an empire on headphones, it makes sense to integrate superior audio quality into their service. “We have an entire generation that was brought up on sound being inferior,” says Iovine, “so we will have the best possible quality and it will have global scale.”4 Beats succeeded in bringing high-quality, high-priced headphones to the mainstream music listener. “We had to get young people into the sound,”5 says Iovine, wishing for evangelists of better audio.
This might be difficult. Streaming appears to be the way of the future but some music lovers argue that sound quality is being compromised. With 320-kbsp for premium listeners, Spotify is at the top end. However, most other services are nowhere near. Xbox Music Pass offers 192-kbps streaming. Pandora subscribers also receive 192-kbsp, but the ad-based streaming model offers only 64-kbps.6 Therefore, the real question is whether the average consumer, fed on a staple diet of sub-par audio resolution, will care enough to take Iovine, and Daisy, seriously.
As a music service, Daisy will function similarly to others in that it will provide listeners with on-demand music and make recommendations. In addition to algorithmic suggestions, Daisy plans to use input from music connoisseurs to create a platform “in which the machine and the human would [sic] collide more intimately.”7 Creative Officer, Trent Reznor, claims that purely algorithmic recommendations have “begun to feel synthetic,”8 and compares Daisy’s more intimate approach to that of a local record store owner. Iovine claims that digital music is missing “cultural context.”9 In short, by combining a more personal approach to music recommendations, and adding direct-to-fan capabilities, Daisy hopes to re-awaken the music culture.
Direct to fan integration
Ian Rogers was the CEO of Topspin until he became the CEO of Daisy in early January. Meanwhile, Beats has invested in Topspin and plans to integrate GoDirect into their streaming service.10 Rogers still acts as the Executive Chairman at Topspin and says that the plan is “to set the gold standard for how artists can be integrated into consumer music services.”11 Topspin artists will be able to display products, merchandise, news, and tour dates to the people who are listening to their music. In addition, listeners will be provided with easy access to the artist’s Twitter, most likely either through a display on the site or a direct link.
Considering the minimal returns and royalties artists are receiving from streaming services, other forms of revenue, including touring and merchandise, have become more important. Daisy’s Topspin integration could potentially enable artists to increase the reach of their marketing efforts relating to products and tours. Listeners may be more inclined to purchase a shirt or attend a show if the information is right in front of them.
“There shouldn’t be a walled garden where the streaming service is just a utility that delivers the sound,”12 says Bob Moczydlowsky, Senior Vice President of Product/Marketing at Topspin. With the emergence of social media, fans are increasingly seeking a more intimate connection with their favorite bands. By integrating a communication tool like Twitter into a streaming service and allowing artists to make offers directly, Daisy may help to accelerate the process of converting casual listeners to true, dedicated fans.
Of course, these features will most likely only benefit artists using Topspin, which is a strategic play on Topspin’s part. If the service is successful in providing a better artist-fan connection, they will most likely see a new influx of users. On the other hand, if there are not enough Daisy artists using Topspin to provide value to the consumer, Daisy could lose its key differentiator, making it no different to other streaming services.
Bringing it to the mainstream
Daisy’s model questions the true nature of streaming services. In order to receive the full benefit from Daisy’s service, users will have to be involved with the site while listening. They will need to be reading a musician’s Twitter posts and looking at the tour dates and merchandise sales, as opposed to simply using the service for background music while on Facebook, doing homework, or commuting to work. The majority of music consumption is passive so, the team at Daisy will need to create some incentive to keep users engaged with the page. Perhaps Daisy will only be attractive to dedicated music fans, therefore making the goal of “bringing it to the mainstream” harder.
The service is scheduled to launch globally in late 2013. Daisy’s approach to streaming could be a game changer for the industry. “We’re going to do this right,” says Rogers. “We’re going to take streaming subscription services to the mainstream and we’re going to win.”13 The sentiment may be an expression of hope. But the creative team of Rogers, Trent Reznor, and Jimmy Iovine, is experienced and the startup is at least bound to make a splash.
Moreover, Daisy owes its deep pockets to the success of the headphones of Dr. Dre. There is something especially refreshing about this. The business got its initial seed money from the sale of a music product by an artist, not an angel or venture capitalist looking for an ad-financed venture for which music is just a social object. For the trade to be self-sufficient, and for music to matter as something more than a medium at the service of things other than the sound made, Daisy could perhaps be welcome news.
By Chelsea Ira