New App Stationhead Could Be Just What the Streaming Business Needs
By turning playlists into personal radio stations powered by collective listening, the streaming business might just have found the shot in the arm it's been looking for
When Spotify's global head of creator services Troy Carter was asked at a conference five weeks ago about which promising music startups were on his radar, he didn’t skip a beat: Carter began describing an app that allows anyone with a premium Spotify account to turn their playlists into their own personal radio stations, through which they can interact with listeners and speak -- and even make phone calls -- over the music on their channel.
"It turns everybody into a DJ, basically, so you can play music, you can go live, there's a great flow and people are commenting -- it's almost as if you took Facebook Live and layered it onto the platform," said Carter, speaking at the Music Biz 2017 convention in Nashville. "And it's addictive. I thought I was a DJ for the night; I stayed up until like 4 o'clock in the morning DJ'ing a set."
Carter, a tech investor and former manager of Lady Gaga and Meghan Trainor, was talking about Stationhead, an app built by former Stage singer Ryan Star and his childhood friend Jace Kay, a web designer and coder, that launched in private beta earlier this year. Stationhead, which Kay built on top of Spotify's API (the interface that allows apps and features to be built into Spotify), offers the shared listening aspects of a traditional radio station but allows anyone, from a veteran artist with a huge following to a kid in a basement, to essentially take control and, in Star's words, "Turn your playlist on."
But Stationhead is more than just an app that allows people to share their playlists in real time, and what sets it apart could have a big impact on the music industry. Unlike an online radio station, in which a single broadcast is sent out to all listeners, when a user tunes in to a station on this app, the tracks being played by the DJ are simultaneously streamed via each listener's Spotify account, meaning that each listener counts for an individual stream of a song. Users can also "bite" a track that they hear on another station, automatically adding it to their own playlist, allowing songs and artists to travel quickly.
"You're sending a command for everybody to play it in sync, and you're also giving them control to be able to hop on and talk at any time and say whatever they want," says Kay, who developed the app over the past several years. "If you're a popular artist and you have a million listeners and you play 15 songs, that's 15 million streams. And after you're done, the people don't disappear; with this, if you're off air, people stick around."
Courtesy of Stationhead
As artists diversify the way they roll out their albums, Stationhead’s utility could become a game changer. Drake, for example, has used his OVO Sound radio station on Apple’s Beats 1 to give fans a first listen to each of his last three releases before they became available to stream and purchase, referring to the premieres “global listening parties.” Stationhead would provide a similar experience for both artist and listener, with the added bonus that every single listener would mean one individual stream per song on the album; if just half the 10 million people who follow him on Spotify tuned in to a Stationhead debut of More Life, for example, that would equate to more than 100 million streams of the album’s songs globally -- in less than 90 minutes.
"A Taylor Swift or a Kanye West with millions of followers, if they start doing this, imagine the power and the reach," says Gary Greenstein, former general counsel for SoundExchange who is now a partner at Wilson Sonsini Goodrich & Rosati, which represents Stationhead. "And the fact that they can make money off it and they can help break bands and the labels can get their artists to do it; this is a very, very powerful tool in an age where there's so much noise."
In the past two years, the adoption of subscription streaming services has driven the music industry's first back-to-back years of growth this century, with 112 million paid subscribers worldwide by the end of 2016, according to the IFPI. In the U.S., streaming accounted for 51.4 percent of recorded-music revenue in 2016, according to the RIAA, generating $2.5 billion, an increase of 114 percent over 2015. To continue that growth, market leaders Spotify, with 50 million paid subscribers, and Apple Music, with 27 million, are looking for different ways to draw in new subscribers and drive more streaming -- and thus, more revenue for labels, publishers and artists.
"This sort of shared listening experience by a service is something that lots of companies have been interested in and trying to crack," says Greenstein. "Where you have simultaneous listenership right now is terrestrial radio, but that is over the air, it's not personalized, it's a mass audience. If I'm a fan of Ryan and I'm listening to his music and he plays an artist that influenced him and I like that artist, then I can follow and put out to my network the fact that I'm listening to Ryan, and it amplifies the listening experience."
Ryan Star and Jace KayStationhead/Serena Lingo
The idea for Stationhead began in January 2014, with Star and Kay sitting in a Manhattan bar considering the bill. Earlier that evening, Star and his band had played a sold-out show at the Bowery Ballroom across the street celebrating the release of Star's latest album, Angels + Animals, which had been released the day before. But then, catching up with Kay over dinner, the two decided to split the check.
"Jace was like, 'I've seen you on TV, heard you on the radio and in movies, why are we splitting dinner?'" Star recalls, sitting on the roof of Kay's apartment building on 23rd street more than three years later. "That's when I said, 'We should talk, man. There's a lot of people like me out there that are struggling in this sea right now.'"
After a decade-long career that began when his first band, Stage, was signed by Madonna and Guy Oseary's Maverick Records in the early 2000s and included stints at Atlantic Records and Island Records as a solo artist, Star was officially independent, with a dedicated fan base and a modicum of success but without the hallmarks of a rock and roller from an earlier era.
At the time, the music industry had seen declining revenues for 15 straight years, ever since Napster and the digital music revolution undercut CD sales and consumer buying habits and all but ended the glory days of major label excess -- a period that coincided with Star's own career. But the rise of subscription streaming services like Spotify had begun to change the narrative, and the fortunes, of the industry at large. And Star and Kay saw an opportunity.
"I realized that there is an experience to be had, and it came back to this movie I saw as a kid, called Pump Up the Volume, where Christian Slater had a pirate radio station and it was the coolest thing," Star says, relating his own struggles with the expenses and politics of getting songs played on terrestrial radio, particularly as an independent artist. "Jace said, 'You want a radio station? I can build you one.' These days everything is social, but one thing that hasn't been turned on socially is music and radio. So we thought, 'Let's turn the world on.'"
Kay spent a year and a half building the back end of what would become Stationhead, while Star began cultivating support and advice from industry connections he had built throughout his career. Over time, Kay's apartment became a de-facto office, which now includes four additional employees in a typical startup environment. But the work has paid off, particularly in the past few months, as label executives and streaming service higher-ups begin to see its application; both Island Records and Republic Records have launched stations on the platform, and Star and Kay are working on a collaboration with Julie Greenwald and Atlantic Records, while an integration with Apple Music is also currently in the works. According to Star, users spend three hours and 45 minutes a day on average on the platform, hopping back and forth between broadcasting and listening.
"It democratizes the playlist process," says Rob Wells, former head of digital at Universal Music Group and now an advisor to Stationhead. "You're no longer relying on a Friday afternoon playlist, or a rock playlist; you follow various people and you're introduced to new music by entities that you have faith in, that aren't controlled by stakeholders that control the subscription services. Plus, it gets people through the payment gateway, it will increase listening, it's something that can be used to introduce new fan bases to new artists. So it does tick most of the boxes."
Courtesy of Stationhead
Terrestrial radio, according to consumer surveys, remains the largest source of music listening in the country, but its status as a promotion machine and a gatekeeper within the music industry is increasingly in question. As smart phones have become ubiquitous and digital radio and streaming services have begun to infiltrate both the car and the home, radio's promotional capabilities have begun to diminish in importance. And after decades of being shielded from paying royalties to record labels and songwriters for broadcasting records, the Radio Music Licensing Committee (RMLC) is negotiating with BMI over an interim royalty rateof 1.7 percent of revenue to be paid to copyright owners, a battle that has raged for years and that will likely continue moving forward.
But Stationhead's model is not the same as radio's, which is regulated by the FCC. Because it's built on top of a fully-licensed streaming service, Stationhead doesn't need to have deals with record labels and publishers; Spotify's licenses take care of that for them, and its underlying system makes royalty payments automatic.
"It's turning your voice on, it's turning the world on, it's taking something that's off, that's broken, and turning it on," Star says. "So we look at FM and AM and we say, 'ON.'"
Despite the fact that the app is still at an invite-only stage, Stationhead is building out an impressive board of advisors; already, the company counts industry veterans like Wells, Greenstein, PledgeMusic founder Benji Rogers and E Street Band guitarist Stevie Van Zandt among its advisors; as well as Vonage co-founder Jeff Pulver; and Conductor co-founder/CEO Seth Besmertnik with a rolodex that's expanding by the day. Star and Kay don't see Stationhead as Spotify-only; the vision, Star says, is to make the app platform-agnostic, available to use with any streaming service, and they've been taking meetings to explore those possibilities, and are also in the midst of a funding round with the goal of a public beta later this year.
"Turning individual fans and consumers into, in essence, a radio DJ, where they can actually speak over the broadcast channel, that's a good idea," Wells says. "That's something that's going to enhance the listening experience and make music subscription services more sticky."
"There's still this desire to be part of a group, to have a shared experience," Greenstein adds. "And that's what [Stationhead] provides."
