Bagby was speaking to Music Ally as Rdio launched the free tier of its service in the UK, offering people up to six months of free, metered web listening.
Belgium, Denmark, Estonia, Finland, France, Netherlands, Norway, Portugal, Spain and Sweden in Europe and Australia, Canada and New Zealand elsewhere are also getting the free tier, which debuted in the US last year.
It’s an attempt to widen Rdio’s funnel to attract people who can then be upsold to its monthly subscriptions for web-only and web+mobile access.
“The seven-day trials weren’t enough to get people to really understand the product and get into it,” says Bagby. “Education is what needs to happen. Some people get it right away, but at the end of the seven days, others are still trying to figure out what streaming services are, and why they should pay the extra £5 or £10.”
Rdio hasn’t published figures for its free and/or paying users, leading to a perception within the industry – probably accurate thus far – that it’s still small compared to rivals like Spotify and Deezer.
Even so, Rdio has won warm praise for the design of its service, particularly its mobile and tablet apps. Hence the mobile emphasis, which was the focus of Rdio’s advertising campaign in the US in the fourth quarter of 2012. Bagby talks about “significant onboarding” as a result of that.
Marketing is a key challenge for any streaming music service: how do you raise awareness that you even exist, let alone explain the ins and outs of the streaming music model? What are Rdio’s plans outside the US?
Expect a mixture of physical billboards, traditional advertising, digital campaigns and FM radio partnerships, with the latter having been encouraging in the US according to Bagby – even though on-demand streaming theoretically competes with radio.
“The radio partners seem to be a good line of attack, as that’s where people go to learn about music and hear discussions around music,” says Bagby. “It’s where labels traditionally go to break bands, so it seems like a good place to go to break services.”
“Discovery wasn’t just bolted on…”
While Rdio looks for scale, it’s set to face more competition later this year when Beats launches its new Daisy service, which will have an emphasis on discovery. Just as established rivals have done, Bagby pushes back at Beats’ claims that the existing streaming services are glorified search boxes.
“Discovery wasn’t just bolted on for Rdio, it was at the core,” he says. “We looked at how people discovered music when they were younger, listening to friends’ collections then buying it in the shop. This combination of old-school offline discovery and new-school internet discovery: that’s where the heavy rotation comes.”
Rdio is also hoping its design values help it find a sizeable audience, even if it’s not as well-funded as Spotify and Deezer. Bagby says the past experience of Rdio’s team will be important here.
“When I was at Skype in the early days, we were going up against MSN Messenger and Yahoo. These were big, well-established incumbents,” says Bagby. “It just came down to the simplicity of it. The user experience was key, and we have that same product team here at Rdio to provide that service.”
In the meantime, there is European expansion to consider – Rdio is hiring more staff on this side of the Atlantic – while also continuing to reach out to artists.
Rdio’s Artist Referral programme launched in 2012, paying artists a commission for every new subscriber they bring to the service. It was the first such scheme from a streaming music service, aiming to address the ongoing debate over per-stream payouts and potential sales cannibalisation.
“It’s going to be a huge focus of ours: what can we do outside of just licensing the records?” says Bagby.
“In general, there’s an argument that artists will make a lot more money over 10-15 years of people playing a song than they will from just one download. But we’re looking at how we can work with them more immediately too.”