Audio ads

The outfit, which aggregates metadata and streams for 70,000 stations, has 40 million active users and serves iAd and AdMob display ads through its mobile apps. These visual ads are all well and good and yield “okay” click-through rates, but TuneIn is an audio service. CEO John Donham tells paidContent:

“We’re going to do audio adverts before the stream and have a companion display ad associated with them. We’ll be starting that shortly as a test, to make sure it doesn’t have a negative impact on the user experience.”

Of course, most of the radio stations on which TuneIn depends already sell their own ads in their streams. In TV, the practise by which live aggregators like FilmOn and TVCatchUp insert their own video pre-rolls before channel streams has riled some broadcasters. But Donham says TuneIn won’t trample on owners, citing existing partnerships with broadcasters including CBS, NPR, Entercom and TalkSport…

“We don’t touch any broadcaster streams. If a broadcaster has a pre-roll in front of the stream, we won’t stomp over that. It would be a double-negative to user experience if you got multiple pre-rolls before the content. We would look to avoid that as well.”

Discovery

TuneIn took $16 million this June, led by General Catalyst Partners and including Jafco Ventures, Google Ventures and Sequoia Capital. Why? Donham explains:

“Discovery is a hard problem to solve. We want to hire the best people to help us do that. For us, it’s harder, because how do you know what’s playing at any given time?

“We have a lot of really exciting challenges ahead of us. Google, Sequoia – these places are full of entrepreneurs who have tried to solve similar problems.”

Personalized radio

Donham is coy, but one of the key approaches to enhancing discovery will see TuneIn presenting radio options based on listeners’ habits:

“A lot today is browse-by-location. There’s much more we can do. How do we create an additional user interface that surfaces the awesome stuff right now and more awesome stuff based on what you listen to?”

The additions are yet to be announced.

Netflix for radio?

TuneIn began life a decade ago as RadioTime, the online radio metadata service which sells its guide service to third-party audio brands. But, having rebranded to become a direct-to-consumer business, TuneIn will soon have no white-label customers left – the last remaining, BMW’s Mini, will soon carry TuneIn’s own-brand service. Donham says:

“We see this as such a big opportunity. Radio is the last mass-market medium to move online – the final frontier. As Amazon is for books, iTunes is for CDs, Netflix is for movies, so TuneIn is for radio. The more we can create a consumer brand that people recognise, the more successful we will be become.”

TuneIn’s backers are all institutional investors rather than strategically-placed radio industry players on which it could have drawn for advice, but Donham says: “As we continue to grow, the options for more strategic relationships make sense.”

Free, not paid

TuneIn’s apps, which have become its core consumption method, come in two flavors – free with display ads, or at a small fee for a built-in recording feature.

It is a rare CEO that asks you not to pay, but Donham surprised me by saying:

“The number one way we monetise is advertising on the free app. The paid app is a legacy. We would rather you listen to the free app than the paid. We would urge you to switch.”

I trust that a cheque refunding my earlier £0.69 outlay is in the post. But this is an indication of where TuneIn wants its model to go. A Netflix for radio, perhaps – but not with Netflix- or XM-like subscription fees.

“One of the cool things about radio is, it’s free,” Donham says. “For us, we see a really big opportunity in addressing the largest market possible.

“There are literally billions of people who consume radio every month. What a gigantic opportunity – we’re not going to get them all to subscribe to something – we’re going to get them to listen for free and monetise that.”

Future flooded iTunes Newsstand with 65 titles in October and, by January, had clocked up 430,000 individual sales from 10 million free magazine downloads. “We can claim to be to be leading publisher on iPad, worldwide,” Wood tells paidContent.

Now Wood’s group plans to make more of those editions interactive, and to start selling to rivals the very tools it is using to make them.

#1. What are the latest numbers for your tablet magazines?

“We’ve moved on (since January). In March, we were at over 12 million container app downloads, had five million people signed up for marketing messages, which is a lot, and way past half a million sales.

“We saw a big spike when iPad 3 was launched – the more devices that are launched, the more we will see people prepared to pay for content.”

Future reached a milestone in Q4 2011 when digital revenue gains made up for print declines for the first time. Next stop, digital revenue fully overtaking print? “We’re heading that way, yes,” Wood reckons, though it is some way off.

#2. Some observers say sceptically that early tablet magazine sales were just novelty spikes. Is iPad a gift that can keep on giving?

“If you take our T3 magazine, sales of its editions have carried on climbing. It is still the top-selling magazine on Newsstand; we’re not seeing any change in that pattern.

“Overall, it demonstrates people are prepared to pay for content.”

“The more magazines which go on Newsstand, the harder it gets to find stuff. iTunes introduced simple navigation but the navigation is getting clogged. Apple is aware of that and is looking to improve it.

“T3′s are big numbers, our others are not so big but are significant and enough to make profits, especially as sales of tablets grow. We are looking at numbers that project there will be close to a billion tablets by 2015.”

#3. Why did you develop your own tablet publishing software, and why are you trying to license it to rivals?

Of its interactive editions, Future launched T3 magazine to iPad, pre-Newsstand, using the Woodwing production software,  and followed it up with Guitarist magazine built using Adobe Digital Production Suite – amongst the many packages catering to publishers’ migration ambitions, including Mag+, PixelMags and one from Siemens.

But, unusually for publishers who often buy in the service, it then turned its in-house app developers toward building Future’s own iPad magazine production software, Folio, which it has since used to roll out Tap!, Cycling News and Total Film. More are in the pipeline.

“It’s very flexible,” Wood says. “There aren’t many other software technologies out there with the range it’s got.

“Our Future Music magazine has always produced covermount discs with audio – now we’re embedding that in the magazine.”

“One thing we tried to achieve was to have a system which enabled us to produce multimedia editions with the least possible additional work, because a video-rich edition like T3 can add three people to your headcount if you’re not careful.”

So how many of the 65 page-turner replicas, out of Future’s 70 Newsstand titles, will be converted to interactive using Folio?

“We are aiming to get almost all the portfolio to be interactive to one degree or another,” Wood says.

“Consumers are becoming more demanding – they want exciting editions. We will certainly convert all the ones we think will sell well. We will go through a winnowing process at some stage.”

Next up, Future hopes to license Folio to rival magazine publishers to produce their own interactive editions – something which will see the publisher go head-to-head with vendors like Adobe and Mag+.

#4. What place does the long tail play in magazines? It seems like the book sector, which is going episodic, and the magazine industry, which is publishing more timeless editions, are each converging at the same middle point from opposite ends.

“I agree, that’s a good way of looking at it.

“We are looking at how we can repackage our existing material from back issues, things that run along in themes.

“The back content is still of interest. We’ve learned on ipad that back issues carry on selling for quite a long time – you just don’t take them off.

“With one of our Photoshop guides, a repackaged product at £11.99 – we’ve sold between 1,000 and 2,000 – that will stay up there for a long time. We’re looking now at what else we can do.”

#5. What are Future’s international plans?

As part of an effort to turn around its U.S. business, where newsstand print circulations are declining faster than in Europe, Future last year stated its ambition to turn its efforts there more digital, more quickly than previously planned.

The group launched its TechRadar web portal in the States in April. “First feedback is good,” Wood says. “We will do the same with BikeRadar next month because we want to build our U.S. cycling presence very quickly. We want to make it a very American product.”

Wood hinted Future is also looking to new markets beyond the U.S., too. “Every time we go in with a new English-language product, it’s very large margins.”