Online music radio like Pandora and various online music streaming services are gaining momentum annually. Last year in the US alone, the market of online music radio like Pandora was estimated at more than $2.4 billion, which exceeded the profit from direct music sales and brought more than a third of the total income of the music industry. Of course, the laurels of Pandora radio mobile app, Spotify and other “sharks” in this segment do not give rest to other market participants – everyone wants to grab a piece of this rather big pie. Silicon Valley giants race to launch their own streaming music app services and / or buying promising startups, hoping to oust the successful projects in a growing market. Lesser players are not sitting idly by; trying to take the place under the sun before the entry threshold did not become too high. So, what does one need to run their own Last.fm? Let us discuss how to make a radio app and estimate roughly the cost to build a radio station app.
What is there to consider?
Before plunging headfirst into the world of endless terabytes of music, one has to answer the question “why?” Is there some unique quality to your music app like Pandora radio mobile app? On the market of $2.4 billion just making a quality product would not be enough. What are you willing to offer the world creating a music radio like Pandora? What would differ your startup striving to create a radio station app from Deezer or RDIO? Did you come up with a revolutionary compression algorithm (hello to the Pied Piper geeks), or was able to invent a super clever music selection mechanism based on the user’s preferences? Whatever the case, be sure to have some ace up your sleeve to attract the customers to your app clone for Pandora radio.
See also: How To Develop an App Like Periscope?
Whom do you have to compete with?
Continuing the theme of market competition, let us review the best existing players competing with Pandora radio application. These people have lassoed millions of everyday users and got contracts with the music majors already. Know thy “enemy”.
Founded in 2006 by the Swede Daniel Ek, Spotify provides access to more than 20 million songs. Now, the service attracts more than 100 million users, about a third of whom have purchased a paid subscription. Thanks to online streaming music app development, Spotify works on all major mobile and desktop platforms and is available to customers from Western Europe, North and South America, Australia and New Zealand.
Founded in 2000 by Tim Westergren, currently, the company has an estimated capitalization at nearly $4 billion, which is not surprising – at the time, Pandora was the first to offer a revolutionary approach that allowed the user to adjust the playlist to their liking. Now they have about 250 million users in the US, Australia, and New Zealand. Pandora is available for users on Windows, Android, and iOS (iPhone) platforms.
In 2008, Bob Pittman had an idea to make a radio app and launched the Internet radio aggregator iHeartRadio in the US, which provided the users with musical content collected from 800 stations, based on their preferences. Currently, the service is available in USA, Canada, Australia and New Zealand, and works on all major mobile platforms and some game consoles.
The UK service launched in 2002, it was bought by CBS for more than a quarter of a billion in 2007. LAST.FM has more than 10 million active users and is a music recommendation service based on the collected user stats. In addition to the music itself, LAST.FM prompts the user to “close-minded” accounts, articles and even concerts of their favorite bands.
French Deezer has existed since 2007 and offers more than 40 million songs to its 16 million users in 180 countries. Available through radio app development at all the major mobile platforms and at the web, the Deezer has options for LAST.FM integration.
In addition to the above players, there are dozens of smaller services with different coverages and monetization methods. Comparative characteristics of even the basic of them are worthy of a separate article, so we will not be hung up on competitors. You already know who to align on.
Business model and monetization
Now is the time to think about the business model and the methods of monetization. You do want to make some money in a process, right? That is what any business is about at the core anyway. How intrusive would be the advertising in free accounts? What would paid accounts feature? How would you encourage the users to buy the full access, not scaring away the active free users in the process? What form would your service take: an Internet radio station or an online music library? All these factors should be considered before the development start.
Analyze the competitors’ models starting with the five abovementioned. Spend some time using the most attractive for you streaming services, to identify their strengths and weaknesses. Think what you like best in the Pandora, and what are the winning iTunes Radio points. What options for social media integration would your product have? How will you customize your playlists to the user’s preferences? Answers to all these questions will affect the result, and – most importantly – the development process.
No market research on the product prospects today can do without the SWOT-analysis. Let us try to understand the perspectives of the music streaming service, taking Pandora Radio as the instance.
• Focus on the user;
Pandora was first to analyze the tastes of their users to form a playlist.
• Large media library;
More than 1.5 million songs available.
• Flexible configuration;
Pandora offers the users a great number of settings that allows them to fine-tune their playlist to the slightest nuances.
• Multiplatform app;
The service is available on virtually every popular platform.
• Huge music library for a free account.
A free account allows access to 100 custom radio stations.
• Narrow geography;
Service is only available in the US, Australia, and New Zealand.
• Strict limitations for free accounts;
Only 40 hours of music is available monthly. Also, there are severe restrictions on the playlist advancement.
The free accounts are pestered with a large amount of advertising.
• Expansion of the geography;
Huge opportunities for expansion in Europe, Canada, and South America.
• Improvement of “customizing” algorithms;
Algorithms “guessing” user tastes are constantly improving.
• Expansion of the library;
One and a half million tracks are not closely the limit.
• Expansion of the platform coverage.
Support for video game consoles, smart TVs, and other platforms would not be redundant.
• High competition;
A large number of similar products, including the “mastodons” of the IT market.
• The loss of new markets;
Entering new markets can cause problems, due to the existence of the competing services. There is a risk to miss the point.
• User outflow.
There is a danger of users leaving for a substitute services.
Another problem that any streaming service encounters is a music licensing. Everyone is aware of what happened to Napster. And it was a pretty thriving project at one time… Major music labels, as well as the musicians themselves, do not like it when their music is used for free. Therefore, you have to buy licenses to use their intellectual product, which contributes to the radio app development cost in the end. Pleasure is never cheap. And to compete with existing services you need a lot of music. A very. Big. Lot. Of music. A couple of Bieber hits will not make it here.
A bit of a tip – consider beforehand, what can you offer to the rightsholders to get the advantageous conditions. Look for information on similar transactions. Of course, nobody likes to disclose details of their agreements, but still, some details can be found in the free sources. In addition, you should pay attention to the musicians who distribute their works for free (or conditionally free) – and there is a plethora of those – and independent labels. Also, think about the possibility of relaying the competing stations. There, too, are some legal pitfalls, but this option may be more acceptable to you.
And, of course, the project development itself has its peculiarities. The market is rich and very competitive, respectively, already certain minimum quality standards exist. The multi-platform app nowadays is a must, and the playlist adaptability to the user’s tastes no longer seems a fantasy.
Therefore, in order to be eligible for the existence, your service must be available for three platforms at least – the web, iOS, and Android. This means, either employing a lot of staff including three teams of developers (programmers, designers, QA engineers, PMs, etc.) or turning to one of the professional mobile app development companies. Most of the established mobile application development market players have experience, tools, resources and assets sufficient for the parallel or consecutive app building for all the three platforms. Not to forget the organization (or lease) of the data center for storage of the terabytes of music. Furthermore, even when your product is released, it should be maintained continuously to react timely to user bug reports and propositions, expand and implement the new features for startup.
How much does Pandora cost? The usual hourly app development rate on the market ranges from $20 to $250, depending on the project complexity, developers’ skills and the place of residence (the Valley companies are several times more expensive than their counterparts in Eastern Europe, for example). Though, it should be noted that higher price does not always warrant the higher quality. The time required for the development of such a service depends on the number of features that you want to implement from the start, but, by our experience, it would average at 1,500+ hours. In our estimations, an app like Pandora radio cost would be around $60,000+.
Creating a competitive streaming service is costly and time-consuming task, though very rewarding at times. It requires a lot of effort, a lot of resources, perseverance and outside the box thinking. But, as a wise man once said, human greatness is measured by the greatness of their goals. Therefore, do not be afraid of difficulties, follow your dream, and remember that the today’s big corporations often started in the garage.