[By Vaibhav Agarwal]
One of the early entrants in Online music streaming industry, ‘Songbird’ is shutting down its services with effect from June 28th 2013, announced Eric Wittman, CEO,Songbird via a post on company’s blog.
The open source media player, made by Pioneers of the Inevitable was founded in 2006 and at its peak, made $2 million in revenues. The player was compatible with Windows, Mac and different platforms and could play pretty much any format you threw at it.
Initially the open source player was targeted for Desktops as an alternative to iTunes which aimed to make money by licensing white label versions of the product to Original Equipment Makers (OEM) such as Philips,HP. That did not work. Much later in 2012, company understood the increasing market need for mobile based music services and then pivoted to Mobile with presence on Android and iOS .
Company went through a rough phase in 2009 losing its founder Rob Lord amid changes for the monetization strategy. Since then its been a hard road for the open source media provider as the market just kept becoming more competitive with players such as iTunes,Pandora and Spotify. Restructuring in 2012 left the company with 11 employees in total and Eric Wittman was promoted as the CEO from being SVP, Products for more than a year.
In an email interaction, Eric Wittman answered some brief questions for us highlighting that what went wrong leading to the sudden demise of once popular and a million plus monthly user service. He also stated that how hard it was for the company to cash in on the open source feature.
1. What was the monthly traffic in terms of unique visitors?
Songbird had 1.2 Million monthly unique users as per the latest data in May.
2. How much traction did you have from India? What is the number of streams songbird plays daily?
India was our fourth largest country after US, German and UK. Because content comes from 3rd party services like YouTube, Facebook, SoundCloud and Twitter, we don’t measure number of streams.
3. What went wrong ? Can you elaborate the major reasons?
From my point of view, there were three key things that really hurt the company from reaching its potential:
A). It’s hard to monetize free open source software. There are examples where this has been done extremely well on the enterprise side when you can wrap high margin professional services around it however there are very few successful examples in the consumers space (Mozilla being one).
b) The company was extremely late pivoting from a primarily Desktop focused strategy to a mobile / cloud centric product strategy. When I joined in June of 2011, 95% of the company’s efforts were providing Desktop software to OEMs like Philips, HP and Vodafone. Meanwhile, the market and consumer demand for mobile music applications was reaching exponential acceleration. The company was late to the game and we did our best to sprint as fast as possible to make up for lost time.
c) Debt – in 2008 the company decided to take on a significant amount of venture debt to fund the business. While taking on venture debt is not unheard of, it’s usually taken as a means to accelerate growth of a business. Unfortunately it fuelled very little growth and became a massive albatross from a financial operating standpoint where at its peak it was consuming over 1/3 of the company’s monthly cash. Imagine how many more engineers or impactful marketing activities we could have conducted with that money!
4. What was the initial and then evolved Monetization strategy?
Original monetization strategy was to license a “white-labled” version of the Desktop product to OEMs. While it was a good idea in theory, there were a limited set of OEMs who could afford to pay for this and the bigger ones already had their own software teams working on internal solutions.
Where we were moving to, and were making decent progress on, was building out a critical mass of consumers where we could monetize in two areas:
1. Targeted advertising – because we knew an individuals music interests based upon what they consumed, we could provide very specific and relevant advertising to them.
2. Premium services – there were many “power user” features that had been requested that we began to work on that folks were willing to pay. We found that 23% of our Desktop users were willing to pay an annual subscription of at least $19.99 a year for premium features in the product
5. What number of Android and iOS app downloads did the company witnessed since the launch of mobile apps.
Downloads are a bit of a “vanity metric” given that it doesn’t really tell you about active usage but we can safely state we had over 1M downloads for Android and iOS combined
With over 11 million USD of investment by Sequoia, Atlas Venture and Phillips, Songbird was left out with little cash with unable to fund the further business operations. As for the users, company is suggesting an alternative open source desktop media player ‘ Nightingale’, built upon Songbird’s Source code.