When David Purdy left Vice Media for Stingray Digital late last summer, he was tasked with diversifying and developing revenue strategies for the multi-platform music and media provider. Fast forward nearly one year and the chief revenue officer says in many ways, the company is just getting started.
“Stingray as a music company is underestimated or undervalued in terms of just how broad our reach is,” Purdy says of the company that got its start primarily as a music streaming platform that came preloaded onto smartphones and televisions. Now that Stingray reaches more than 400 million subscribers in 156 countries with a portfolio that includes more than 100 channels of curated music, audio television, SVOD content, radio stations and more, Purdy says monetization of its flagship music product is now the goal.
In Canada, Stingray’s revenues are already trending up. In Q4, Canadian revenues came to $47.3 million, a 246% year-over-year increase – largely a result of the acquisition of NCC and Novramedia, broadcast radio stations. But Purdy is looking at unique ways to diversify revenue outside of the radio stations.
“The music video channels historically have not had advertising or sponsorship incorporated into them,” Purdy says. But as Stingray grows to reach more than five million homes in Canada, “the ratings are going to grow, the distribution is going to grow and I think that will be a wonderful opportunity for advertisers.”
However, Purdy (pictured right) is aware of the effect such changes could bring. “We don’t want to do anything that would jeopardize the customer experience.”
According to the Nielsen Music 360 Canada Report, 54% of Canadians consumers favoured Stingray, when compared to Spotify (46%), Google Play Music (47%) and Sirius XM (38%). A number like that, says Ryan Fuss, SVP of global advertising, is indicative of the awareness Stingray is generating at home, also helped by the fact that it is a “true omnichannel audio everywhere brand” which is helping establish Stingray – originally a B2B – as a consumer brand.
Another study – a late 2018 Numeris PPM survey – found that Stingray’s music service reaches nearly half of Canadians (41.4%), and 41.6% of the respondents had listened to Stingray Music on TV in the two weeks prior to the survey. Its audio channel represents a 14.2% share of the audio market.
It’s significant penetration considering even Stingray admits its service doesn’t have the name recognition of Spotify, Apple Music or Pandora. That unique preposition for Stingray has been echoed numerous times – the 2018 Infinite Dial study showed that Stingray’s penetration is much higher than its actual name recognition.
As Purdy explains, despite its ubiquity as a brand, Stingray’s increasing success has been the result of the availability of more measuring capabilities via access to more data as well as aligning with the right broadcast partners, some at home and some abroad in the U.S. and Latin America. The two facets also dovetail nicely into an ad-supported future, he says.
Purdy credits Fuss, another former Vice exec, with laying the groundwork for products and services more dependent on ad models. Setting up the technology to support a media buy is work that is ongoing. The company’s concert film channel, Qello, for example, is prime for options like pre-roll or other visual advertising. The surge of ad spend in the growing digital audio category, says Fuss, is also driving an appetite for more innovative audio solutions. “They’re looking for something new and unique and premium that connects advertisers and their brands with audio listening audiences,” he says.
Indeed, audio is taking an increasingly large share of digital ad spend – and its popularity is also driving strength in analog radio. Various reports on Canadian ad spend show that radio ad spend is either steady or decreasing only modestly at rates of less than 4%.
In the U.S. and Europe where Stingray’s ad-supported music service is still in its infancy, there is growth in users and usage and total listening is increasing more than initially anticipated.
“As it continues to grow, we’re well positioned to capitalize on the growing ad spend going to audio,” says Fuss (pictured left). The strategy for the company is to consider an audio listener holistically, across all platforms. To that end, a broader distribution for Stingray’s music channels is underway, with more planned. And, the platform continues to purchase radio stations in local markets from Newfoundland to Southern Ontario to Alberta.
As access to data and analytics improves – Stingray’s paid audio and visual channels are now measured by Numeris and ITT-based data has been more forthcoming, says Purdy – it has informed programming decisions, consequently retaining Canadian listeners. “What I do think is helpful is the fact that we curate to the local market,” he says, adding that honing that focus is also a process of improvement . “The fact that we’re Canadian allows us to understand the market.”
As each moving part continues to evolve in the Stingray journey, Fuss is confident in its audience, consumers who he says are starting to recognize what the brand can offer and are “putting the pieces together.”
As Purdy puts it: “There’s always a higher gear. By no means are we done, there is still lots of growth to be had.”
With Stingray still working out what exactly it wants to make available to advertisers, it’s going to face competition for digital audio dollars mainly from Spotify (Apple Music remains ad-free, while the closest competing player in the global audio market, Pandora, is not yet available in Canada). Data obtained by CARD shows that for audio ads, Spotify’s CPM is between US $5 and $30 (Pandora’s is roughly $8 to $12 for audio, $5 to $7 for visual and $15 to $25 for video). Spotify requires a minimum ad spend of $25,000, although brands can also access its self-serve ad studio for a minimum of $250.
