Allan Isfan is a co-founder of FaveQuest, a young start-up. This blog covers start-up topics.

Sunday, January 28, 2007


audio tipping point

Before I get going, a quick reminder regarding the recent interview on Rogers 22. I think it actually went really well but I must admit I was very nervous. I don't get nervous very easily but being on t.v. is more nerve racking than I expected. When the interview starts, you enter this strange fog ... no time to think at all. They don't do second takes so you get one shot. Time flies and you have no idea how it actually went. I was anxious to check out the newscast at 6:30pm Friday but I was with my girls at Gymnastics and had to wait until later! Overall a great learning experience. I'll get my hands on the clip and make it available on my blog.

Ok ... let's change gears. Let me share what I see coming in the next few years in the world of audio.

In my opinion, we are reaching a tipping point in the online audio streaming world. In case you're not sure what "tipping point" is, here is the definition from WikiPedia "The phrase tipping point ... refers to that dramatic moment when something unique becomes common". Basically it is when something goes mainstream. I read a very interesting book specifically on the subject recently and could get into it more but I'll leave it to another time.

Online audio streaming has been around for quite a while. If you have ever listened to your favorite broadcast radio station through your computer, you would be counted as one of 59 Million people in the US (don't think they count Canada) that has listened to audio streaming online in 2006. If you do this at least once a week, you would be one of 30 Million people weekly users of online audio streaming in the US . Congratulations for being on the cutting edge! These aren't bad numbers. A JP Morgan study that was just released estimates that audio streaming draws ~$500M/year in advertising in the US. That's not too bad but when you consider $20B is spent on traditional radio advertising, it is still puny. That's fine with me because the number of people listening to audio streaming on line is growing by roughly 27% per year since 2000. This tells me that I'm entering into a growing market that is still at its infancy and I see opportunities all over the place. The timing is good for people and investors with vision (nudge nudge wink wink). We take rolled up coins, credit cards, debit cards, PayPal, cheques and Canadian Tire money (I need more pucks and hockey tape, the dogs keep chewing them).

Most people don't listen to streaming audio on the net yet. However, lots of interesting and moderately successful products and services are popping up all the time though, even though most aren't making a lot of money yet. I've mentioned Pandora and in the past. I've also been experimenting with AOL radio and Musicovery to name a few. There are also some excellent internet radios, such as the Squeezebox, and many very low cost WiFi radios will be popping up in 2007. This is the calm before the storm and a perfect indication of a tipping point. In 2-3 years or so, I predict it will be absolutely huge. A few more things need to fall into place and the floodgates will open. These things are falling into place as we speak and the trickle of water is starting.We also plan to help this along (our snorkels are ready).

There is a pretty clear desire to move away from pure broadcast but the existing streaming services lack a number of things before the tipping point happens. First, the services need to ubiquitous and reliable. Second, they need to be as easy to use as radio. Third, they need to be free. Fourth, they need to provide more than music. And finally, as always, there has to be some pretty useful, compelling and entertaining content behind to rip you away from your comfortable and familiar products, especially if you're not a teenager anymore (works the opposite for them).

Some pretty cool stuff is coming down the pipe and I can't wait to share the . I'll share cool stuff with you in the coming weeks. I'm heading to Barcelona next week for the world 3gsm congress, a huge show which focuses primarily on wireless technology. It is a wild and insane show and I expect to come back brutally exhausted but hugely pumped and ideally armed with follow-up meetings with key execs and potential customers. If you are heading and want to chat, let me know so we can set up a meeting ahead of time.


Allan Isfan
Co-founder, CEO


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