mixradio

Life has changed quite rapidly for MixRadio: it began as a music service from Nokia (as “Comes With Music”); the company was then sold to Microsoft along with Nokia’s handsets and devices business. Bought by messaging app LINE at the turn of 2014, MixRadio is readying itself for life with a messaging application. Mark Wheatley, Head of Experiences at MixRadio spoke with MediaNama about the future for the business, and how, hypothetically, a music and a messaging app could work together. Excerpts from the interview, conducted on the sidelines of the Mobile World Congress a few weeks ago, before MixRadio closed its deal with LINE:

MediaNama: Where’s MixRadio at right now?
Mark Wheatley: We’re in an interesting place. Within a little more than a year, we’ve gone from being an innocuous music solution to a Microsoft service, and very soon becoming an independent company. It certainly won’t be long before people start to see our aspirations become real, which is really about giving users on other platforms the great experience that Lumia users have had exclusively for the last few years. I think people tend to regard Lumia as a platform where, maybe, the users are less, forward leaning and digitally engaged, but when you look at the performance and usage data, the engagement levels, the retention levels, and the number of active users that we built up, on a platform which maybe still has single figure percentage market share, its quite incredible.

MediaNama: The function of that would have been the marriage to the handset in a sense and that, now, will no longer be available.
Mark Wheatley: That still continues. Microsoft has agreed to preload MixRadio on the Lumia devices. Those Lumia users will still get access.

MediaNama: I’m not talking about the preloading, the biggest challenge with music services is actually getting people to pay for them. That is something where Nokia music had an advantage, because Nokia would pay for the music.
Mark Wheatley: So in India, we will still be offering free experience to those users, but its just that it will be focused around radio, and there will be opportunities for unlimited on-demand experience that will be paid. As the market moves more towards streaming, you’ll start to see the real USP, our real global USP, in India too.

PRODUCT DIFFERENTIATION

MediaNama: Where does the differentiation lie? If you look at india, there’s Saavn, there’s Gaana*, and now there’s Rdio. I can name at least three other music services which have shut down over the last couple of years. It’s a really competitive market.
Mark Wheatley: I think, you know, clearly what we have at the moment, is a flawless execution and a focus on simplicity that other music services have failed to match. So business model aside, when it comes to the product experience, we’re clearly streets ahead and other services have been following us for a couple of years in terms of what experiences we’ve been delivering.

We found that if you overcomplicate the experience, it doesn’t matter how good the fundamental offering of the product that you’re selling because people will struggle, people will gravitate towards those experiences that are really simple and seamless.

MediaNama: Can you explain how?
Mark Wheatley: We were the first music service to deliver a one touch personal radio channel called PlayMe, and you have seen other music services following into that space now. So the ability for us to stay ahead in terms of the user experience I think is something which we’re very confident of. I think additionally what we have where Saavn and some of those other services potentially have come unstuck is that they don’t have a globally successful music service behind them, they’re focused specifically on a single market which allows them to customize to a certain degree, but actually the benefit of what we have is a vast quantity of user data.

So the global distribution and the global scale that we’ve got enables our personalisation algorithms to be amongst the most powerful and effective that exist, and they’re only getting better. I think that our differentiator really will be the really powerful combination of the simplicity and gracefulness of our execution, and the power of our recommendation algorithms, which really, you know those smaller organisations and with less years of many many millions of pounds worth of investment in building those assets, they just haven’t been able to catch up in to the degree that they need to.

MediaNama: But isn’t even the personalisation algorithm now a commodity? Everyone’s got one.
Mark Wheatley: Everybody’s got one. It’s like everybody has got a car. What sort of car have you got? This is really where, we think, we’re in the Rolls Royce. Competitors are, you know…

MediaNama: They could say the same thing to me: that they’re in the Rolls Royce
Mark Wheatley: The proof is in the pudding. And I think the performance of the products will tell. When you see again some of those services struggling in India, and you see how well effective our product will be when its relaunched, I think thats when you’ll be able to judge for yourself.

HANDSET OEM AND LABEL RELATIONSHIPS

in India, where a lot of the restrictions and complications were taken out of the product. The rest of the world, the rights holders always were insistent on a lot of complexity and just made the product experience very difficult.

MediaNama: In terms of preloading, do you have any other partnerships outside of Microsoft? India has largely become an Android market.
Mark Wheatley: It does, yes, well, we can’t talk about specific announcements because we’re not announcing anything yet but we certainly have been having some very high profile partners in distribution discussions with us, so I think that the likelihood is that when we launch our new product after we spin out, you will see, as part of that launch some very high profile channel distribution announcements as well.

MediaNama: Is sourcing of music an issue anymore? Because when you had Nokia with you, it wasn’t very difficult to get companies like T-Series.
Mark Wheatley: We still have those label relationships. Those kind of relationships don’t disappear overnight.

MediaNama: Is the cost of those relationships increasing?
Mark Wheatley: I would say, certainly, that the cost of the relationship is increasing because our scale remains significant in terms of what we’re doing I think. Although we don’t have Nokia and Microsoft behind us in those discussions, we do have our parent company LINE, probably the fastest growing global messaging experience and in terms of user numbers. It’s the number one in 60 countries, available in 260 countries availability, hundreds and hundreds of millions of users.

WORKING WITH LINE

MediaNama: Around $700 million in revenue last year…
Mark Wheatley: Nobody imagined that you can generate these sort of numbers from it. We’re already, as part of the divestment process, having productive conversations about how we can learn from what they’ve done around revenue generation. The actual fit for us is a really interesting one because we’ve traditionally been strong in some other markets, actually we’re there looking to expand them, and LINE are very strong currently in many other markets where we are not actually operating.

I think the real opportunity, rather that trying to create an environment to bring in people in, is to actually take the music experience to people who are already having conversations about other things.

MediaNama: How does that work? Do you see a product fit in between the two?
Mark Wheatley: There will be opportunities for us to integrate, perhaps like Soundwave start to come up with messaging. Nobody else will have such a comprehensive messaging and music offering which sits so closely together. In terms of the marketing and promotion of the experience, I think you’ve got within LINE, probably the most effective app installation kind of offering service there is in the marketplace

From the marketing and distribution point of view, it is also potentially an opportunity for LINE. I mean some of those Western territories where they haven’t yet gotten significant traction, to piggyback on some of the work that we’re doing. Obviously, we haven’t defined what a lot of this stuff will be, but its certainly going to be very exciting for us.

I think the real opportunity, rather that trying to create an environment to bring in people in, is to actually take the music experience to people who are already having conversations about other things.

MediaNama: One that I can think of, simply as allow someone to gift a song. Would you move messaging into the music app?
Mark Wheatley: Nothing is off the table. I run the experiences, this is exactly what my team spends their time working on, even so I think I’d be reticent to say that, we don’t want to give people the wrong impression. What I would say is that we have, I think, been very effective in MixRadio by developing a very wide user base with relatively limited distribution on Lumia through keeping the user experience incredibly focused and simple. We have learnt some hard lessons in the past, being the team that originally created music to be a global proposition, only finally getting traction in India, where a lot of the restrictions and complications were taken out of the product. The rest of the world, the rights holders always were insistent on a lot of complexity and just made the product experience very difficult.

We found that if you overcomplicate the experience, it doesn’t matter how good the fundamental offering of the product that you’re selling because people will struggle, people will gravitate towards those experiences that are really simple and seamless. That remains at the heart of what we are focusing on bringing: simplicity. I think that will be something we protect. I’m not saying you cant put a messaging experience within the MixRadio app but I think we’d be certainly mindful of distracting users from the core use cases.