8tracks Launches Audio Ads in Canada With LeanStream

8tracks and leanStream8tracks, the third-largest internet radio service among U.S. millennials, and leanStream, the largest audio ad marketplace in Canada, have announced a new partnership.

After a successful roll-out of audio ads in the US, 8tracks will now offer audio advertising in Canada with leanStream. 8tracks boasts 3,000,000 handcrafted playlists and a large audience in Canada, with nearly 90% between the ages of 18-34.

Audio ad units will include pre-roll, mid-roll and special sponsorships such as branded playlists and first impression takeovers. Thanks to 8tracks’ crowd-curated approach, every playlist on 8tracks has tags that marketers can use to target advertising, including hundreds of thousands of moods, activities, genres, and artists. Clients can run audio ads alongside select tags. For example, a coffee company can run ads on playlists with tags such as coffee, chill, cafe, morning, breakfast and wake up, or a fitness company can run ads on playlists with tags like running, workout, gym, cardio, and motivation.

“Our new audio ad partnership with leanStream gives marketers access to our Canadian audience in highly-targeted ways, even when listeners tune in from a mobile device that’s tucked away in a pocket,” noted David Porter, 8tracks’ CEO and Founder.

leanStream will exclusively represent 8tracks in the Canadian market. Audio ads are available to advertisers with a managed service or through programmatic deals. In the move, Jesse Haw, previously Partnerships Director for Canada at 8tracks, joins the leanStream team. Jesse will continue to build out unique executions for 8tracks as well as other clients.

“We are fully committed to the development of digital audio sales as a source of high-value audio inventory placements for advertisers and revenue for broadcasters, music streaming services & podcasters. We are excited to add 8tracks to our substantial digital audio ad marketplace for advertisers.” Said Chris Nimigon, CRO and Partner.

Unlimited free streaming is back!

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Thanks to our much-appreciated 8tracks Plus subscribers and the recent introduction of new audio adswe’re beyond excited to say goodbye to the loathed weekly free listening limit for people in the US. Now, listeners can stream 24 hours a day, 7 days a week, 52 weeks a year, all for FREE!

And it gets even better; the 1-track limit for logged-out listeners has also been removed, so now when you share a mix with friends, they can hear the entire thing right away. We promise this isn’t some cruel joke; go ahead and share any of these mixes with a friend to see for yourself!

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We’ve faced lots of challenges over the past couple years, but with the help of our community, we’ve been able to make excellent progress towards overcoming each obstacle. It’s truly a fact that 8tracks exists because of you – the avid DJs, investors, and listeners responsible for it all.

And the fun is just getting started! We have a newly-released Spotify integration, an upcoming Alexa integration, and a bigger, new music library on the way which will eventually support mix-making in our mobile apps.

To see more of our upcoming projects and be an active part of 8tracks’ future, join us here on Wefunder where we’re about to launch a new crowdfunding round which will allow investors to own shares in 8tracks and receive a lifetime upgrade to ad-free 8tracks Plus. Over $100,000 worth of shares have already been reserved by 400+ investors since our Wefunder profile opened last week.

Reserve shares in 8tracks

 Thanks for your support!

–David Porter | CEO & Founder, 8tracks

 


8TRACKS’ OFFERING MATERIALS MAY CONTAIN FORWARD-LOOKING STATEMENTS AND INFORMATION RELATING TO, AMONG OTHER THINGS, THE COMPANY, ITS BUSINESS PLAN AND STRATEGY, AND ITS INDUSTRY. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON THE BELIEFS OF, ASSUMPTIONS MADE BY, AND INFORMATION CURRENTLY AVAILABLE TO THE COMPANY’S MANAGEMENT. WHEN USED IN THE OFFERING MATERIALS, THE WORDS “ESTIMATE,” “PROJECT,” “BELIEVE,” “ANTICIPATE,” “INTEND,” “EXPECT” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS, WHICH CONSTITUTE FORWARD LOOKING STATEMENTS. THESE STATEMENTS REFLECT MANAGEMENT’S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE THE COMPANY’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN THE FORWARD-LOOKING STATEMENTS. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE. THE COMPANY DOES NOT UNDERTAKE ANY OBLIGATION TO REVISE OR UPDATE THESE FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER SUCH DATE OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS. THE COMPANY IS “TESTING THE WATERS” UNDER REGULATION A UNDER THE SECURITIES ACT OF 1933. THIS PROCESS ALLOWS COMPANIES TO DETERMINE WHETHER THERE MAY BE INTEREST IN AN EVENTUAL OFFERING OF ITS SECURITIES. THE COMPANY IS NOT UNDER ANY OBLIGATION TO MAKE AN OFFERING UNDER REGULATION A. IT MAY CHOOSE TO MAKE AN OFFERING TO SOME, BUT NOT ALL, OF THE PEOPLE WHO INDICATE AN INTEREST IN INVESTING, AND THAT OFFERING MIGHT NOT BE MADE UNDER REGULATION A. IF THE COMPANY DOES GO AHEAD WITH AN OFFERING, IT WILL ONLY BE ABLE TO MAKE SALES AFTER IT HAS FILED AN OFFERING STATEMENT WITH THE SECURITIES AND EXCHANGE COMMISSION (SEC) AND THE SEC HAS “QUALIFIED” THE OFFERING STATEMENT. THE INFORMATION IN THAT OFFERING STATEMENT WILL BE MORE COMPLETE THAN THE INFORMATION THE COMPANY IS PROVIDING NOW, AND COULD DIFFER IN IMPORTANT WAYS. YOU MUST READ THE DOCUMENTS FILED WITH THE SEC BEFORE INVESTING. NO MONEY OR OTHER CONSIDERATION IS BEING SOLICITED, AND IF SENT IN RESPONSE, WILL NOT BE ACCEPTED. NO OFFER TO BUY THE SECURITIES CAN BE ACCEPTED AND NO PART OF THE PURCHASE PRICE CAN BE RECEIVED UNTIL THE OFFERING STATEMENT FILED BY THE COMPANY WITH THE SEC HAS BEEN QUALIFIED BY THE SEC. ANY SUCH OFFER MAY BE WITHDRAWN OR REVOKED, WITHOUT OBLIGATION OR COMMITMENT OF ANY KIND, AT ANY TIME BEFORE NOTICE OF ACCEPTANCE GIVEN AFTER THE DATE OF QUALIFICATION. AN INDICATION OF INTEREST INVOLVES NO OBLIGATION OR COMMITMENT OF ANY KIND.

Launching on WeFunder Soon

8tracks and WeFunder unite!

In 2016, 8tracks became one of the first startups in history to become directly owned by the people who use it, thanks to 4,000 DJs, listeners, and angel investors who participated in the crowdfunding round. All of our investors received a lifetime upgrade to our premium, ad-free service, 8tracks Plus. We’re pleased to announce that a fresh crowdfunding round (with the same perks) is coming soon.

In our first crowdfunding round, a number of investors were unable to participate because of a variety of issues and limited payment methods. In this new round, we’ve partnered with WeFunder – a user-friendly company that offers streamlined payment methods, accepts investors from outside the US, and self-describes as “a place where you can invest in the startups you love to solve the problems you care about.”

Thanks to healthy growth in 8tracks Plus subscribers as well as the recent rollout of audio ads – and associated removal of the overly restrictive, one-hour/week listening limit – we’re getting ever closer to financial sustainability. Your support will allow us to increase our focus on new features, integrations, and improvements important to the community.

Before our new crowdfunding round opens in April, we’d love to understand if you’d consider participating. Check out our WeFunder profile here to learn more about our progress and to let us know if you’d like to invest.

8tracks launching soon on Wefunder

 

8 Facts About 8tracks & The Upcoming WeFunder Round

#1. All investors will receive a lifetime upgrade to 8tracks Plus – our premium subscription service ($4.99/month) with unlimited, ad-free listening, along with access to an exclusive investor Facebook group and a shiny investor badge on your 8tracks profile.

#2. Thanks in large part to the steady growth of 8tracks Plus subscribers, we reached gross profitability last October and we’re on track to achieve net profitability by the end of Q1. To give some perspective, here are a few music streaming services which are not currently profitable: Spotify, SoundCloud, Pandora, Deezer, Tidal, iHeartRadio, Napster.

#3. Last month, thanks to the introduction of audio ads, we were able to significantly raise the free listening limit for US listeners (less than 1% of listeners reach the limit now). Early results look positive, and we hope to be able to remove the limits altogether in the near future.

#4. WeFunder offers an excellent selection of robust payment methods, including all major credit cards, bank accounts, checks, and even Bitcoin. Oh, and the minimum investment is just $100.

#5. There’s a staggering amount of handcrafted playlists on 8tracks, with over 3m curated by 765,000 DJs and more being published every day.

#6. We’re the #3 internet radio service for US millennials, with ⅔ of all streaming coming from independent labels & artists. We’re all about helping people discover great and often new music that doesn’t get surfaced by algorithms.

#7. More than $5m has been raised so far from over 4,000 investors including Andreessen Horowitz, Index Ventures, Steve Aoki, and the CEO of Atlantic Records.

#8. Here’s what funding will help us achieve over the next year:

  • Improve the listener experience with our new “Stations” concept, making it easy for listeners to search and save sets of playlists organized by taste and context
  • Simplify the DJ experience through new features, offering mix creation on our mobile apps, and offering a larger music library with content from major labels
  • Integrate 8tracks where and how listeners tune in today, ensuring 8tracks complements on-demand listening (e.g. Spotify) and is available on voice-enabled devices (e.g. Amazon Echo)
  • Sign key deals with major and indie labels to expand music library, provide offline listening, and allow more skips
  • Optimize our advertising sales process and products
  • Increase subscriptions through a better product (e.g. more features, exclusive content), and better marketing (e.g. customer referral program, optimizing price points)

And there’s so much more we’ll be able to accomplish with your help! Follow our WeFunder profile to be notified the second our round launches.

–David Porter | CEO & Founder, 8tracks

Follow 8tracks on WeFunder


8TRACKS’ OFFERING MATERIALS MAY CONTAIN FORWARD-LOOKING STATEMENTS AND INFORMATION RELATING TO, AMONG OTHER THINGS, THE COMPANY, ITS BUSINESS PLAN AND STRATEGY, AND ITS INDUSTRY. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON THE BELIEFS OF, ASSUMPTIONS MADE BY, AND INFORMATION CURRENTLY AVAILABLE TO THE COMPANY’S MANAGEMENT. WHEN USED IN THE OFFERING MATERIALS, THE WORDS “ESTIMATE,” “PROJECT,” “BELIEVE,” “ANTICIPATE,” “INTEND,” “EXPECT” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS, WHICH CONSTITUTE FORWARD LOOKING STATEMENTS. THESE STATEMENTS REFLECT MANAGEMENT’S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE THE COMPANY’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN THE FORWARD-LOOKING STATEMENTS. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE. THE COMPANY DOES NOT UNDERTAKE ANY OBLIGATION TO REVISE OR UPDATE THESE FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER SUCH DATE OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS. THE COMPANY IS “TESTING THE WATERS” UNDER REGULATION A UNDER THE SECURITIES ACT OF 1933. THIS PROCESS ALLOWS COMPANIES TO DETERMINE WHETHER THERE MAY BE INTEREST IN AN EVENTUAL OFFERING OF ITS SECURITIES. THE COMPANY IS NOT UNDER ANY OBLIGATION TO MAKE AN OFFERING UNDER REGULATION A. IT MAY CHOOSE TO MAKE AN OFFERING TO SOME, BUT NOT ALL, OF THE PEOPLE WHO INDICATE AN INTEREST IN INVESTING, AND THAT OFFERING MIGHT NOT BE MADE UNDER REGULATION A. IF THE COMPANY DOES GO AHEAD WITH AN OFFERING, IT WILL ONLY BE ABLE TO MAKE SALES AFTER IT HAS FILED AN OFFERING STATEMENT WITH THE SECURITIES AND EXCHANGE COMMISSION (SEC) AND THE SEC HAS “QUALIFIED” THE OFFERING STATEMENT. THE INFORMATION IN THAT OFFERING STATEMENT WILL BE MORE COMPLETE THAN THE INFORMATION THE COMPANY IS PROVIDING NOW, AND COULD DIFFER IN IMPORTANT WAYS. YOU MUST READ THE DOCUMENTS FILED WITH THE SEC BEFORE INVESTING. NO MONEY OR OTHER CONSIDERATION IS BEING SOLICITED, AND IF SENT IN RESPONSE, WILL NOT BE ACCEPTED. NO OFFER TO BUY THE SECURITIES CAN BE ACCEPTED AND NO PART OF THE PURCHASE PRICE CAN BE RECEIVED UNTIL THE OFFERING STATEMENT FILED BY THE COMPANY WITH THE SEC HAS BEEN QUALIFIED BY THE SEC. ANY SUCH OFFER MAY BE WITHDRAWN OR REVOKED, WITHOUT OBLIGATION OR COMMITMENT OF ANY KIND, AT ANY TIME BEFORE NOTICE OF ACCEPTANCE GIVEN AFTER THE DATE OF QUALIFICATION. AN INDICATION OF INTEREST INVOLVES NO OBLIGATION OR COMMITMENT OF ANY KIND.

8tracks + Spotify: a perfect match

8tracks + Spotify - A Perfect Match

Radio has always been the way people discover music – listeners get turned onto new artists they come to love and then buy their music to tune in whenever they want. Even with the rapid advance of technology, this path is no less true today than it was 30 years ago.

Spotify offers the ultimate version of a record store, giving access to nearly every track ever recorded, anytime, anywhere. But the trick is finding the stuff that’s just right for you. On 8tracks, nearly 1m DJs actively curate playlists, introducing more listeners to both familiar and lesser-known, independent artists. We complement the algorithmic playlisting on Spotify with a curated touch that spans every imaginable style, for any time and place.

It’s with this in mind that we’re pleased to announce our new integration on the 8tracks iOS app, allowing you to automatically save favorited tracks from 8tracks to a brand-new “8tracks Discoveries” playlist on Spotify. The gems you uncover on 8tracks can now be enjoyed with on-demand playback anytime you want.

How it works

1. Download the latest 8tracks iOS app version here (version # 3.3.72) if you don’t have it already.

2. Sign into your 8tracks account in the app, then tap this link or the images below, and follow the steps to connect your Spotify account. Or, you can just tap the  to favorite a new track in the 8tracks iOS app and you’ll be prompted to connect your accounts.

How it works

3. Once your accounts are connected, 8tracks will automatically create a new Spotify playlist in the top position titled ‘8tracks Discoveries’ where new tracks you favorite in our iOS app will be saved. That’s it!

8tracks Discoveries on Spotify
Enjoy your 8tracks Discoveries on any platform Spotify supports.

 

Connect your Spotify

 

There’s more to come on the Spotify front in the months ahead:

  • Save your favorites to Spotify on web and Android as well as iOS
  • Import your past favorites to get lost in nostalgia revisit fond memories with a soundtrack to match
  • Potential deeper integration to give DJs and listeners more ways to listen and share the music they love

Meanwhile, we’re working on an upcoming Alexa integration, which plays particularly well with all of the amazing ways our community has tagged playlists over the years; “Alexa, play me happy shower music with Journey and Michael Jackson.

And our upcoming crowdfunding round on Wefunder will directly support us as we make progress towards new integrations and features. Learn more here about how you can become an investor and get a lifetime upgrade to ad-free 8tracks Plus.

Visit 8tracks on Wefunder

Thanks for your support!

–David Porter
CEO & Founder, 8tracks


8TRACKS’ OFFERING MATERIALS MAY CONTAIN FORWARD-LOOKING STATEMENTS AND INFORMATION RELATING TO, AMONG OTHER THINGS, THE COMPANY, ITS BUSINESS PLAN AND STRATEGY, AND ITS INDUSTRY. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON THE BELIEFS OF, ASSUMPTIONS MADE BY, AND INFORMATION CURRENTLY AVAILABLE TO THE COMPANY’S MANAGEMENT. WHEN USED IN THE OFFERING MATERIALS, THE WORDS “ESTIMATE,” “PROJECT,” “BELIEVE,” “ANTICIPATE,” “INTEND,” “EXPECT” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS, WHICH CONSTITUTE FORWARD LOOKING STATEMENTS. THESE STATEMENTS REFLECT MANAGEMENT’S CURRENT VIEWS WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS AND UNCERTAINTIES THAT COULD CAUSE THE COMPANY’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN THE FORWARD-LOOKING STATEMENTS. INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE. THE COMPANY DOES NOT UNDERTAKE ANY OBLIGATION TO REVISE OR UPDATE THESE FORWARD-LOOKING STATEMENTS TO REFLECT EVENTS OR CIRCUMSTANCES AFTER SUCH DATE OR TO REFLECT THE OCCURRENCE OF UNANTICIPATED EVENTS. THE COMPANY IS “TESTING THE WATERS” UNDER REGULATION A UNDER THE SECURITIES ACT OF 1933. THIS PROCESS ALLOWS COMPANIES TO DETERMINE WHETHER THERE MAY BE INTEREST IN AN EVENTUAL OFFERING OF ITS SECURITIES. THE COMPANY IS NOT UNDER ANY OBLIGATION TO MAKE AN OFFERING UNDER REGULATION A. IT MAY CHOOSE TO MAKE AN OFFERING TO SOME, BUT NOT ALL, OF THE PEOPLE WHO INDICATE AN INTEREST IN INVESTING, AND THAT OFFERING MIGHT NOT BE MADE UNDER REGULATION A. IF THE COMPANY DOES GO AHEAD WITH AN OFFERING, IT WILL ONLY BE ABLE TO MAKE SALES AFTER IT HAS FILED AN OFFERING STATEMENT WITH THE SECURITIES AND EXCHANGE COMMISSION (SEC) AND THE SEC HAS “QUALIFIED” THE OFFERING STATEMENT. THE INFORMATION IN THAT OFFERING STATEMENT WILL BE MORE COMPLETE THAN THE INFORMATION THE COMPANY IS PROVIDING NOW, AND COULD DIFFER IN IMPORTANT WAYS. YOU MUST READ THE DOCUMENTS FILED WITH THE SEC BEFORE INVESTING. NO MONEY OR OTHER CONSIDERATION IS BEING SOLICITED, AND IF SENT IN RESPONSE, WILL NOT BE ACCEPTED. NO OFFER TO BUY THE SECURITIES CAN BE ACCEPTED AND NO PART OF THE PURCHASE PRICE CAN BE RECEIVED UNTIL THE OFFERING STATEMENT FILED BY THE COMPANY WITH THE SEC HAS BEEN QUALIFIED BY THE SEC. ANY SUCH OFFER MAY BE WITHDRAWN OR REVOKED, WITHOUT OBLIGATION OR COMMITMENT OF ANY KIND, AT ANY TIME BEFORE NOTICE OF ACCEPTANCE GIVEN AFTER THE DATE OF QUALIFICATION. AN INDICATION OF INTEREST INVOLVES NO OBLIGATION OR COMMITMENT OF ANY KIND.

Audio Ads = More Free Listening

8tracks introduces audio ads

Thanks to our community’s response to a survey last summer, and recent testing on the iOS app and website, we’re introducing a new type of ad format – audio ads – which makes it possible for US listeners to tune into a lot more free music each week!!

As we described during the rollout of listening limits in December 2016, streaming music is expensive. Selling ads through an in-house sales team wasn’t economical at our scale (then and now), and visual ads sold “programmatically” don’t consistently cover our royalties, a situation exacerbated by the prevalence of ad blockers. In short, we were losing money for every hour streamed by an ad-based listener.

To keep 8tracks running, we shifted away from a direct ad sales force to reduce fixed monthly costs; introduced a weekly limit on free, ad-based listening; and promoted unlimited, ad-free, subscription-based listening via 8tracks Plus. We also required listeners who use ad-blocking software in their web browser to whitelist us. These steps have helped tremendously: we’re still in business and closer to sustainability each month. We expect to reach monthly profitability in early 2018, which will allow us to return our focus to new features, integrations, and improvements important to our community.

Yet a listening limit is far from perfect for everyone: it’s a poor experience for our listeners, and it artificially reduces the size of 8tracks’ audience. Based on recent testing and community feedback, we believe audio ads strike the right balance between revenue generation and the user experience. While we recognize that audio ads interrupt a listener’s flow, they increase our revenue per hour by enough to allow us to stream to free listeners without an overly restrictive listening limit.

You may have already noticed a significant boost to your free weekly listening as these new ads are introduced. If you’d like to share your thoughts on this change (good or bad), just let us know here – we’d love to hear from you!

Of course, we want to make sure that you have the freedom of choice, so the “best of both worlds” scenario remains: you can always sign up for 8tracks Plus (for as little as $30 per year) and enjoy an uninterrupted, unlimited, ad-free streaming experience – all the while helping us cover the costs of royalties that support the hardworking artists you discover on 8tracks.

If you’d like to become an ultimate supporter, you can add your email here to be notified when our upcoming investment round launches soon on WeFunder. Among other perks, you’ll be able to receive a lifetime upgrade to 8tracks Plus and join nearly 4,000 other illustrious 8tracks investors. Stay tuned!

–David Porter
CEO & founder, 8tracks

Eight turns nine

As I’ve found myself saying far too frequently of late, “How has it been [some number] years since [some event] already?!” So it is with our ninth birthday, which feels to have come fast on the heels of our eighth. I’ve created a celebratory playlist for this special day, just as I did on the day of our launch.

 

Nine years ago today, my co-founder Remi worked away in San Francisco, and our lead web developer Ed in Williamsburg, putting the final touches on the live product. The team headed out to the Stanton Social in the Lower East Side to celebrate in the warm summer night. It was a good era all around: SoundCloud had just launched, Tumblr was the hottest thing around, it looked like Obama might just head to the White House. And we were just getting started.

Love from StumbleUpon the next spring (The Ocarina of Rhyme and Songs that make you feel better in particular) set us on an upward trajectory. This growth fueled investor interest. We closed our first institutional funding (Index, A16Z, SoftTech and Pete Tong, among others) and hired our first full-time employees in August 2011 — exactly 3 years after launch. Post-funding, we returned to profitability in a year and our audience grew fifteen-fold over two.

But just as most of us experience in life, 8tracks has seen its share of downs as well as ups, particularly over the last several years: Spotify’s well-funded ascent, the loss of SoundCloud as a source for DJs, the required cutoff of international streaming, several rounds of layoffs, and the introduction of a US free listening limit.

However, these hard decisions have allowed us to conserve cash; coupled with the nearly $2m raised from the 8tracks community last year, we’ve been able to make steady progress toward sustainability. Over the next year, we’re looking forward to product innovation and smart integrations. On our short list: a full DJ library on mobile, integration with Spotify, the ability to play music from your Amazon Echo or Google Home, and eventually, for subscribers, offline listening with more track skips.

We’re also firing up a fresh crowdfunding round on WeFunder. In addition to supporting the independent music service you love, you’ll get a lifetime upgrade to 8tracks Plus with your investment. Sign up here to be notified when the round launches.

Despite our challenges, we’re pleased with our path these last 108 months, and we’re happy to be able to serve our community today. Equipped with stronger financials, fresh funding and a clear plan to deliver a better experience for listeners and DJs, we’re excited about 8tracks’ tenth year. Thanks for joining us for this trip around the sun!

Password security alert

We received credible reports today that a copy of our user database has been leaked, including the email addresses and encrypted passwords of only those 8tracks users who signed up using email. If you signed up via Google or Facebook authentication, then your password is not affected by this leak. 8tracks does not store passwords in a plain text format, but rather uses one-way hashes to ensure they remain difficult to access. These password hashes can only be decrypted using brute force attacks, which are expensive and time-consuming, even for one password.

We have found what we believe to be the method of the attack and taken precautions to ensure our databases are secure. 8tracks does not store sensitive customer data such as credit card numbers, phone numbers, or street addresses.

What does this mean for 8tracks users?

Passwords on 8tracks are hashed and salted, meaning that even we can’t tell you what your password is by looking at the database. Although the decryption of one particular user’s password through brute-force techniques is unlikely, we recommend that users change their password on 8tracks and any sites on which they may have used the same password to ensure their personal security. This type of data breach is similar to those previously reported to have impacted accounts with Adobe, Dropbox, LinkedIn, Tumblr and MySpace.

We recommend that people refrain from using the same password across multiple sites, particularly on sensitive applications like email or banking software. We suggest making use of two-factor authentication and using a password manager like LastPass or 1password.

What got leaked and how?

We believe the vector for the attack was an employee’s Github account, which was not secured using two-factor authentication. We were alerted to this breach by an unauthorized password change attempt via Github, and it was verified independently by examining data from journalists and a security services company.

We do not believe this breach involved access to database or production servers, which are secured by public/private SSH-key pairs. However, it did allow access to a system containing a backup of database tables, including this user data. We have secured the account in question, changed passwords for our storage systems, and added access logging to our backup system. We are auditing all our security practices and have already taken steps to enforce 2-step authentication on Github, to limit access to repositories, and to improve our password encryption.

We apologize to those affected by this breach for the inconvenience and are grateful for your understanding and support. We are committed to doing our absolute best to protect our community and keep our users’ data safe.

 

Independent Radio and the Challenges of Streaming Music

Independent Radio and the Challenges of Streaming Music

As many of you are aware, we announced new limits for US listeners in October. We’re not happy about having to establish these limits, and we wouldn’t be taking this path if we had another option. In this post, I’d like to go a bit deeper in explaining our decision, providing more context and detailing our underlying economics, to ensure our listeners have a crystal clear understanding of why we’re taking the tack we’ve pursued.

So it began

My original conception of 8tracks dates back nearly 20 years, from the time I lived in London and enjoyed its rich, diverse electronic music culture. Inspired the culture’s focus on the DJ, I envisioned a music-based social network that democratized the role of the DJ, allowing anyone who loves music to curate playlists for others who hadn’t the knowledge or time. My belief was that music was most effectively “packaged” by people (not algorithms).

Fast-forward 10 years, I found myself bootstrapping 8tracks on a nights-and-weekends basis with a loan against my 401(k) plan, eventually launching the service on August 8th, 2008. We saw good early take-up and, by the end of 2010, began to get interest from investors. Three years after launch, on the back of a $1.2m seed round, we hired our first employees. We achieved profitability 18 months later thanks to our status as a Small Webcaster, which allowed us to pay royalties on a percentage of our revenues (rather than on a per-play basis that ignores the level of revenue generated).

The challenges of streaming music

Despite encouraging growth and even profitability, it proved challenging to raise a significant “Series A” round from traditional investors. Top venture capital firms seek startups in less competitive sectors, with more favorable economics, which they believe are on track to be valued at over $1 billion. We grew out of Small Webcaster status in 2014 and, as our royalty burden grew, we became unprofitable once again.

We’ve long believed in the advertising model, as radio — historically and still the primary way new music is both promoted and discovered — should be free to allow artists to reach the widest possible audience. Our devoted community has grown around this free, ad-supported model for years. Unfortunately, our royalty rates in the US grew by yet another 20%+ in 2016. Moreover, we saw a decline in our audience during 2015 and 2016, making the advertising model more challenging (more on that in a bit). And our crowdfunding round this year, while a great showing of support from our community, has ended up coming in at a much slower rate, and at a lower amount, than we’d anticipated based on our initial survey of the community in early 2016.

Bottom line, the royalty rates we pay are too high to support our costs with a free, ad-based listening model in the US. I know that some listeners are genuinely frustrated by the limits, but it’s important to realize that no digital music service is generating a profit. Larger services have raised billions to fund continued losses or may simply use music as a “loss leader” to derive revenue through another business line.

By the numbers

The simplest way to demonstrate our range of options is to look at the math. In the US, the sound recording royalty we pay under the compulsory license is $0.0017 per ad-supported stream, nearly 19X the equivalent rate in Canada (which is why an ad-based model on a medium-sized platform remains viable there). The economics of music streaming are typically evaluated by denominating revenues and expenses on an hourly — or “per 1,000 hour” — basis. Our average track length is 4 minutes, so multiplying $0.0017 x 15 equals $0.0255. The royalty cost per 1,000 hours (“CPM”) is thus $25.50, and this represents most of the direct cost “hurdle” we have to recover through advertising and subscription revenues.

In its most recent quarterly resultsPandora generated $58.10 in advertising revenue per 1,000 hours streamed (“RPM”). Pandora is able to cover its sound recording royalty CPM more than twice over because it reaches 78m listeners per month (making it a one-stop-shop for a brand or agency that wants to reach people who listen to music) and employs 100s of people in the ad sales function (more than ½ its team). In comparison, 8tracks’ smaller audience (4m) and sales team (7 people until our layoffs on October 4th) allowed us to generate an average RPM over the last year (through September) of $24.28 — roughly the same level as our royalty CPM.

Sufficient funding would allow us to properly invest in engineering, product and marketing, which would help us attract and retain listeners and thus serve a larger audience. A larger audience, in turn, makes us more attractive to brands and agencies, which typically wish to buy advertising on a few larger services within a particular category (e.g. music) rather than apportion their marketing budget among many services.

Based on extensive modeling, we concluded at the outset of our crowdfunding round that at least $5m but ideally $10m would allow us to aggressively pursue the growth necessary to make an ad-based model work, and we filed with the SEC  to raise up to $11m in June. However, we’ve only closed (to our bank account) $1.5m in funding over the 6 months since the launch of crowdfunding. Another $1m of “confirmed” investment has yet to be be received from crowdfunding investors or SeedInvest, and we plan to continue crowdfunding on another platform in 2017.

Our plan for the future

To make the company sustainable at our current levels of audience and funding, we have to focus on near-term sustainability over mid-term audience growth. This requires that we:

  1. Reduce fixed costs (primarily payroll)
  2. Increase RPM by shifting most of our US revenue mix from ads to subscriptions
  3. Reduce the streaming (and thus royalties) associated with ad-based listening in the US

To reduce fixed costs, we’ve decreased the size of our team. When we filed with the SEC for our crowdfunding round in June, we engaged 26 people as employees or contractors. After 2 rounds of layoffs, we’ve pared back our team to 10 people. As a result of these headcount reductions and other cost-cutting measures, our largely fixed, non-royalty expenses in December (e.g. payroll, taxes, hosting, streaming, office rent, software licenses) will be nearly one-half the monthly level we incurred prior to our first set of cost reductions in March.

To encourage free listeners to subscribe, and to reduce the royalties associated with ad-based listening, we introduced listening limits earlier this month. The additional revenue impact of subscribers is significant: while the average revenue per ad-based listener per month has historically hovered around $0.12, that figure for a subscriber is $2.99 (based on the introductory pricing available this month), a roughly 25X differential. But the listening caps also set a ceiling on the royalty costs associated with free, ad-supported listening, where the associated advertising RPM falls short of the royalty CPM. To ensure we get these limits right, we’re testing several limit tiers and will conclude on the best approach over the next week. The weekly listening limit will help 8tracks return to sustainable economics in 2017.

While we’ll settle on a largely standard listening limit, we’re also rewarding DJs who create excellent playlists with listening time bonuses. We’re also evaluating the impact of these limits on brand-new registrants and we’ll likely offer a higher initial limit for these listeners to fully appreciate the depth and personality of the 8tracks platform.

While we’re not happy about having to introduce limits on free listening, we’re thrilled to be laying the groundwork to offer subscribers great new features…

The silver lining

On a positive note, we have nearly wrapped our deal with the first of the major labels. A number of setbacks over the last year — SoundCloud removal, cutoff of streaming outside the US and Canada, and tightening of skip limits — have been required to make progress and stay in the good graces of the record labels. And now 8tracks is poised to see the upside.

Under the terms of the deal, we’ll be able to provide DJs with direct access to the label’s catalog when creating a playlist, without requiring an upload. Some music will be available without a subscription while other music will require it. In addition, the deal allows subscribers to skip tracks more frequently and save playlists for offline listening; both features will be introduced once we’ve a critical mass of direct deals to support these features. Direct deals also lay the groundwork for making 8tracks available outside the US and Canada.

But, even today, an 8tracks Plus upgrade does more than just remove the weekly listening limit:

  • Ad-free listening, always
  • No interruptions between playlists
  • Animated gifs for your playlist artwork
  • A flashy badge to show off to your friends and admirers

We’re excited by the number of listeners who’ve already shown their support and signed up to 8tracks Plus in the past 10 days, since the introduction of the listening limits. We want the 8tracks platform to continue to provide a unique music discovery experience for people who care about music, and we’re grateful for those who can help us make this transition to a new era for independent radio.

Get unlimited listening and support independent radio with 8tracks Plus

A shift for 8tracks in the US

Hey everyone,

In the coming weeks, we’re going to shift our focus in the US to our 8tracks+ subscription model, including the introduction of a listening cap. I’d like to take a moment to walk you through the background, our gameplan, and the impact on our community.

The problem: the economics of streaming music

Streaming music on the internet is expensive. So expensive that, to date, no digital music service is generating a profit. Larger services have raised billions to fund continued losses, but even with our recent crowdfunding, 8tracks has raised only $5m over the last decade. We want to build a sustainable business that doesn’t require ongoing VC funding.

We’ve historically relied primarily on the sale of advertising to generate revenue for 8tracks. The ad model works best for a service with a large audience, as brands and agencies would prefer to work with relatively few apps or websites in a particular category so their efforts aren’t spread thin. We’ve found that when we lose ad deals, it’s typically because of our audience size. As a result, it’s been difficult to generate a consistent level of revenues from one month to the next. On the other hand, in the US, we pay a high fixed royalty rate on a “per track, per listener” basis. (In Canada, this rate is one-tenth that in the US.) Our US royalty is the same rate paid by Pandora, which — thanks to its larger audience and sales team — brings in four times the ad revenue per hour that 8tracks is able to generate.

Over the past four months, our community has rallied behind us, raising $2.5m to help power our future. However, the round is half of our $5m target for crowdfunding, likely not enough to fund the growth necessary to make the economics of a primarily ad-based internet radio model work in the US, given the prevailing royalty rates.

Our solution: diversify our revenue base

Historically, we haven’t placed much emphasis on promoting our 8tracks+ subscription, but we believe it represents a big opportunity for revenue growth. Our average revenue per user (ARPU), on a monthly basis in the US, has trended at $0.12; our current 8tracks+ price point is $2.99, a 25X difference. If a meaningful proportion of our listeners subscribe, and we limit the amount of streaming (and thus royalty expense) for ad-based listeners, we can return 8tracks to profitability over the course of the next year.

To ensure 8tracks can sustain itself with its current level of funding, we’ll introduce both limits on free listening and benefits for paid listening over the coming year. The cool things in the latter bucket — more skips, offline listening, full DJ library access — are dependent on our direct deals with labels, and we’re not yet in a position to offer these as part of 8tracks+. The less cool things in the former bucket — more ads, interstitials that stop playback between mixes, weekly limits on the number of hours a free listener can stream — will be introduced in early November to encourage listeners who tune in a lot to “pay their way” directly and to cap our royalty costs for those who do not.

How will this affect investors in our crowdfunding round?

If you’ve already contributed cash to 8tracks by investing in our crowdfunding round, you will automatically receive 8tracks+ in perpetuity — for life! — which we’ll apply to your account within 30 days.

How will this affect our DJs?

Similarly, if you’ve contributed your time and passion to 8tracks by creating awesome playlists, we want to ensure your contribution is properly recognized:

  • Any DJ who’s earned the equivalent of a Gold certification (100 likes) — on a single mix or across multiple mixes, on a cumulative basis — gets 2X the normal weekly listening limit
  • Any DJ who’s earned the equivalent of a Platinum certification (1,000 likes) — on a single mix or across multiple mixes, on a cumulative basis — gets 3X the normal weekly listening limit
  • Any DJ who’s earned the equivalent of a Diamond certification (10,000 likes) — on a single mix or across multiple mixes, on a cumulative basis — gets free 8tracks+ in perpetuity (just like an investor)

To check in on progress toward these milestones, DJs will be able to view their cumulative like count across all mixes published.  Also, DJs will continue to have unlimited, on-demand access to any mixes they’ve created solely through personal uploads.

How will this affect our listeners?

US listeners who do not subscribe to 8tracks+ and who haven’t invested in our crowdfunding round will be limited to a prescribed number of hours per week. We haven’t yet finalized the threshold for this listening cap, and we’ll be testing the impact of several different caps for the first few weeks after launch. Of course, a listener can remove the weekly listening cap as well as interstitials that stop playback between mixes and all ads by subscribing to 8tracks+. As a result of substantially lower local royalty rates, listeners in Canada will not be impacted by the listening cap or interstitials but, as before, can subscribe to remove advertising.

While we wish we didn’t have to introduce limits on ad-based listening, we’re pleased to be able to offer a better user experience for all investors, many of our DJs, and a growing number of our devoted listeners, all while ensuring a healthy future for the service and community.

Thank you for continuing to support 8tracks!

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