Corus and Puretracks make new deals as Spotify looms

Representatives from Canada’s digital music industry don’t seem particularly worried about competition from Spotify, the popular European music streaming service reportedly coming to this country. But that doesn’t mean the Canadian players are sitting still. Corus Entertainment Inc. is making mobile moves, and Puretracks Inc. has forged a bricks-and-mortar partnership. Toronto-based Corus recently announced that its new Alan Cross program ExploreMusic is now available via Viigo, a mobile content application platform for BlackBerry and Windows Mobile devices. Launched last October, ExploreMusic delves into news about, interviews with and opinions from emerging and established rock artists. The Viigo decision is another step in radio’s digital transformation, says David Huszar, VP and GM of interactive for Corus’s radio division. “It’s the ongoing drive to ensure that our stations and programming are available on the devices that people are using. People aren’t buying FM receivers, but they are buying smartphones.” Meanwhile Toronto-based digital media platform provider Puretracks has been scooped up by Somerset Entertainment Income Fund, also in Toronto. Puretracks runs a retail music download service and a customized album-delivery platform for a number of major music labels. Somerset distributes music through mass merchants such as U.S.-based Target and non-traditional retailers like Bed Bath & Beyond. “Somerset has the physical side and a small presence in the digital space, but they wanted to expand that,” says Andrea Ziegler, Puretracks’ CEO. Acquiring Puretracks made sense, she added. “We’re an established player already.” The backdrop for all of this wheeling and dealing is the rumour that Spotify could soon start operating in Canada and the U.S. Available only overseas at the moment, the service purports to offer free, legal and comprehensive music streaming. “Spotify’s key differentiator is streaming on-demand music – any song you want, anytime,” explains Bruce Spurr, web services strategist at Ottawa-based marketing and communication company Gordon Group. How might Spotify modify Canada’s digital media landscape? For Puretracks, the newcomer isn’t an issue. Although it does run a popular music download service – the sort of business that some industry observers think could be adversely affected once Spotify comes to town – Puretracks’ real revenue comes from its work with music labels and companies seeking music-oriented loyalty programs – “buy this product, get five free downloads,” sort of thing. “That’s the real growth area for us. It represents about half of the business,” Ziegler says, noting that Puretracks’ involvement isn’t always apparent. “A big part of our selling proposition is we don’t force our brand on customers. You have to know where to look to know it’s us behind the scenes.” Corus doesn’t seem worried. “I’m not sure it’s any different for us in terms of risk than when the iPhone came out, or even the Sony Walkman,” Huszar says. “It’s always been about the availability of portable music.... And radio should be about providing context around the music you’re hearing. Radio used to do that; I think it has a role to play there again. It’s not just a jukebox.” For Spurr at Gordon Group, Spotify might make its mark, but it won’t substantially upset the industry unless it invokes a magic formula. “The killer application is the interactive and social aspects of these services – or the service that can get that piece right,” he says, noting that none of the music streaming service providers such Last.fm Ltd., imeem Inc. and Pandora Media Inc. has “been able to navigate the rights management, on-demand availability, and fun-social features that would make it the dominant King Kong of the industry.” “Likely who will suffer the most is YouTube,” Spurr says. “It’s the primary method people use to share any song…. My Facebook feed has at least two to three YouTube links at any time…. There is currently no other convenient way to share a music track.” Stefan Dubowski is a freelance writer in Ottawa. You can reach him via sdubowski@rogers.com.

Corus and Puretracks make new deals as Spotify looms

Broadcast | September 8, 2009

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