Why Aren't You Streaming Music?

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streaming music servicesThere was a time when you cared about music.

You made mix tapes. You went to concerts. You called radio stations, putting up with busy signals, stuffy DJs, and interminable holds because there was a song that you just had to hear.

You bought vinyl. Or CDs. Or cassettes. Or 8-track tapes. If you're recently disenchanted, you probably even bought MP3s.

The music lover in you never died, though. And there's a growing number of alternatives creeping up to make it easier for you to revisit the soundtrack of your youth or to explore new music influenced by the same artists that mattered to you.

Music is Money

Investors are hearing a lot about music streaming these days.

Niche leader Pandora Media (P) went public three months ago. Overseas fave Spotify washed ashore this summer. Tech darlings Apple (AAPL), Amazon.com (AMZN), and Google (GOOG) have all jumped into the ring with cloud-based digital music services.

Before this wave, digital music -- outside of Apple's iTunes Music Store -- was something best left ignored by earbud-donning investors.

The first time that investors were introduced to digital music, it was the handiwork of peer-to-peer file-sharing networks. The easy trafficking of unauthorized tracks irreparably damaged the record labels. CD sales went on to peak in 2000, falling every single year since -- with the short-lived exception of 2004.

Disruption turned into opportunity, as Apple set up its legal virtual storefront in 2003 as a way to cash in on the growing popularity of its iPod portable media players. Music subscription services -- where music buffs would pay a flat monthly rate for access to millions of licensed songs -- began to take off. RealNetworks (RNWK) had a hit with Rhapsody. Napster was transformed into a legal premium service, eventually snapped up by Best Buy (BBY). Microsoft (MSFT) jumped in late with its Zune Pass.

Apple is obviously still a juggernaut. It's the country's biggest music retailer, even as it competes against retailers and e-tailers that sell both CDs and downloads.

However, when music subscription services began to stall in popularity, the smartphone revolution created the means for Pandora and a new breed of music-streaming services to take off with ad-supported and premium models.

Cracking Open Pandora's Box

Pandora's success is undeniable. Revenue soared 117% in its latest quarter, as the company served up a whopping 1.8 billion hours of music during the three-month period.

The allure of Pandora is simple, once you understand how it works: Through its free website or equally free smartphone application, someone enters the name of a song or an artist, and then the music discovery site works its magic. As part of the Music Genome Project, Pandora's fleet of musician-analysts has spent more than a decade breaking down the musical traits of individual songs. The end result is a service that reliably cranks out songs -- some that you've heard, many that you have not -- more in tune with your musical taste than those on any mix tape handed you in your youth.

Those who want to skip the ads, stream at a slightly better quality, and get other enhanced features can pay $36 a year for Pandora One.

Spotify, on the other hand, is an "on demand" service. Users can stream any of Spotify's 15 million tracks and create playlists. The free service is limited to PC use and is monetized through intermittent ads. Users would have to pay $5 a month to nix the commercials, or $10 a month to stream through their smartphones as well.

Stream On

Several other sites are combinations of the two. A few minutes exploring MOG, Rdio, CBS's (CBS) last.fm, and the growing number of streaming sites will go a long way toward finding the site that best suits you in delivering countless hours of music entertainment.

If you want premium content on the go, Sirius XM Radio (SIRI) offers streaming access to most of its content as well as a few online exclusives to listeners willing to pay for the service. Sirius XM Radio's Internet offering is $13 a month for new subscribers, or just $3 a month for those with an existing activated receiver.

If you already have a deep library of tunes on your hard drive -- and all you want is more portable access to your own tracks -- that's where Google Music, Amazon Cloud Player, and Apple's iCloud come into play. All three are launching (or in the process of launching) a way to seamlessly copy your music on to their servers to make them accessible anywhere you find an online connection.

Facetunes? Tunebook?

This week should make things even more interesting.

It's widely rumored that Facebook's f8 conference on Thursday will introduce easier music integration on the world's largest social networking site. Additionally, terrestrial radio giant Clear Channel is officially relaunching its iHeartRadio app, adding Pandora-like features to the free program that streams hundreds of actual Clear Channel terrestrial radio stations.

So what are you waiting for? The options are there. The price points -- from free to as much as $15 a month -- are wide.

Isn't it time to rediscover the music lover in you that never really went away?

Longtime Motley Fool contributor Rick Munarriz does not owns shares in any of the stocks in this article. The Motley Fool owns shares of Apple, Best Buy, Google, and Microsoft. Motley Fool newsletter services have recommended buying shares of Apple, Microsoft, Google, and Amazon.com, as well as creating bull call spread positions in Microsoft and Apple.




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