However, Twitter didn’t keep the development of the app hidden from everyone. Phillips said that his impromptu office above that body shop in the Mission had some regular visitors: Engineers from Spotify and Rdio were working side-by-side in the small office to integrate their music subscription services with the app. That kind of integration also enables users to share across the boundaries of these otherwise siloed services. “We were the first company to seamlessly move between those services,” he said.

Twitter built its #music app with a small team that came to the company from Wearehunted, an Australia-based startup that was co-founded by Phillips and that had been working on social music sharing around five years. News about Twitter buying We Are Hunted broke in March, and the company launched its #music app for iOS in April.

Phillips seemed very bullish on music subscriptions, arguing that the timing is right for access-based music services: “(This) could be the year that subscriptions go mainstream,” he said, adding that Google’s move towards subscriptions adds further momentum to the trend. Phillips added that Twitter also wanted to work with subscription services to enable users to listen to whole songs, and not just sample snippets.

So why not just launch a dedicated music subscription service for Twitter users? “We want to be a sharing experience,” and not a listening experience, Phillips said.

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Rhapsody has been offering music subscriptions since 2001, much than any of its competitors, and Maples said in a blog post Monday that the company has made many of the same mistakes that he believes Spotify and Rdio are repeating now. One lesson Rhapsody learned the hard way is that ads for a music subscription service should be about the service, not artists or emotional connections:

“We tried the emotional connection to music with our Droga5-produced bubbles ad early on. The ad featured a woman who dove off a building into a bubble that immersed her into music. She dove into another bubble, and the music changed. Nice idea. Hard to understand in terms of product. Or value proposition. Or pretty much anything outside of diving off high rises, which we neither condone nor recommend.”

In case you’re curious, here is the Rhapsody ad in question:

Compare that to this much less artsy Rhapsody ad, which performed much better, according to Maples:

And here’s one of the ads Spotify is running right now:

But Maples didn’t just criticize his competitors’ ads. He also voiced some doubts about the benefits of giving away free music to promote subscription services. In particular, he took issue with a promotional campaign run by Rdio, in which the company secured exclusive content to stream for free on Rdio.com. Guesstimating the conversion rate for that promotion, he concluded:

“Rdio and Rhapsody are in the business of sourcing, identifying and enticing fans who are willing to pay for music. How you go about that is the hard part. My belief is that streaming companies have to sell the value of a music service and the benefits to customers instead of relying on an emotional connection to music, giving songs away or buying exclusive rights to a band’s new release.”

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Here are the basics of Facebook Home, which hopes to become the first stop on your mobile phone platform. Facebook Home works like this: as a layer built on top of the Android platform, Facebook essentially becomes your mobile device’s home screen providing notifications, status updates, and your feed (including large, in-your-face images) right up front. So what is it? an app? Is it an OS? We like to think it is first step to Facebook OS for the Mobile. [You can read all about it in Mark Zuckerberg’s own words.]

You can get Facebook Home baked right into the new HTC First which will be going for $99. Affordability and accessibility are two important factors for world domination, but the broader privacy implications for Facebook Home do give us cause for concern. Thank god there is no Home on iOS.

Apple’s China Syndrome: Apple loves China but China doesn’t feel that way, and its state-run media made it pretty obvious with its recent criticism of Apple. Of course, that meant CEO Tim Cook had to issue an apology to Chinese customers after being accused of “arrogance” and failing to provide the same quality of product and service befitted for other nations. Cook assured the country that Apple will work on “communication” surrounding these issues, which is said to be a good move forward for a country that could be its top purchaser in the coming years. We think Apple has to think different about China, because the dynamics of doing business are different in that country.

Video Killed the Radio Star? Not Really: Now we love our cord-cutting as much the next couch potato, but does the world need yet another video service that serves up the standard TV, movie, and music-consuming entertainment lineup? Well, apparently, Rdio thinks we do and announced Vdio. Yup, the company, after tussling with Spotify, is now going after Amazon Prime, Hulu Plus, and Apple’s iTunes.

There is one caveat: Vdio is limited (currently) to Rdio Unlimited subscribers in the U.S. and U.K., and offers shows and flicks from all the familiar places like ABC, NBC, CBS, Fox, and Comedy Central, among others. The good news is that more locations are expected soon. Rdio’s VP of Product Malthe Sigurdsson says a Rdio-meets-Netflix-like subscription service is still on the table, pay-per-view be dammed. Feeling like a movie night in but don’t know what to watch? No problem — Vdio lets you see what your friends are tuning in to, then allows you to rent or buy your selection on the spot. Just add popcorn.

Read a good book lately?: We are not sure why everyone keeps asking that question when they can easily check out our profile on Goodreads. The bookworms love the site and helped it become a powerhouse within the industry. So much so, that Amazon purchased the social network last week. Well, looks like this is going to help Amazon sell a lot more books on Kindle and give people a chance to keep talking about them — all the time. This collaboration of sorts makes sense. But don’t worry about your digital book club being “Amazon-ed” — if past experience with Zappos and IMDB is telling, it won’t be messing with a good thing. Though, we wouldn’t count out an increase in Amazon-fueled recommendations and opportunities to buy from the large-scale online retailer.

Sir, can you please spare a Bitcoin: We’ve been hearing a lot about Bitcoin recently, but what is it? Bitcoin acts as a peer-to-peer cash system that isn’t run by any banks or governments. The value you earn is off the grid, stored in mobile devices or computers, for example, and can be exchanged for real goods and services. It’s Kind of like using Facebook credits to buy gifts, except there’s no purchasing Bitcoins — it’s digital money that’s earned by solving complex computational problems. By the way, there are a bunch of guys in Tokyo who are the real dons of bitcoin. Bitcoin’s value is rising as it becomes an increasingly popular way to make and exchange currency, even being valued higher than actual currency in some countries. Will Bitcoins become the new international, border-free way to make payments? Our own David Meyer gives us a nice breakdown and answers the tough questions.

In a Blink, WebKit is dead: Or at least that is the working theory following Google’s announcement that it would be kicking WebKit, the engine powering its Chrome browser, to the curb for a forked version called “Blink.” Blink will make Chrome faster, lighter, more stable, and easier to develop for, Google argued. Google cited the current slow pace of innovation as the catalyst that spurred its decision to introduce a new rendering engine to the web, but it doesn’t come without its downsides — mainly that developers will need to test in more rendering environments, but the future of WebKit itself could be in danger. Google was its biggest supporter, so now it’s up to the likes of Apple, Samsung and BlackBerry to pick up the slack. Rob Isaac didn’t pull any punches is his must read editorial.  This can’t be good for Apple, who will now have to come up with its own twist on things. Let’s stay tuned for the next chapter.

Here are some stories you might have missed this week:

• I’m not the product, but I play one on the Internet. Interesting essay.
• The world’s favorite Italian analog notebook filed for an IPO. Surprised?
• HBO increases its cool geek cred: Game of Thrones is the most pirated show on television, and they take it as a compliment.
• America’s research libraries will soon be online.
• We celebrated the 40th birthday of the cell phone this week. Like a fine wine, it only gets better with age.
• April Fools’ Day went big this year, with more online and tech companies partaking in the shenannigans. Were you fooled by any pranks?

Read this and other in-depth articles on GigaOM’s Flipboard channel

According to figures reported by CNET and confirmed by Spotify, the company now has 24 million active users and 6 million paying subscribers across the world. Spotify is also growing rapidly in the United States, where it arrived in July 0f 2011 and is this week hosting musicians at its “Spotify House” at the SXSW festival in Austin, Texas.

Despite the hype, the underlying economics of Spotify’s business model remain uncertain. The service is beholden to musicians and studios, which request a 70 percent cut, and it must contend with a growing list of competitors that include Pandora, Rdio and SoundCloud. Meanwhile, YouTube is expected to launch a subscription service of its own in coming months and even Apple is expected to get into the streaming game too.

This competition validates the underlying premise of Spotify — that people want access to a giant catalog of music instead of buying it piecemeal through iTunes — but the arrival of deep-pocketed rivals may hurt Spotify’s ability to compete in the longterm.

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Rdio, just as a refresher, is a subscription service that tries to set itself apart from market leader Spotify with a different take on social music curation. The company offers limited free music for up to six months, but doesn’t do ads.

That’s different from Spotify, which launched a free, ad-supported mobile radio service in the U.S. last summer. The company is now looking to expand its free mobile tier to all of its 17 territories, Bloomberg reported Monday. Deals for such an offering are still under negotiation, but Spotify could start with its free streaming as early as April.

Spotify’s free mobile service is more like Pandora, offering users limited interactivity with the hopes that some are going to subscribe to a full-service offering. And the interest in music subscriptions is definitely growing: Industry association IFPI’s latest Digital Music report (PDF) claims that worldwide, 20 million consumers paid for music subscriptions in 2012. And in Europe, subscription services made up for 20 percent of all digital music revenues during that time period.

That number was largely driven by a strong showing in Northern Europe, which is Spotify’s home turf – but services like Rdio seem to bet that this success story can be repeated in countries like Austria as well.

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Amiestreet, a cult favorite of sorts, was started by Elias Roman, Peter Asbill, Elliott Breece and Eric Davich. They wanted Songza as their “night and weekend” project. However, by 2010, the writing was on the wall for them: the music buyer was going to want access to their music on all the devices, all the time.

Some surveys of their audience only reaffirmed what they were reading in the proverbial tea-leaves. It helped that all the legal hassels around the Internet radio royalty were getting resolved. In 2010, they sold assets and retail business to Amazon, allowing Roman and his cohorts to focus all their energy on Songza. Amazon is an investor in the company along with Deepfork Capital, a Silicon Valley-based investment group.

For nearly year and a half, they went into hiding and started working on an iOS app that was focused on music discovery.  They launched the service in September 2011 with deep integration with Facebook . In March 2012 the company launched Music Concierge, first on the web and then on the iPhone.

It is a feature looks at the day of the week, time of the day, device you are using and everything they know about your lifestyle to suggest the things you need a soundtrack for. It’s the first feature you see when you open the iOS app or the website. Say you are feeling blue and it is Monday morning – well, there is a playlist for that. (Actually three playlists to choose from.) In the gym? Well, here ia a playlist of jock jams. Friday night and sitting at home with your spouse? You can pick a playlist for that.

Zero to a million in 10 days

Hmmm. Doesn’t Pandora already do that, you might be asking? The answer is yes and no. Yes, Pandora uses its magical algorithm and creates playlists based on the name of the artist you like or the song you want to listen to. Songza, on the other hand, uses humans  — about 25 in total — to create playlists and then uses algorithm to help you discover those playlists. (By the way, Pandora used humans to build its music genome and then uses that to create the automatic playlists we like so much.)

Things were going rather well for them, but when 10 days ago, Songza launched an iPad app, everything simply changed. Songza’s idea of presenting mood-and-situation based playlists seems to have stuck a chord with the listeners. Songza currently is now the number one iPad app, not just music, and it is ranked number two in the iPhone app universe. In the process it has become the number one iOS music app for both the iPad and the iPhone. Today the company announced that there have been 1.15 million downloads of the iOS version of the app. (Songza also works on Kindle Fire and on select Android devices.) And if that wasn’t enough, it has been getting a lot of usage and happy users — over 100,000 of them are tuning in daily.

Roman thinks that the company is making money already — through advertising –but more importantly offering a platform-type service to bigger brands. Radio stations that want to offer a curated listening experience by tapping into their DJ artists can pay Songza money to use their platform and stream music in their apps. Powered-by-Songza is going to be a good business for the company, Roman argues.

Pandora vs Spotify vs Songza vs radio

When asked if they were competitive with Pandora, Roman was quick to add that they “compete for the same hours from listeners, and I would be hard pressed to say that they are not competition.” Others see them as a direct assault on Pandora’s existence. Rich Greenfield, analyst with BTIG Research, ranks Pandora a sell and is increasingly bearish on the company. He loves Songza and points out that being a mobile first app gives it a distinct advantage over Pandora. In a recent note to his clients, he wrote:

In many ways Songza’s simplicity and focus on mobile life reminds us of what drove Instagram’s success, as consumer web activity shifts far faster than expected from computers to mobile devices. Songza is focused on simplicity as it is built for a mobile environment, so listening only takes a few clicks, rather than having to type in the name of an artist letter-by-letter to start a playlist.

Yesterday’s WWDC news that Apple’s Siri is being integrated into the car illustrates how Apple is leveling the playing field for music applications in the car.  While Pandora issues one or more press releases a week talking about their car integration, Apple enabling Siri in your car means voice commands will enable easy navigation of your smart phone apps (Songza, Spotify, Rdio, Pandora, etc), eliminating Pandora’s current integration advantage.

It is fairly easy to assume that this is trouble for Pandora, but one has to put things in perspective. Much of Pandora’s growth came from the company’s ability to launch mobile applications. I can’t remember if I have actually heard Pandora on the web — it is either on my mobile phone or one of my Internet enabled music devices. Are Songza and Siri a challenge for the company? Absolutely. Are they going to kill Pandora tomorrow? Probably not.

Pandora by the numbers

Pandora had 53.9 million active users at the end of May 2012 (vs 51.9 million at the end of April 2012)  and they spent 1.1 billion hours listening to music on the service in May 2012, up from 1.07 billion hours in April 2012, thanks to more device makers and car makers embedding Pandora into their platforms. The advertising revenues are still on an upswing. The fact remains that Pandora and more apps like Songza along with services such as Rdio are going to continue to take “attention” away from traditional radio. Even the car makers are preparing for a connected future where Pandora, more than terrestrial or satellite radio, starts to become part of in-car listening experience.

The way I see it, Songza too is part of a greater trend of siphoning attention away from current established formats — satellite and terrestrial radio. And yes, if they keep adding 3 million people a month, then not just Pandora but Spotify too is in trouble.

When asked if he competes with Spotify, which has dabbled with algorithmic and social discovery of music, Roman said no, they don’t. I am not so sure. I think all these apps (and services) are duking it out for our ear — and it doesn’t matter what we do, there is still only 24 hours in a day.

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This tiny tweet is yet another reminder that physical media is dead. It is being replaced with “apps” thanks to  broadband connectivity and anywhere computing that has come to us via smartphones, tablets and other connected devices. From music playlists to catalogs to retail stores to television — it wouldn’t surprise me if everything is an app in short order. And that future is scary and yet full of opportunities.

Hunter’s tweet reminded me of Rock River, a San Francisco-based company that used to make music CD compilations for companies such as Brooks Brothers and Banana Republic. I remember Rock River because my old magazine Business 2.0 wrote about them. They were quite the rage in the early 2000s.

Today, these CDs are not quite as hip. Why? We listen to music via services like Spotify and Rdio and Pandora instead, and we download tracks we love from Apple’s iTunes and Amazon’s store. We watch movies and television shows streamed to us from Netflix (or one of its international variants.) Books are now digital and are growing so fast they are even worthy of a department of justice investigation.

The Container Planet

The unifying fabric behind all these new behaviors is broadband. For the longest time, physical media was the container that moved content. Records became compact discs. Movie film became VHS tapes and then DVD. Books didn’t really change. And neither did newspapers and magazines. They are all mere containers.

It didn’t matter if you read Tom Wolfe in Rolling Stone, Esquire or in form of a book. He created content (art, if you ask me) and the companies packaged and sold it in containers.  They used their distribution networks — trucks, newsstand networks and book stores – to get us to pay for Wolfe’s works.

In the post-broadband world, Internet is the truck, and app stores are the newsstand and book store. Result: the slow and steady decay of physical media as a container for content. Sure, today people still have CD players and DVD players, but tomorrow when all our music will be either downloadable or streamed to us on many devices, who needs those CD players? The shift to digital music will increase with network density — that is the number of connected people and connected devices.

Hey DJ — hit the bass

We can already see it happening. Pandora saw total listener hours for the month of March 2012 hit a cool billion – up from 975 million a month earlier and 88 percent from 567 million listener hours it logged in March 2011. In a report released earlier this year, the chief executive of the International Federation of the Phonographic Industry wrote:

The number of paying subscribers to services such as Spotify and Deezer has leapt in the last twelve months, from an estimated eight to more than 13 million. At the same time, cloud- based services, such as iTunes Match, have become a reality in the marketplace, helping drive the popularity of music downloading. With a healthy 8 per cent increase in our digital revenues in 2011 – the first time the annual growth rate has risen since records began in 2004 – some might feel tempted to say that a troubled era for the music industry is coming to an end.

These growth curves are not just limited to music. Netflix and Hulu, for example, are experiencing nice ramp in their streaming customer base. Netflix is estimated to have snagged over 23 million streaming subscribers by the end of March 2012.

The impact of this shift is going to be immense. Unfortunately, we are still thinking about the world in terms of these “old” containers. Books are being thought of as we have always known them – discrete, unconnected and for solitary learning and/or  enjoyment. Magazines as we see them today were created in an era when society was less networked and less rushed. We need to rethink these containers for a brand new always-on world, and apps are the right metaphor.

It makes perfect sense that a branded music compilation is not going to be a CD and instead an app encompasses a playlist. “What I get most excited about in branded music is the opportunity for brands/influencers/celebs to become curators,” Hunter wrote to me in an email later. Absolutely! Because now we are free from the constraints of physical, static and unconnected media. I know I have spent way too much time on the music and other media, but apps as a container metaphor can be extended to other arenas as well.

Brands as apps

Today, some of my favorite brands such as Montblanc and Cartier offer iPad apps in which they keep me informed of the new products from those companies, sometimes news events and of course they are chock full of colorful graphics and photos. In the past they would have snail-mailed me a catalog every few months, probably at great expense.

With a mobile app, theoretically speaking, I could just get an update, informing me new content is available for me to read, instead of mailing me an analog catalog. Sure their apps are limited and imagined by someone with little understanding of the technical capabilities of the iPad, but what they have is a one-on-one relationship with the brand.

Any smart brand should have capabilities to see how often I lust after a specific model of a watch and then try to convert me into a buyer. By being on my most personal of devices, they already know that sooner or later, whenever I feel flush, I will convert into a buyer. Why bother with an email, when they can send me a notification of an offer or a special discount.

Result – they don’t need to advertise as much in some magazine, or in the newspaper. As I said, the worst is yet to come! Extend apps to catalogs – a company like J-Crew could simply skip the whole idea of mailing a catalog and instead start sending me updates and offers-as-notifications.

What dogs couldn’t do, the Internet has…

The fact is that this digitization of everything is going to cause an upheaval in all sorts of industries. We are already seeing the US Postal Service starting to lose a ton of money. USPS lost $5.1 billion in 2011. A report from the GAO said that USPS has way too much infrastructure for a world which is seeing the mail volumes drop. “By fiscal year 2020, USPS expects to lose over 60 percent of the First-Class Mail volume that it had in fiscal year 2006,” the report notes. USPS has had a total loss of $25.3 billion since 2006, the last year it was in the black. Ouch!

Just like the mailman, the commercial printers are facing rough times as well. A report in PIWorld points out that after a lukewarm year, the commercial printers could expect 2012 to have similar mediocre performance, despite being an election year, when the demand for printed materials is typically high, thanks to free spending candidates.

“The most notable is investment in tablets as a printing replacement by government agencies, schools at all grade levels and certain consumer sectors,” the printing industry’s trade publication writes. From the article:

The National Association for Printing Leadership (NAPL) chief economist Andrew Paparozzi, expects “industry sales to be essentially flat this year, somewhere between up 0.5 percent and down 0.5 percent” though it is pretty good compared to “sales down 1.7 percent in 2010, -15 percent in 2009 and -5.3 percent in 2008.”

Admittedly it will be some time before tablets and mobile devices become ubiquitous, but there is no doubt about its inevitability. The ad-agencies themselves might find themselves being disrupted — for the very idea of brand advertising will change. It means opportunities for new kind of digital creative shops that go beyond mere advertising and instead build result-oriented strategies that use math, data and human emotion.

We’ll be talking with leaders in tech, media and investing about how to make the most of today’s opportunities, blurred lines and all, at paidContent 2012: At The Crossroads, May 23, at The TimesCenter in New York. Join us.

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“There are some major competitors in Europe,” Rdio’s partnerships and internationalisation VP Scott Bagby tells paidContent. “We are a couple of years behind others in terms of expansion there.

“But Europe is an immediate focus. We’ll be expanding in all countries in Europe – within the next few months, you’ll see several pop up.”

No timescale on UK launch

Rdio recently added Germany, Brazil, Portugal, Spain, Australia and New Zealand to its U.S. and Canada availability. And it just quietly soft-launched access in Denmark.

Now it has gained a PRS For Music license to play UK artists across Europe, speculation has mounted on the timescale of other continental launches, including in the UK. But Bagby said the “exact date is not set in stone”: “Lining all the stakeholders up and making them happy is extremely difficult.”

It transpired Spotify launched in Germany without being in full possession of expected licenses. But Bagby says Rdio will make sure it has all necessary rights, and a range of local music repertoire, before going in to any new country.

Europe, then Asia

“I did the international expansion for Skype, I’ve known (Rdio founders) Niklas (Zennstrom) and Janus (Friis) for some time now,” he told me. “One of the important things for them, beside product usability, is they love international expansion. So I came in in August 2010 to immediately look at international expansion. It’s always been on our roadmap.

“We already have a guy on the ground in Asia and have been talking with stakeholders out there.”

Young guns

But all the other music-access services have the same idea. Spotify, Deezer, We7 and Rhapsody are amongst those expanding to new countries. Rdio will need to fend off the throng.

Still, the segment is still young – at 2011′s end, there were only 13.4 million music subscribers in the whole world, according to the IFPI.

“The streaming space is very nascent,” Bagby says. “The general population is not familiar at all with what is going on. There is huge room for growth.”

Too many cooks?

Even so, with multiple music-subscription services entering each developed market, the scene could be set for later bloodbath.

“I think there’ll be some consolidation,” Bagby says. “But it’s definitely not a one- or two-person game. When water comes in to a lake, all the boats go up.”

Unsurprisingly, Bagby shakes off suggestion that his Rdio might be involved in that consolidation, as Mog has been to Beats Audio/HTC: “The vision for our company from the beginning was to be a strong brand of its own.”

Partner or not

For its recent Brazil launch, Rdio partnered with telco Oi on a bundled offering. Such a deal is not essential to each new roll-out, Bagby says.

“Each individual market is different. Brazil, as a developing market, has issues with scepticism on credit card payments – people trust their mobile providers a lot more.

“In Scandinavia, that’s not an issue. So is a partner in every market a necessity? I don’t think so. But, even so, if the right partner comes along, we’re very interested.”

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The new web UI resembles a desktop app like iTunes or Spotify, complete with a playlist bar on the left, a catalog view in the center pane and a social news feed on the right. It also puts a big emphasis on social interaction, making it possible for users to put together collaborative playlists with friends. Users can also compile private playlists that they don’t want to share. Rdio’s desktop apps mimick the web UI, which is available to subscribers starting today. Check out some of the changes in the promo video below:

The announcement comes some three months after Spotify unveiled its own take on the future of music subscriptions with an app platform that is integrated into the Spotify desktop player. Spotify has been the leading force in the growing music subscription market, forcing competitors to adapt and innovate, or be left behind; music subscription pioneer Napster shut down after being sold to Rhapsody last year, and MOG is reportedly in talks to be acquired as well.

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