It seems as though Beats Electronics (Headphone maker) is just about to acquire MOG (the popular US based music streaming service). Sources are saying the deal hasnt closed, but it is very close according to Boomtown.
MOG currently has over 500,000 active users, but they seem to be falling behind Spotify and Rdio (who lead the market). MOG is also only available in the USA, unlike competitors who are spreading their wings around the world.
p.s. Beats’ majority owner is HTC, the Taiwanese cellphone maker, which put $300 million into the company last year.
MOG initially started their service as a music news aggregator, but over the last 6 months or more they have been focused on building out their music streaming service. Thus, they are now trying to diversify and give their music news service its own identity and have now launched MOGMusicNetwork.com.
MOG CEO David Hyman says, “We wanted to make it as easy as possible for people to access the best content on our growing network of 1,300 blogs and also give brands an opportunity to do some really creative things. MOGMusicNetwork.com was an obvious solution to best serve both consumers and brands.”
Music subscription services are still yet to prove themselves in the market, but I really think they are the future of music online. Rdio is a very new player to this market, but they have already been making quite a huge stir. Rdio was co-founded by serial entrepreneurs Niklas Zennstrom and Janus Friis, who previously started Skype, Kazaa and Joost.
Rdio is set to launch into an invitation only beta later this week, but only in the USA. Rdio is a streaming based cloud music service by which users will be able to access a library of millions of songs for a flat monthly fee. Desktop and mobile access via iPhones and BlackBerrys costs $10 monthly, while desktop-only customers pay $5.
There are already a lot of players in this space, such as MOG (in the USA) and Spotify (in Europe), Thumbplay (USA) and Rhapsody (USA). A lot of people are betting that this will be the type of music service that will win out in the end, but I think there are already to many players in this market and I think it is going to be a winners market (only a couple will survive).
Disclosure: Spotify, Thumbplay and MOG are all RouteNote partners. We hope Rdio will also be a partner very soon!
Can music streaming ever be a viable alternative to hard copy and download music sales? WMG’s Edgar Bronfman has his doubts, and looking at some of the figures being published in the media they might seem reasonable. Increases in the number of users on services that provide on-demand music streaming (where you pick the track you want to hear like MOG, Spotify, and Grooveshark) correspond to decreases in music sales, while increases in use of radio’ streaming services [Last.fm, Pandora] seemed to drive more sales. There doesn’t seem to be any mystery as to why this might be; Spotify’s and MOG’s users no longer have any reason to buy music from other sources once they’re signed up (particularly as they can put their playlists on their iPods and other mobile devices if they buy a premium account), while Pandora and Last.fm’s customers have no guarantee of getting a particular track on their playlist again, so they have to buy it to hear it whenever they want. This might seem to be an open and shut case for the record labels; one service drives sales, while another cuts revenue – but it’s not quite as simple as that. Spotify has massive customer appeal, as the hordes that try and sign up every time they re-open user registration prove, and it also drives a lot of interaction with listeners; according to Spotify’s own figures the average use playlists around 15,000 tracks. The vast majority of Spotify’s users might be on the free-to-listen ad supported plan, with only single figure percentages signed up to their £10 a month premium package, but it’s clear that the proposition is incredibly attractive to consumers. The premium users represent a healthy annual income for the record labels to share with the platform; £120 a year is not an insignificant spend, and the potential for fledgling on demand platforms to increase their advertising revenue so that even the non-paying customers are generating profits for the record labels is proportional to the platforms’ desirability and popularity,
On demand services are what the consumer wants, and are proven to reduce the incidence of file sharing and online music piracy, something that unequivocally costs the music industry. Cutting off support for such services would surely drive a proportion of users back to illegal, non-revenue-generating, methods of consumption. Assessing the profitability of on demand against radio streaming will have to be done over the coming years as the platforms mature and adjust their business models, but it seems unlikely that killing off the most eagerly recieved of the net’s music biz babies just as they’re getting established would be a rational strategy for the industry.
For our part, we’re seeing tangible revenues come back for our artists from on demand services, and we’re happy to be able to help independent artists get music up on Spotify and in other online stores.
Not to be outdone by streaming competitors Spotify, who are rumoured to have gained a new funding partner (and consultant) in the form of Napster/Facebook founder Sean Parker, MOG have announced second round funding of $10,000,000 dollars, which they plan to use to take the platform into Europe, as well as funding Stateside expansion. As things stand, the two competitors are entrenching in their home territories, but the date of their confrontation on one side of the Atlantic must be drawing closer, even though no dates have been mentioned by either team. MOG’s monthly subscription is less than half the price of Spotify’s, but Spotify has major label backing, plus a vocal and passionate fanbase. Pandora are keeping their heads down, and quietly getting on with dominating the internet-radio and car dashboard scene, but the clash between these two will likely define the major player in on-demand streaming. The future of this type of music consumption is far from gilt-edged, however, as Spotify are still struggling to up their paid (£9.99 a month) subscription rates to supplement their ad-funded service, while MOG are operating at about a 17% conversion rate from their free trial to a $5 a month subscription. Whether either of these approaches will be successful enough to fund them in the long term remains to be seen, but given the high level of uptake, there is certainly a market for on-demand. Who gets to service it is currently being decided.
The debate on music piracy is a bit like that on global warming; vocal and vehement, and extremely polarised (pardon the pun). Evidence can be produced to support the most extremeopinions, and is wrangled over until those in the middle don’t know what is believable. Consensus seems to be that even though music pirates are active music fans, and likely to be buying music as well as ‘stealing’ it online , piracy is damaging to sales of actual music tracks, although this may be slightly offset by increased gig attendance and other types of premium content purchase – box sets, t-shirts etc.
It also seems to be accepted that legal methods of ad supported, free-to-the-consumer streaming is the best way of combating the rise of piracy – the great user experience that Spotify has been able to offer has seen it expand faster than it can deal with; attracting users to use a great free streaming service isn’t hard, but finding a way of profiting from all those users is, balancing ad revenue against streaming and licensing costs, and Spotify’s launch in the States has had to be delayed while they evolve their model, and figure out how to move people onto their £10 a month premium service.
While they figure this out, MOG is stepping up to the plate in the States with their £5 a month subscription only model, that allows playlisting and file searching in a pretty similar way to Spotify’s interface [see the video at the bottom of this post]. A poll conducted by Demos (a company that sends people out with clipboards) suggests that revenue (income and adoption) would be maximised at the £5 price point:
But this doesn’t account for the costs inherent in delivering the amount of music that people tend to consume through such streaming services; leaving the computer streaming music all day, an individual could incur a lot of charges for their service provider.
So which footpath of digital development is going to turn out to be the music superhighway of the future? In my humble opinion, it’s going to come down to user experience: if we discount piracy as a viable future for the industry (no revenue means no artists) then we’re left with paying per track, either for streams or downloads, or for a month on month subscription service. These will remain as competing options, probably with iTunes still in pole position of the download market, given it’s current market dominance, and the relentless success of the iPod and it’s cousin the iPhone, and for the rest it’ll come down to whoever provides the slinkiest, most versatile service for whatever the music industry decides is the rock bottom price per stream, plus the minimum streaming cost. I for one hope that the big 4 accept thatad-supported music streaming is the best and only real way of putting an end to piracy, that they come to terms with the smaller license fee and infrastructure that will be demanded by this model. Of the options currently available, I think that Spotify has the most user friendly platform, I’m proud that we’re working with them, and I suggest that you upload your music to their service, via RouteNote’s digital music distribution platform right…. Now.
MOG has provided a quick intro to their new music streaming service that will be launching very soon in the USA.
There currently is a lot happening in the music space online, with Spotify delaying their launch in the USA, and Myspace Music possibly moving over to a subscription model. MOG music streaming service only costs $5 per month, which means it could be a great little option away from these other major players.
Search looks to be extremely fast, with intelligent auto-complete. Adding songs from various places in the service is simple (compare to MySpace Music, which is still cumbersome after a year). And users can make the playlists private or public.
MOG, the very popular music portal and blog network, has closed a new $5 million funding round. In total MOG has now raised over $12.5 million in funding since being founded in 2005.
MOG has been having an amazing year in which included a relaunch of their homepage in April which then included music news, reviews and more. The MOG network now sees over 8 million unique visitors a month, with over 700 blogs that generate over 6,000 posts a week.
MOG is a great network of sites which getting on their homepage would mean a nice jump in actual sales. MOG is doing really well at the moment with their new strategy, but they have an unlaunched music streaming product which was previewed back in January by Techcrunch which would be an amazing addition. The music streaming product never launched because only two of the four major labels were on board. If MOG was able to get these other major labels on board then Im sure their service will grow a lot faster and be a prime target for even more investors.
Music subscription services are still 
The debate on music piracy is a bit like that on global warming; vocal and vehement, and extremely polarised (pardon the pun). 
MOG
