Beyond Oblivion, the online music marketplace partly owned by Rupert Murdoch’s News Corporation (NSDQ: NWS), has secured $77m (£47m) in additional investment ahead of its worldwide launch later this year.
The fledgling company plans to unveil its “liberated music” marketplace in September. Negotiations with the four major record labels – Universal, Warner Music, Sony (NYSE: SNE) and EMI – are at a “very advanced stage”, according to the Beyond Oblivion founder and chief executive, Adam Kidron.
Unlike existing digital music services such as Apple’s iTunes and Spotify, Beyond Oblivion is a cloud-based service allowing users to store and share music across multiple devices – MP3 players, mobile phones, and computers. It pays a royalty to rights holders each time their music is played, as opposed to a one-off initial transaction fee.
“This deal really shows that there is a high-value investor [News Corp] prepared to say that there is an alternative business model for music,” Kidron told the Guardian. “For us it’s huge because it gives us the money to go to market and for the major label advances.
“We’re going to launch with $500 million revenue guarantees, and we pay a large proportion of that – between 70 percent and 90 percent – back to content owners.
“If you compare that to Spotify’s revenues to date it’s much needed and important from the perspective of growing the size of the market and pushing revenues back to content creators – after all, they’re the vital energy of the whole system.”
News Corp and the global charity foundation Wellcome Trust led the latest funding round. News Corp first invested in Beyond Oblivion in April last year as part of $10m second-round funding.
The News Corp chief digital officer, Jon Miller, added: “Our additional investment in this business serves as an endorsement of the progress that Beyond Oblivion has made in bringing this innovative new music product to market.”
This article originally appeared in MediaGuardian.