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Next Mobile Battleground Is Music Subscription Services

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The mobile music scene is once again a hotbed of startup activity. In the first wave of innovation, the focus was on ringtones. Now the fashionable thing is music subscription services.

The list of companies dabbling in the space are too many to count. Just this week, a Berkeley, Calif. startup called MOG, which has raised about $25 million in venture capital, said it has finally received Apple’s approval to be on the iPhone. Separately, MSpot’s service, which provides a cloud-based service accessible through a browser, launched on Android phones.

While nearly all of them have a desktop component — and subscription music has been around for years — what differentiates this boom in activity is that it’s being driven by mobile phones first. Michael Gartenberg, an analyst at Altimeter Group wrote on Twitter today: “Music subscription service market is getting crowded again. Mobile is a key element this time around. Expect a shakeout to start soon.”

Providers range from Thumbplay, a ringtone provider, to Rhapsody’s long-standing music service, as well as to internet and mobile giants, like Apple (NSDQ: AAPL), which bought streaming-music service Lala and has since shut it down, and Google (NSDQ: GOOG), which is building its own music service for Android phones. Another service is Seattle-based Melodeo, which was purchased by HP last week. Melodeo

7 Responses to “Next Mobile Battleground Is Music Subscription Services”

  1. edekema

    Music subscription – pay the carrier for bandwidth, pay a service for access. My iPhone holds thousands of songs and already goes with me. It should be able to connect to any media device, any where, and play over that device.

  2. mocorocker

    Has anyone ever made money out of selling digital music alone? No.

    Labels take the lion’s share and whomever wants to take the loss is because they sell something else…like cell phones (Apple, Google, Nokia, etc). One of the many many examples was that “Comes with Music” fiasco.

    As things stand, there is no feasible/profitable model for a pure play music service. Period.

    Only morons keep investing in a business that has failed so many times (Napster, Rhapsody, Imeem, Qtrax, you name it … Dada, Thumbplay, MOG coming soon).


  3. These “music subscription” conversations continue to miss the same major point over and over again – the license and royalty fees.

    The record label want pay-per-play and I haven’t seen anything that proven otherwise. If the record label wants .05 per play per song, will the $5/month consumer stay under 100 songs a month to keep the company not taking losses?

    This is simple straightforward math and it appears subscription will not be able to replace download because the subscription model is taking a gamble on consumer usage of digital plays.

  4. A. L. Flanagan

    Subscription services will never fly as long as they’re locked down by DRM or restricted to a subset of music. If they want to compete with file sharing, they need a) reliable, fast downloads; b) easy access to anything the customer wants; c) easy transfer between devices, and no hassles. It can be done, unlike shutting down file sharing, which is a futile effort.

  5. Perhaps in the US, but on this side of the ocean there’s hardly any activity, because of licensing issues. I think we’ll be seeing more of a geolocation & augmented reality battleground here.