Get Ready For Another Streaming Music Service: The Ad-Free

Spotify and Pandora (NYSE: P) may be the music brands people think of today when it comes to streaming services. But with only five million consumers using services like these today, there is clearly an opportunity for another player to emerge to try to pick up more. Enter a new service launching today:

Spun out as a standalone company by Omnifone — the cloud-based music company that powers services like Sony’s cloud-based music offering, as well as several carrier-led music services — is banking on a mass-market approach as the cheapest, easiest-to-use music streaming service in the market.

Designed as a service that “even your grandmother can use,” the interface is based around scrollable menus with album and track pictures as well as various channels designed around music genres and moods.

It will kick off with a catalog of 10 million tracks covering music from all the major music labels and several small ones, and launches in some 16 markets today, including the UK and U.S., and will be in 23 markets by the end of this week, including China, altogether covering some 900 million users.

Instead of offering free, ad-based options to draw users in and potentially upsell them to paid, ad-free services, is offering only ad-free options, with a $/£/€4.99 per month service letting users stream songs, and a $/£/€9.99 per month option letting users store tracks on their devices. Both services being with three-month trials for either 99 cents or 1.99 per month.

Considering how many streaming services are available on the market today, you could view launching with only paid offers is either a very bold move — or a foolhardy one. There could be revenue from day one, or it could mean that very few people sign up when the cost of entry is nothing for rara’s competitors.

From today, there is an app available in the Android Market, and the company will also be launching an app for iOS and Windows Phone “in the very near future,” according to Rob Lewis, the chairman of Omnifone and, at a presentation this morning in London. is also available via web browsers.

And, not to overlook that a lot of the growth of iTunes has been down to Apple (NSDQ: AAPL) also selling hardware, has signed a deal to have its own real estate on devices: HP (NYSE: HPQ) will preloaded the service on all its devices from 2012. That could be a useful partnership, considering that HP is still the world’s biggest PC maker (even though it fears Apple will overtake it next year): another streaming company, 7 digital, told us last week that it’s preload partnerships with Samsung on its mobile devices has led to an enormous spike in the take up of its service.

One other notable detail: will be enlisting the help of big-name artists as “associate editors” to “curate” playlists and radio stations for the service. The first musician to work with the company will be Grammy award-winner Imogen Heap. Others will be announced in due course, the company said.

Although the most tech-savvy music lovers have dipped their toes into digital music in one form or another, the reality is that digital music is still a niche service, which either spells a big challenge for and its many competitors — or an opportunity. Some 94 percent of people still listen to CDs rather than digital music, according to a survey from Loudeye, which also noted that only 28 percent of those consumers surveyed have purchased digital music recently.

Unlike other streaming services that let users effectively “buy” tracks for lifetime use, for now will not be giving users that option. That is to say, if a user cancels his or her service with the company, their playlists and tracks will disappear.

Labels, artists. is partnering with all the major music labels, and “a host of” smaller labels from day-one, but Lewis also acknowledged that there is still some way to go with more independents, especially in local markets. “We are licensing Chinese Canto Pop,” Lewis offered as an example. “Hopefully that will be there by January.”

Canto Pop is one thing; but another big omission are the various independent labels represented by Merlin.

That includes Rough Trade and Beggars Group and such artists as Adele, Arcade Fire and Grizzly Bear. As such, Adele is represented by only one song, from a compilation, while there are no tracks from the other two bands — or, it seems, the hundreds of other musicians represented by those labels. “Omnifone did not give Merlin time or opportunity to even make a deal,” said a spokesperson.

Also notable that for now is only working through labels: no deals to let unsigned artists self-publish on the service so far, so no YouTube-like viral sensations will be coming out of the service.

Artists will get paid per track played, rather than as a flat license fee: the more a track is played, the more he gets paid. No details on the actual revenue shares, except to note that they vary depending on the label and region where the track is getting played.

Social, API elements. will let users share what they are listening to on sites like Facebook, but not actually listen via those sites themselves. It looks like there will be an API eventually, too, aiming to put the service into cars, for example.