Wednesday, 14 October 2009

Will MOG's sub float?

After all the discussion of Spotify's business plans and its 'will-it, won't it' viability (see The 1709 Blog here), the Guardian brings news of MOG, which it terms a "music blogging website" which plans to diversify into paid-for streaming service. According to this article MOG, which started in 2006 and boasts more than 8.5m users, says it will launch its own streaming music service later this year for American customers, having secured deals with all four major record labels. How does it add up in financial terms?
The service will give customers who pay $5 (£3.14) each month the chance to access millions of tracks on demand - a scheme that will put it in direct competition with rivals like Real's Rhapsody and the re-invented

Details of MOG's so-called All Access scheme remain relatively light, but chief executive David Hyman said that he planned to "set the music bar" with an offering that could mount a substantial challenge to existing services.
As the article correctly points out, "the jury is still out on subscription services, which - despite having been attempted many times - have failed to live up to their potential". Problems in need of a fix, according to the article, include consumer apathy towards monthly fees and high royalty payments for on-demand music delivery online. Competition is presumably not seen as a "problem" in this context.

MOG is reported to have significant financial backing, sitting on $12m from investors which include Sony BMG and Universal Music Group.

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