RAIN 7/2: Beats confirms months-old rumor; acquisition of streaming service MOG now official

Michael Schmitt
July 2, 2012 - 11:35am

MOGIt's official: audio technology company Beats Electronics is acquiring music streaming service MOG, reports USA Today.

Terms of the deal have not been disclosed, but the L.A. Times and Evolver.fm pin the figure at less than $10 million. Engadget writes, "MOG is said to have raised $33 million in funding to date, so that might give you a ballpark figure."

We first heard rumors about the acquisition in March (RAIN coverage here). Beats Electronics is the company behind those iconic Beats By Dr. Dre headphones. It's also partly owned by major mobile device maker HTC (though it's "unclear how or whether" that company is involved in this deal, reports Engadget).

Evolver.fm's Eliot Van Buskirk sees possibilities for HTC though: "Between Beats, MOG, and its own stuff, HTC can now connect the dots between smartphones, headphones/speakers, and a freemium music subscription, offering ample opportunities for bundling and co-branding."

"Time will tell exactly how we integrate our products and services," said MOG founder/CEO David Hyman. "The addition of MOG's music service to the Beats portfolio will provide a truly end-to-end music experience."

"For now, MOG will remain the same product today as it was yesterday and offer the same rich experience," said Beats president/COO Luke Wood. "What we do know is that we're committed to offering an integrated experience for the consumer — from the point of discovery to the point of playback."

Beats

MOG was founded in 2005. Though an on-demand music service like Spotify, MOG has long offered noteworthy streaming radio services (find RAIN's review of their radio offerings from 2009 here). It offers 16 million songs and reportedly has around 500,000 registered users.

MOG has actively partnered with device- and automakers, including BMW, Ford, Logitech, Samsung, LGBarnes & Noble and others.

You can find more coverage from USA Today here, the L.A. Times here, Engadget here and Evolver.fm here.

Paul Maloney
July 2, 2012 - 11:35am

Last week we covered (here) Business Insider's report that on-demand music Spotify had become major music labels' second-largest source of revenue, behind the iTunes Music Store. Following up, Billboard.biz says (paraphrasing here): "Nuh-uh."

While "Spotify may be the second-largest digital account for major labels," (not paraphrasing), "Walmart can generate more music sales in one country than Spotify can generate around the world." Billboard.biz estimates Walmart had about $525 million in 2011 music revenue. Spotify total revenue was reportedly about $250 million, and probably less than $175 million went back to record companies.

Looking solely at the U.S. market, Spotify (or all on-demand streaming, for that matter) isn't even close to second-place. For instance, SoundExchange paid labels $292 million from the performance royalties it collected from satellite and Internet radio. "Subscription services as a whole returned only $132.7 million in 2011. Subscription services were also less valuable to labels than synchronization royalties ($196.5 million) and mobile platforms ($277.4 million)," the news source wrote.

Read Billboard.biz for more here.

Michael Schmitt
July 2, 2012 - 11:35am

RadionomyEuropean-based online radio platform Radionomy has partnered with digital audio ad network TargetSpot. The ad company "has the mission of commercializing Radionomy's audience in the USA," writes Radionomy.

TargetSpotThe partnership will also allow Radionomy to sell "the entire U.S. inventory of TargetSpot to European advertisers." Radionomy already markets to audiences in France, Spain and Germany. It says it counts 7 million monthly listening hours in the U.S. and is growing 5% per month.

You can find Radionomy's press release here.

Paul Maloney
July 2, 2012 - 11:35am

"Leykis holds up an Android smartphone he'd been twirling in his hand. 'This,' he said, 'is a radio.' A few finger swipes, and he's turned on an application streaming radio stations and programs from around the world, with presets for his favorites — like a car radio with a global reach. He presses an on-screen button, and the current episode of 'The Tom Leykis Show' starts playing. Plug that into a dashboard, and it's as if he never left the airwaves."

That's from the L.A. Times' story on the return of Tom Leykis, not to the terrestrial airwaves but with his daily Internet radio show (see RAIN's coverage here).

Not a podcast, that is, but a live Net radio show. "Leykis' streaming model," writes The Times, "better simulates the live radio experience for the audience, with the interaction of callers, host and subsequent callers reacting to earlier comments."

Leykis told the paper it's cost him about $1 million to get the show up and running, and that he is expecting to profit by year's end (he's offering $100/year subscriptions to his show, which include on-demand access to his archives, and he sells merchandise and on-air advertising.)

Read The L.A. Times piece on Leykis here.