There's A New Music Service In Town

There are a lot of music services online vying for a piece of the pie that iTunes is leaving behind, but for every single one of them it's a tougher go than what meets the eye. The license fees demanded by the major labels makes it almost prohibitively expensive to get into the market, then the royalty payout makes it even harder to stay there.

That's why when headphone manufacturer Beats by Dr. Dre purchased the streaming service MOG earlier in the year for only $14 million, the collective industry reasoning was - why? After all, MOG only had 500,000 active users and the purchase didn't even include its advertising network.

But Beats founders Dr. Dre and Interscope exec Jimmy Iovine were apparently looking at the MOG acquisition in a different way from the rest of the industry. On Thursday they named Topspin CEO Ian Rogers as the new CEO to join Nine Inch Nails founder Trent Reznor, who had been previously hired to act as creative director, of a new unnamed music service going by the code name of "Daisy."

Ian and Trent are two of the smartest guys in digital media today, and right away you have to think that they'll come up some something out-of-the-box that hasn't been tried before.

But here's where the brilliance of the MOG acquisition comes in. Basically Beats could care less about the MOG infrastructure I'm guessing. Nothing special there. But the licenses with the labels hold real value. With licenses in hand, the company doesn't have to go through the elongated and expensive negotiating process (at least not until they have to be renewed), so that leaves them free to design their own platform on a more timely basis. And both of those guys know about software development and the user and artist experience, which is why we can look forward to what they come up with.

There's yet another big advantage that Daisy could have and that's the connection to Beats. There's a lot of customers who love the product and would be predisposed to trying a new service. Plus it could be offered with the purchase of a new Beats headphone in the future.

You can read an excerpt of an Ian Rogers interview that he did for the Music 3.0 guidebook. It's quite enlightening as to his outlook on the music business.

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Is Trent Reznor Selling Out?

Trent Reznor has been an ongoing inspiration to DIY musicians everywhere, as he's written the blueprint for addressing your fans via social networks, tiered merchandising, unique marketing, and so much more (it's all illustrated in the Music 3.0 book). His announcement last week that he was going back to a major label raised some eyebrows, since signing to Sony Music is such a great departure from what he was all about for the last 3 or 4 years.

Now he recently announced on Facebook that he was collaborating with the horrendous Beats By Dre, the money play by Dre and Jimmy Iovine where they sell hi-priced yet inferior headphones to unsuspecting listeners in the name of "better sound quality." Here's his statement:

Some of you may have read that I have begun working with Beats By Dre. For the past year I have indeed been involved with Dre, Jimmy Iovine, Luke Wood, and the rest of the team on a number of very interesting projects that will start to emerge next year. I have been wanting to experiment and focus my energy and creativity in some different directions, and Beats has afforded me that very opportunity. The process has been challenging and fascinating and as much as I'd like to tell you about the things we've dreamed up... I just can't.Not yet...(I can tell you it's probably not what you're expecting!)

The Trent Reznor we know and love stands for principle and a "I'm doing it my way regardless what you think" attitude. Collaborating with Beats smacks of selling out for a payday. I guess he needs the money, but it's sure disappointing. TR was my shining example of the best of the DIY world. Time to find another hero.

If you really want to make a better sounding headphone look like Beats, here's how.

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Help support this blog. Any purchases made through our Amazon links help support this website with no cost to you.

You should follow me on Twitter for daily news and updates on production and the music business.

Check out my Big Picture blog for discussion on common music, engineering and production tips and tricks.

Beats Buys MOG

Here's something I don't think anyone saw coming. Headphone maker Beats Electronics, owned by rap artist/producer Dr. Dre and music exec Jimmy Iovine, has acquired the digital music service MOG Inc. What's particularly interesting is that the purchase price was reportedly "less than $10 million" for a service that has 500,000 registered users. Sounds like a bargain to me.

The deal makes sense at that price since Beats is trying to create an ecosystem built around their headphones. If you have a supply of high-quality tunes to listen to (MOG uses a very good 320kbs codec), that side of the company can feed the headphone side and vice versa. With Iovine being the ultimate music industry insider, any licensing problems should be easy to overcome, especially since both Universal and Sony were owners in MOG (beside 3 venture capital groups).

Beats is an interesting story in that they take some more or less crappy Chinese headphones, jack up the price to way beyond what they're worth, and somehow get people to buy them. It sort of reminds me of Monster Cable, who does the same thing. The company has now taken over more than 43% of the headphone market, I'm sure much to the chagrin of quality headphone manufacturers like Audio Technica, Sennheiser, Shure and others. You snooze you loose, guys.

Let's see if Beats continues with their magic touch as they proceed with MOG in the fold.

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Help support this blog. Any purchases made through our Amazon links help support this website with no cost to you.

You should follow me on Twitter for daily news and updates on production and the music business.

Check out my Big Picture blog for discussion on common music, engineering and production tips and tricks.