Sunday, January 13, 2013

There's A New Music Service In Town

Beats by Dr. Dre image from Bobby Owsinski's Music 3.0 blog
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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Check out my Big Picture blog for discussion on common music, engineering and production tips and tricks.

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