CNET says the streaming music service MOG has quietly approached entities in the digital music space about buying the company. MOG says they're doing just fine, but of course, have offered little in the way of numbers to back that up. Are the streaming music services starting to find the floor in the freemium race to the bottom?
These companies may reel us in with promises of free, but the truth is that they NEED us to pay. And if we're resistant to toss over a few dollars every month, they're going to fail because whispers have indicated labels aren't so forgiving with their monetary demands. Sooner or later, something has to give. We can't all win.
MOG and Rdio have been playing catch up with Spotify despite launching before the service made its way to the US. But the former's free trials and $5/month subscriptions could not compete with the latter's internet buzz and freemium offer. So they followed along, albeit, with plans that allowed users so much freedom that there really isn't a need to upgrade. The model seems to have proven bountiful for Spotify because, yes, it has the advantage of name recognition working in its favor, but more importantly, Spotify's freemium model has always been realistic. It cuts you off at a certain point so you have to subscribe to keep going. The proof's in the numbers: Just a few weeks ago the Swedish startup hit 3 million paid subscribers.
MOG has adamantly denied the report. According to the company's PR rep:
Beyond what I told CNET, I can also tell you that we have an outstanding product and continue to innovate and are always looking to build the brand and distribution. We currently have over 500K people using MOG, our deal pipe is full, and recent partnerships, specifically Verizon and AT&T, are doing phenomenally well. And, we're hiring across the board!
And that may be true, but 500,000 people using MOG doesn't mean 500,000 people are paying for MOG. Maybe the company is doing better than we suspect, but it's hard to imagine that that MOG isn't being quietly realistic about its prospects for long term success in the face of the Spotify juggernaut. Once your start giving your product for free because no one is buying, there might be no turning back. [CNET via The Verge]