Rumors of MOG Sale Highlight Coming Streaming Music Consolidation

Rumors of MOG Sale Highlight Coming Streaming Music Consolidation

The rumor on CNET that MOG is shopping itself around for possible sale is making news and intrigue with non-denial denials from MOG only increasing the rumblings of truthiness to the tale. But whether or not MOG is for sale is only a small part of a larger story.

MOG is considered a ‘small player’ in the on-demand music streaming industry with around 500,000 subscribers paying either $5 or $10 a month. Direct competitors include Rdio with a similar user base – though both of these are estimates and I have no clue if they are remotely accurate. They both compete with Spotify, which entered the U.S. market last summer and already has surpassed 3 million paid subscribers as of the end of January.

All three are what is called ‘on demand’ music services – quite simply, if you want to hear a specific song and it is in the library of the service you can listen ‘on demand’. Microsoft’s Zune Pass and Sony’s Music Unlimited (formerly Qriocity) are also largely on-demand services, but are too limited in scope to be considered true competitors.

But limiting the scope of discussion to purely ‘on demand’ services misses the bigger picture. When someone like my wife wants to listen to music, either she will use her iPod or just want something streaming while she is doing other things. Sometimes it is a specific track, but usually it is general ‘music’. And I assume for many people it is the same – which means that we really need to look at the broader picture of streaming music services.

Other competitors in streaming music include digital radio sources Pandora and Slacker. Pandora has made recent news after going public last year and the recent acquisition of Napster. Slacker is what I would call a ‘hybrid’ as it has a 8 million song ‘on demand’ library as well as a vast ‘internet radio’ capability that features well over 100 preset channels as well as ones you can create yourself. Slacker also offers an offline listening mode, something all of the on-demand services offer but Pandora doesn’t.

Are you confused yet? Most people are – even trying to get my kids to explain the difference between the three services I use regularly, MOG, Spotify and Slacker Premium … was a challenge. About all people are certain of is that having more than one streaming service seems like waste of money.

You can imagine where THAT is leading: consolidation.

So now MOG is very likely for sale, or at least shopping around to determine value. I would imagine that if they are smart Rdio is doing the same – having your subscriber base increase by 25% in 6 months (again my estimate) is nice … but not so great when a new competitor steps in and is suddenly 6 times your size!

Similarly, as much as I love Slacker Premium (which is enough that I would ditch everything else if I could only have one) … Pandora is the ‘big dog’ in internet radio. I think Slacker does a great job of differentiating itself, and by their last numbers has well over 20 million registered users … but it isn’t clear how that translates into paying subscribers.

Between all of the paid streaming music services – MOG, Rdio, Slacker, Spotify, Zune Pass, Pandora, Rhapsody, eMusic (kind of, anyway), Sony and more – there is an obvious overage of services. Sony and Microsoft have their services as part of a larger strategic push and are therefore not a concern. eMusic is largely a download subscription service and not in direct competition with most of the others. Rhapsody is a relatively niche company appealing to ‘old school’ customers due to a rocky history and rather obtuse UI.

That leaves five – MOG, Rdio, Slacker, Spotify, and Pandora. Pandora is flush with IPO cash and seemingly ready to buy, and Spotify is losing money but gobbling up subscribers.

There is yet another thing these guys are very likely concerned about – Apple, Amazon and/or Google entering the streaming music world. Amazon and Google already stream your purchases, and Apple has their iTunes in the Cloud service – so they are all half-way there. If any one of them went live with a full-on streaming service it could have a devastating impact.

Of course, given how distrustful the major labels are of concentrating power again after how much power Apple has accumulated, it is unlikely they want to see a monopoly in streaming services either – a fact they have likely made extremely clear to all parties involved.

So while we can be fairly sure that everyone is discussing the future … we have no idea where things will be even as soon as a year from now.

What do you think will happen in the streaming music business in 2012?

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About the Author

Michael Anderson
I have loved technology for as long as I can remember - and have been a computer gamer since the PDP-10! Mobile Technology has played a major role in my life - I have used an electronic companion since the HP95LX more than 20 years ago, and have been a 'Laptop First' person since my Compaq LTE Lite 3/20 and Powerbook 170 back in 1991! As an avid gamer and gadget-junkie I was constantly asked for my opinions on new technology, which led to writing small blurbs ... and eventually becoming a reviewer many years ago. My family is my biggest priority in life, and they alternate between loving and tolerating my gaming and gadget hobbies ... but ultimately benefits from the addition of technology to our lives!

2 Comments on "Rumors of MOG Sale Highlight Coming Streaming Music Consolidation"

  1. TMEhrlich | March 1, 2012 at 7:00 am |

    I subscribe to MOG and enjoy it. They have a huge music selection. I will watch this story closely. 

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