Streaming Music, Where Are We At? (2/2)

08.27.10 Posted in Blog by

Midway through 2010, where’s streaming music at? In the second part of this overview (click here for the first part) I will first look into who’s investing how many dollars in which companies. After that, I take a look at companies that are rumored to be joining the online streaming music market soon. As the ‘streaming music wars’ are well underway, who has the best chances to become the winner?

Part two: Investments and services to expect

The streaming music wars

In the race to become the biggest streaming music platform, two services stand out and are racing neck to neck: the American MOG All Access and the European Spotify. Both services are well developed and have received substantial amounts of funding during the past years ($24.9M and €71.6M according to Crunchbase). Both are busy developing new features and try to expand to new territories such as our living room.

However, while these two services seem to stand out, there are other companies to keep an eye on as well. One of them is the new kid on the block Rdio. Behind it are well experienced Internet entrepreneurs that stood at the base of KazAa, Skype and Joost too. The combination of their experience, their financial backing and their specific aim (make streaming music more social) make this an important company to take into account.

The American service Rhapsody is also a company with ambitions for increasingly crowded streaming music market. Rhapsody has the advantage of being one of the first services to pioneer online music subscription business models and has the backing of both MTV and Viacom.

What’s interesting too remark here is that the major music companies are among the investors in these streaming services. Universal Music Group and Sony BMG for example are investors in MOG and although it isn’t officially confirmed, all four majors are said to have a shared 18% stake in Spotify. These investments ensure that these majors in the future will not be dependent on micro earnings per stream only but are also able to share in the revenues that derive of the streaming music services in which they invested.

What’s next?

Although the streaming music market is already crowded (mainly in the U.S. though), key players are rumored to join in soon. The timing seems right as the technology for it is advancing and people are getting used to using cloud services more and more. So, who’s rumored to be joining soon?

Hewlett Packard.
Earlier this year, HP bought the streaming music service Melodeo for $30M. Combined with their purchase of Palm and the statement of a HP spokeswoman that said that they “expect to use this technology to deliver digital content across multiple devices and platforms” it is very likely that HP will join the streaming (music) market soon.

Google Music.
Earlier this year, Google announced that it will be launching Google Music in the near future. What Google Music exactly will look like is still unclear but with the ambitious plans for their OS Android it is very likely that they will link their new music service to their mobile OS.

iTunes in the cloud?
Rumors of a cloud-based version of iTunes have been analyzed, discussed, and predicted by many bloggers and ‘influentials’. Their acquisition of Lala in 2009, their successful line of mobile devices and the current old school character of iTunes (no sharing, no streaming) make it very easy to assume that innovations will come to iTunes/Apple soon. Next week, Apple will host a special event focused on music so confirmations about this one could be coming in soon.

All in all, the streaming music market is becoming more and more dynamic, with small start-ups growing into influential companies and big players waiting eagerly to join this crowded and rapidly developing market.

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