Niklas Zennström and Janus Friis, the entrepreneurs behind Kazaa, Skype, Joltid and famously failed Joost, have just announced the launch of RDIO: a not-so-top-secret startup offering paid subscription-based music consumption for both PCs and mobile phones.
The challenge they face now is to get major players from the recording industry on board to supply music to their catalogue. Given their failure with Joost , for being unable to sign on big tv players to their online video platform, we hope they are prepared to fight hard. Some labels seem to be taking on their own platforms and fending for themselves, or signing on with existing players in the market (see below). On the other hand, many players have given up on music services alltogether, such as Yahoo, AOL and MTV Networks.
In addition, given that renegade p2p player Kazaa was famous for enraging the music industry, many labels might be wary to work with Niklas and Janus. That said, RDIO Ceo Drew Larner tells the New York Times that conversations with labels, such as EMI, have begun and are promising.
WHO ELSE IS IN THE MARKET
The online music scene is vast, as we reported last week. There are an array of existing music services out there vying for customer attention and a sustainable business model.
Giving RDIO a run for their money is P2P distribution platform Spotify. They are pushing hard, as they plan a US launch in Q3/Q4 while steadily growing with 2 million users across Europe. Whether their ad supported format will work in the US remains to be seen, as some record labels prefer the paid-subscription environment.
Then there is MOG, a three-year-old blogging network that recently raised $5 million from Menlo Ventures. It has inked deals with Universal Music Group, Sony Music Entertaiment, Warner Music Group and Emi Music, plus a plethora of independend lables through partnerships with Orchard and Ioda. For $5 a month, members can listen to as much music as they want from their computer; for $12 to $15, users can access music on their mobile devices as well.
See also: Pandora, Napster, Deezer, Rhapsody, and More
LEGAL WOES
Lets hope Janus and Nikals have time to develop RDIO instead of being stuck in the courtroom for legal battles. Below the main drama points:
- They sued Ebay (who owns Skype) over core technology used in the VoIP service that they own (Global Index by Joltid)
- They filed a copyright suit against eBay and the investor group that is going to buy Skype from them, Index Ventures
- They sued former Joost chairman and CEO Mike Volpi, accusing him of revealing intellectual property when he became partner of Index Ventures (see #2). See how the drama unfolded on Techcrunch
Read more about their legal battles here , here , here and here
IN CONCLUSION
As cd sales continue to plummet, the music industry today is in shambles, given the 90% of digital music consumption is illegal. Perhaps P2P is the way to go, in which case Janus and Niklas are the boys to do it.
Janus told Bloomberg via email that, “We have watched many ad-supported music businesses come and go … We felt the time was right to revisit this space, this time with a compelling offering and a sustainable subscription model.”
Its easy to dwell on the negative past (eg. Joost) but what must be said is that both Janus and Niklas have a world of experience and successes behind them. They disrupted the entertainment world with KAZAA, revolutionized VoIP with SKYPE, and have supported and funded various successful companies through their firm Atomico Ventures. Despite the JOOST flop, these guys still have it in them to succeeed. Perhaps RDIO is a challenge they know how to overcome? Lets just hope they have time for RDIO instead of fighting out battles in court.
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October 22nd, 2009 at 10:12 pm
[...] What is RDIO? Janus and Niklas new music venture [...]
January 28th, 2010 at 5:55 am
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