Is Mobile Music “In The Cloud” the New Panacea?

With the announcement that US-based service mSpot has reached the 500,000 download mark for its cloud-based service two months after launch, and only on the Android OS – does this herald a new service direction for the music business? Whilst picking up a mix of free and paying subscribers within that number of 500,000 users in two months is certainly a feat to be proud of, without a specific number being released, in terms of actual paying subscribers, it is hard to judge the real implications.

It does, however, point to a definite consumer thirst for a dynamic cloud-based mobile music offering. As stated by Daren Tsui CEO at mSpot, “We speculated a year ago that the demand for cloud based entertainment would be on the rise due to the growing number of media capable devices coming to market such as smartphones(sic), set-top boxes, tablets and PCs…What we didn’t expect is how quickly the demand skyrocketed, as exhibited by our early organic growth just on Android”.

The key element here being that this dramatic growth was in only two months and only on one OS. In TMVs view, this does signal significant potential for consumer movement to cloud-based music services. Adding impetus is the $3.99 USD price point for 40 gigabytes, equal to 32,000 tracks of storage space per month. That’s roughly £3.00 per month for both web and mobile cloud access. TMV have not seen any other service competing at this price point. Does it potentially signal a new price war in the battle for the music consumer’s wallet? Numerous studies have shown that the consumer sweet spot for subscription uptake is below the $5 per month price point.

The fact this was done without being made available on the iTunes store via an iTunes app is a feat to be praised in itself! What are the implications in terms of the already declining sales of the stand alone iPod product range? Does it perhaps finally herald the clear trend of the mobile handset becoming the ubiquitous device, and where consumer usage of music, TV, video and the humble mobile telephone finally begin to converge?

Moving back to the question in the title of this post, according to internal company usage figures, mSpot users who choose both options of web or mobile-based listening for the service, 83% spend the majority of their time listening via their mobile device. Reinforcing this is a survey from Pew Research that predicts that cloud and mobile computing will overtake PCs by 2020. mSpot looks to be proving this point earlier than the Pew Report predicted. Perhap a sign of things to come? We’ll let you, our readers, make up your own minds.

As Anthony Bruno at Billboard notes “If a relatively small company like mSpot can attract that level of downloading activity on Android – which itself sees less app activity than the iPhone – imagine what a larger, more well-known player could do targeting the app-obsessed iPhone community.” In TMVs view it signals that, while there is a clear appetite for cloud-based music consumption, what it does not confirm is whether consumers are willing to pay hard, cold cash for that access to the cloud.

On a very final speculative note, does mSpot provide a unique take-over option for Spotify to purchase to enter the US market?

Related Posts:

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Posted by Jakomi Mathews on Sep 24 2010. Filed under Mobile. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.