Thursday September 15, 2011 4:40 pm
Rdio and MOG prepping ad-free no-cost option for their music catalogs
Rdio said late Wednesday night that the service plans to provide free access to its music catalog without advertising, leading to speculation that social sharing might be the next business model.
MOG reportedly plans to announce a similar strategy on Thursday, and other music services are expected to follow suit. When Spotify launched in the U.S., it too pursued a free model, and more than 1.4 million people have signed up, according to reports. It's all leading up to an expected launch of Facebook Music next week, where social advertising could pay for the "free" services.
"Continuing on its first-to-market strategy, Rdio will soon be launching free access to its music catalogue without advertising," a spokesman said in an email on Wednesday night.
The offering will be available in the very near future and available to any consumer, with no need for a credit card, Rdio's spokesman added.
"Rdio was built for sharing and discovering music, and Rdio's free access users will have the same uninterrupted experience featuring the best music discovery available today. Rdio free access users will have access to all of Rdio's content (over 11 million songs and growing), including exclusives. Rdio offers free access without the burden of ads, and requires no downloads, invites or credit card information to enjoy the service.
"Rdio believes that giving users the opportunity to truly experience the service without the distraction of advertising is a great way to showcase the product and is confident that those who experience it will see the value in becoming a subscriber," the spokesman said.
How will Rdio make money? That's not exactly clear, although companies are apparently seeing more value via social advertising. Gokul Rajaram, a product director for ads at Facebook, said at the TechCrunch Disrupt show that the majority of ads on Facebook now are social ads, where "the brand is filtered through your friends," he said. Social ads may appear as sponsored Wall posts once a user "likes" a brand, a more indirect form of advertising.
The question, however, is whether users will truly get access to an unlimited number of playbacks of a given song. Spotify has hinted that its unlimited model may be pared back, probably to something akin to Spotify's European terms of service, which allows only a limited number of plays of a given song before users must subscribe.
"There's no reason to believe that Spotify's terms will be less restrictive in the U.S. than overseas," said one source in the music industry. "The labels want to protect the U.S. market."
Rdio representatives were not immediately available for comment after hours.
This article, written by Mark Hachman, originally appeared on PCMag.com and is republished on Gear Live with the permission of Ziff Davis, Inc.
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