Mobile carrier Cricket Communications announced Monday it surpassed 500,000 subscribers to Muve Music, the unlimited music service it bundles with mobile service.
About one year after launch, Muve Music has quietly amassed about half the subscribers as Rhapsody, the U.S. leader in paid subscribers, and could be ahead of Spotify, which was reported to have 250,000 U.S. subscribers back in October.
"It definitely performed above our internal expectations," SVP Jeff Toig tells Billboard.biz. Muve Music debuted in January 2011 and was available in all Cricket markets - about a third of the U.S. - by May. Since then consumer adoption has been strong. Cricket announced Muve reached 50,000 customers on May 4 and 100,000 on July 7. Based on information from sources, Billboard.biz reported on Sept. 8 that Muve Music had exceeded 200,000 customers.
Muve Music is the only music service in the U.S. that was built from scratch by a mobile carrier specifically to bundle with a mobile plan. The service allows for unlimited downloads - full tracks, ringtones and ringback tones - along with unlimited talk, text and Internet. Songs are downloaded to devices and are not streamed over WiFi or the mobile network.
At launch the service was available on feature phones for an all-in price of $55 per month. Later in the year Muve Music was expanded to Android smartphones at $65 per month. By the end of 2011 Muve Music had expanded to Walmart, Best Buy and HSN. It has the catalogs of the four majors as well as Merlin, INgrooves and IODA.
Toig points to usage metrics that show customers are heavily engaged with the service: 1.5 billion song plays, 500 million total downloads, a monthly per-user average of 300 downloads and an average of over 40 hours of listening time per user per month. "This formula is really working," he says.
One of the great worries about subscription services is that they will eat into existing revenue streams such as downloads or CD purchases. Some prominent artists - such as Coldplay and The Black Keys - have withheld new albums from subscription services. A growing number of independent labels are pulling their catalogs from subscription services out of displeasure with payouts and fears customers will stop buying downloads.
But that may not be the case here. Toig says labels have been happy with Muve Music not just because of the growth in subscriptions, but because it has brought a new group of customers into digital music. "This is a business that isn't cannibalizing iTunes. It's really bringing in a completely new customer to the legal digital music economy."