Muve'ing On Up:
-- Cricket's Muve Music subscription service doesn't get the media attention of its peers, but it has surpassed 250,000 subscribers and appears to paying dividends for the mobile carrier. Cricket parent company Leap Wireless revealed the latest milestone and other details in the third quarter earnings it released Tuesday.
Muve's announcement of the 250,000 milestone comes just two months after it announced reaching 200,000 subscribers and roughly four months after news broke that it surpassed the 100,000 mark. Cricket launched Muve in late March. Based on numbers from sources and media reports, Billboard.biz estimates Muve ranks behind Spotify but ahead of Rdio and Mog.
Muve differs from its peers, however. Cricket, a provider of a pay-as-you-go mobile plan, bundles the unlimited music subscription into a $65-per-month package that includes unlimited talk, text and web plans. The cost of the smartphone is separate.
Achieving a quarter of a million subscribers is just part of Muve's story. The numbers released Tuesday indicate the subscription service is having the type of impact people have hoped subscription services can deliver: average revenue per user (ARPU) is up and churn is down. Cricket's ARPU in the third quarter increased to $41.75 per month, up 2.7 percent from Q2 and 11.1 percent year-over-year, which the company attributes to "the adoption of smartphones and Muve Music devices and related service plans by a third of our voice customers." Churn, which represents the subscribers who leave a service in a given time period, decreased 1.8 percentage points to 3.4 percent in the quarter.
Muve has gone relatively unnoticed in 2011 - by everyone but rights holders who have noticed the service take off. Newcomers Spotify, Mog and Rdio get more media attention; rare is the tech blog that mentions Cricket or Muve.
But Muve is proving a concept that subscription music can be a viable value-add service to telecom customers. To a mobile provider or ISP, the value in a subscription service is not just the revenue the service directly generates. A music service can also provide value by helping the telecom retain customers. Churn is expensive because a company must incur the costs of attracting and signing up new customers to replace them. Keeping a customer tends to be cheaper than getting a new one. And value-added services attract customers to more expensive levels of service. Nearly half of all new handset sales in Q3 were for smartphones and Muve Music devices. With the transition from feature phones to smartphones comes more expensive service plans.
To hear more about how Cricket has built Muve, watch Jeff Toig, VP/General Manager at Muve Music, give a presentation titled "Muve Music's Unique Approach To Product & Business Model Innovation" at Billboard's FutureSound Conference. The event will be held at Terra in San Francisco on November 17 and 18. Click here for registration information.
( Press release)
Information Wants To Be Free Rebuttal: The NY Times & Coldplay Model
-- It seems appropriate to discuss the latest New York Times subscription numbers on the same day the SoundScan figures for Coldplay's new album were released. Both items show that people will pay for content even though much of today's thought leadership tells content owners to offer far less restricted access to their products online.
First, an asterisk: Coldplay and the New York Times are in a rare group. There are few artists or newspapers that are of such high quality, or are so popular, that they can take forceful steps to encourage consumers to buy their digital products. Not every publication is the New York Times. Not every band is Coldplay. They get to play by a different set of rules because they are incredibly popular.
But the New York Times is in a rare position, and it can make subscriptions a focal point of its digital plan (readers are given 20 free articles per month and are asked to acquire a monthly subscription thereafter). The controversial digital subscription plan, launched in March, seems to be working so far. Combined digital and print subscriptions for the six-month period ended September 30 stood at 1.2 million, up 25 percent from an average of 917,000 in period of October 2010 to March 2011.
The Times' decline in physical subscriptions was helped by an increase in digital subscriptions. Print subscriptions fell to 771,000 in the latest six-month period from 816,000 in the prior six-month period. Print subscribers get free, unlimited online access.
Similarly, Coldplay made a concerted effort to push consumers to purchase rather than stream its new album, "Mylo Xyloto." The album was not made available to subscription services in its week of release, and the official YouTube videos made clear attempts to steer people toward purchasing the album.
And the efforts appeared to have paid off. "Mylo Xyloto" debuted at #1 on the Billboard 200 with first-week sales of 447,000, according to Nielsen SoundScan. An incredible 67 percent of those sales - or 302,000 - came from digital album sales. An additional 652,000 digital tracks have been from the album. While it's difficult to say just how much Coldplay's strategy played into first-week sales, it doesn't appear to have hurt one iota.
Crowdsourcing Music Licensing
-- Crowdsourcing is everywhere these days - even music licensing. Getty Images Music has partnered to help independent musicians license their music for use in TV, films, advertisements and web production. Getty will tap into Indaba's 600,000 musician clients to fill the on-demand needs of its clients.
The first round of the partnership, called "The Hot Sound," asked Indaba's musicians to create songs in a pop style similar to songs such as LMFAO's "Party Rock Anthem" and "On the Floor" by Jennifer Lopez featuring Pitbull. Getty will add the submission to its database and shop the songs to clients.