Business Matters: Will Boinc's Business Model Get Stale Before It Launches?
Business Matters: Will Boinc's Business Model Get Stale Before It Launches?

Beyond Oblivion has finally released details of its device-based music subscription service. Called Boinc, the unlimited, ad-free music service will be bundled with mobile devices and PCs and can also be purchased separately.

Visitors to the new Boinc web site -- Boinc.com -- can get details and a feel for how the service will be branded (cheerfully and playfully, not unlike how the look and feel of Spotify's web site and marketing materials). As the web site explains, Boinc lets consumers "play, download and share as much music as you want for the lifetime of the Boinc'd device." The company plans to license the service to mobile phone carriers, device manufacturers and car companies. No completed licensing deals have been announced to date.

Boinc's "feels free" approach stands apart from the fixed-price fees charged by most other music services. It's the same approach Nokia tried - and failed - with Comes With Music (later renamed Ovi Music Unlimited and then phased out in nearly all markets). But Boinc has the benefit of being available on more than one company's devices - Comes With Music was limited to Nokia devices - and the service will also be available as a paid service for iPhone and Android devices, according to reports.

Launching an unlimited music service certainly isn't cheap. The company told the Financial Times that negotiations with the four major music companies are coming to an end but it needs to raise additional funds for future licensing advances. Beyond Oblivion had already raised at least $89 million from News Corp., the Welcome Trust, Allen & Company, and other investors. But the current funding is good enough for the upcoming launch, so more funds are not needed CEO Adam Kidron tells Billboard.biz.

The high cost of running a music service won't end with the advances. Boinc will pay rights holders both a 70% cut of revenues and a per-play royalty according to The Guardian. "The stream of income we pay out is a per-play royalty," says Kidron. "But if those per-play royalties don't hit the minimum, we just add to the royalties we pay to compensate for the gap." That's considerably higher than the roughly 54% of revenue Pandora most recently paid out to rights holders - and Pandora is routinely criticized as paying out too much for content.

With a few more months until launch, Boinc has not yet got the promotional ball rolling. Outside of a new round of press in the U.K. and a few conference appearances, the company has been quiet for months. The Boinc Twitter page (@BoincPlayItAll) has 25 followers and no tweets.

Bu the company is still staffing up as if a launch is immanent. The original web site (beyondoblivion.com) has 15 job postings for locations in Mountain View, California, Draper, Utah, New York and London. LinkedIn lists 56 total employees and five recent hires from such companies as INgrooves, VICE Media Group and hosting solutions company Verio.

Questions? Comments? Let us know: @billboardbiz

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