Case Study: The Cricket/Muve Solution – How the music offering of a prepaid wireless service provides a blueprint to successfully reach the Latin consumer
Skander Goucha, SVP Digital, UMLE
Jeffrey Toig, SVP, Muve Music
Trendy music streaming services like Spotify, Rhapsody, and Rdio get frequent press, but they only serve a small segment of the music-loving public -- according to the founder of one upstart digital streaming service. Jeffrey Toig, the SVP of Muve, spoke yesterday at the Billboard Latin Music Conference alongside Skander Goucha, SVP Digital for UMLE.
The surprising discovery for many in the audience: By a show of hands, only a few had even heard of Muve, yet it is the largest on-demand music service in the United States, said Toig, with some 1.5 million paid subscribers.
The secret, Toig explained, is that while other streaming services target high-end users who live highly computer-centric lives, Muve targets a dramatically more populist audience. "We take a different angle," he said. "We target mass-market consumers, not just high-end ones, through mobile carriers as the distribution channel."
Muve, in fact, is offered only through mobile devices and, so far, only through the carrier Cricket in the U.S. Cricket's customers largely focus on low-cost, pre-paid plans that can be purchased without credit cards. According to Toig, nearly 60 percent of Cricket's market is Hispanic or African-American, with 80 percent of those tallying a household income of $50,000 a year or less. "Music is up there with family and friends as among the most important thing in their lives," Toig said. "The challenge is, their life isn't built around the computer, and they're usually not using a credit card as their main form of payment."
For its new business model, Muve offers its service as part of an unlimited usage bundle with Cricket. Customers pay a flat monthly fee for unlimited nationwide talk, text, web, and unlimited music through the built-in Muve platform. That platform includes streaming, single-song downloads, ringtones, and ringback tones. "We know they pay for wireless, but a lot of people struggle to pay for music," Toig said. "So the question was, how do we get them to get a great experience and feel the music part is free?"
So far, the new model seems to be working, especially in the Latin music segment, which makes up 17 percent of total music streamed on Muve. (Following behind are hip-hop, at 30 percent, and pop, at 22 percent.) In fact, Goucha said Muve is now the number-two digital partner for Universal's various labels. Soon, Muve will expand into Brazil through the carrier TIMBrazil, offering even smaller fractional music streaming options, like one day of service for the equivalent of around $0.25.
"We are trying to bring a large segment of the market into a legal music distribution relationship," said Toig. "Our belief is that there's an enormous untapped market we can reach with fresh, new thinking, innovative models, and new approaches."