Baboom, a new online music streaming service associated with Internet mogul and Mega founder Kim Dotcom, is seeking to raise AUS$4.5 million ($4.212 million) to fund its start up, with the aim of listing on the Australian Stock Exchange by the end of 2014.
An estimated 11.25 million shares at 40 cents a share, are being offered to professional investors, with a minimum stake of AUS$20,000 ($18,728). Melbourne stockbrokers Novus Capital, as the lead broker for the raising, are offering 11.5 percent of the company’s share capital.
Baboom, based in New Zealand with its technology development being done in Portugal, intends to compete against services including Spotify, Pandora and Rdio.
The company "works with artists to build a multi-faceted, 'next generation' online music download and streaming service comprising music streaming, artist pages (including biographies, photos and video galleries), social updates, and the option to download the artist’s content (designated by the artist)," according to the offer document.
"In addition to multiple revenue streams, Baboom differentiates itself by providing a win/win scenario for both artists and the user. Users have the option of viewing targeted advertisements generating convertible ‘credits,’ which ultimately allow the user to download free music with artists still receiving revenue," the document states.
"Supporting legal downloading and streaming, Baboom is implementing a vision to develop legitimate digital products that serve both users and creators. Content will be offered on the Baboom platform both as a free download and paid. For paid downloads, the site architecture will be similar to other music marketplaces, however the Baboom platform will encourage artists to set the fee payable for their music, and for users to only pay for selected content which will be loaded on to the Baboom service in MP3, FLAC, and WAV formats."
Baboom was soft launched by Dotcom in January and plans to launch a beta service in the third quarter of 2014, with a full launch slated for later this year.
According to New Zealand media, close to $3 million of the $4.212 million has been raised, with the closing date of the share offer extended to this Friday, July 18.
Kim Dotcom is not directly involved in the day to day management of Baboom but the company is implementing his "vision, profile and passion" and "leveraging off Kim Dotcom's pioneering brand," the prospectus said. Several Dotcom associates are on the company’s management team.
It also cautioned that potential partners of the service may be wary of Dotcom’s "Megaupload heritage."
Dotcom is still facing copyright infringement and racketeering charges, from his Megaupload business, and is battling extradition from New Zealand to the U.S.
"Owing to Kim Dotcom’s Megaupload heritage, some users and music suppliers may not favor using or engaging with Baboom, and labels may be reluctant to license material," the prospectus states.
"Baboom intends to assure labels and collecting societies they will be appropriately recompensed for all material used. Baboom will also acquire music from friendly major artists and will host original independent artists who choose to upload their own material, creating a new repository of music no matter how much major label material is available," it says.
Baboom will initially be promoted to the 8.4 million users of Dotcom's other business, cloud storage service Mega.
This article was first published by The Hollywood Reporter