Bundled music newbie Boinc aims for year-end launch
Remains to be seen if Beyond Oblivion actually is
The disaster that was Nokia's Comes With Music hasn't deterred entrepreneurs from having another go at bundling music access with hardware. Beyond Oblivion has raised a huge amount of cash to do much the same thing – and told the FT it will launch by the year end. The service will be called Boinc, continuing the tradition of misspelled names. (cf: Rdio).
Earlier this year Beyond Oblivion told us it expects the cost to be around $50 to $70 per device.
Like Comes With Music, the licence grants access to a large music library for the "lifetime" of a device. And like the doomed Nokia service, it relies on DRM. But unlike Comes With Music, Beyond Oblivion will bundle the offering with any kind of participating device, as long as someone in the retail chain is willing to sign up, and also offer it as a standalone subscription service via an iOS Android or Windows Phone app, or a client for Mac or Windows. It is also happy to leave branding to retailers or device manufacturers.
The FT has some interesting figures. As is the customary practice, large record labels have demanded (and received) large up-front payments: 40 per cent, apparently. The labels have also secured a minimum 70 per cent of total annual revenue in royalties. Boinc has secured a royalty ceiling of 92 per cent. That doesn't leave a lot to market and operate the service. Or, more importantly, much of an incentive for other investors to think, "What a brilliant idea, maybe we could do this even better."
BO says most of the $77m it received from Rupert Murdoch's News Corporation went straight to the major record labels. This money-go-round is not new. In recent times labels have asked for over 100 per cent of a startup's equity.
We're still waiting for the "private beta" phase, expected in June but now slated for October. The company says it is on course for a end-of-2011 launch. ®
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