Hearing stuff like this makes me really sad for the future of the Internet if everything new & exciting will need a gatekeeper or two to sign off on it.
I don't know how viable the business model was, or why they needed $87m to prove it wasn't viable, but I can't help but think that we would have had services like this 10 years ago (okay, 5 maybe) if media and networks weren't so tightly controlled.
Thank god for the Open Internet 'cuz the closed one doesn't seem to be doing much...
In fact, you can get this service on your phone right now from Rhapsody for $10/mo. Assuming a two year phone life, this roughly translates into taking a $240 service and charging $60 for it (75% less).
Lets look at what that breaks down to in a simplistic model where half the fees go to the content pool and the four majors split equally.
Rhapsody: $120 / 2 (years) / 4 (majors) = $15/year
Oblivion: $30 / 2 (years) / 4 (majors) = $3.75/year
Compare that to something like $7 per title sold and you find that it'd only be clearly beneficial to a label in the case where that user would have otherwise purchased none of your music at all during that period.
Thinking out loud...
Has any publisher managed to control their content in the digital age?
Academic publishers still manage to keep their content under control. How?
The cost of a subscription is exorbitant. Only large entities can afford it.
The large entities, e.g. universities or large firms, pass on the cost to their customers, e.g. students or clients/customers.
There's also the small fact that the content is not marketed heavily and in high demand among the general population. Unlike music.
Perhaps music should only be marketed to customers who can afford it: large entities.
It wouldn't stop piracy by individuals but it would ensure the existence of some customers who were willing and able to pay, and to refrain from piracy.
Imagine a situation where working for a large firm or attending a university gives you a temporary subscription to a vast catalog of not only academic journals but also major label music. It would be a huge perk.
Yes there would be piracy, but the large firms would have an incentive to try to stop it. They know who their employees and students are and could no doubt do a better job preventing piracy than the RIAA lawyers have done. Whatever might happen, the labels would still make money from exorbitantly-priced subscriptions.
Nah, it would never work.
"Beyond was always a tremendously grand ambition as the advances required by the record labels and music publishers were substantial"
.. because there were no tech advances required; the only 'grand ambition' was getting the record labels to listen to reason - which they apparently didn't
They had to change/convince multiple businesses to conform to this new business model, and that's why it was such a grand task -- each one had its own, different risks, and it was up to Beyond Oblivion to convince them the model would work (which it would). The labels themselves were just a small piece of that very large puzzle.
Michael Robertson (mp3.com guy) recently posted a great article (although I can't find it) about the challenges of an online streaming service which summarizes the above a lot better than I said it, plus goes into further detail.
EDIT: Found it. http://gigaom.com/2011/12/11/why-spotify-can-never-be-profit...
If the real challenge was getting everyone to agree why did it cost so much?
This company was certainly building something that people might want, but failed to see if the roadblocks that had stopped similar efforts before them had been removed. They should have been able to find out how much work, money in the form of advances, and relationships they needed to even come close to pulling this off far before they ever raised so much money. The fact that they took $87M and anyone gave it to them without this analysis is just sad.
On the same note, I know a guy looking for a new gig. Anyone hiring? :)
There's a bit more on the story here: http://musically.com/2011/12/31/beyond-oblivion-shuts-down-b...