Betabeat was sceptical when we first heard about Beyond Oblivian, a New York based music startup that got $87 million in backing from big names like Allen & Co., Sony and News. Corp. The startup aimed to take on Spotify by offering an unlimited music streaming service with no monthly fee. Instead the service came baked into smartphones, adding around $60 to the cost of each device,
Seems like our doubts were well founded. The Financial Times is reporting that has shut down before it even launched. It’s another costly and very public black eye for Rupert Murdoch’s digital explorations, which so far have included Myspace and iPad-only newspaper The Daily.
The service apparently struggled to convince the four major labels that consumers would buy into its pricing plan. It wasn’t clear how a user who paid $60 extra for a device would react when it came time to buy a new phone. Would the service transfer over, or would they be charged a flat fee a second time?
Beyond Oblivian executive Adam Kidron told The FT “Beyond was always a tremendously grand ambition as the advances required by the record labels and music publishers were substantial, reflecting the breadth of the rights required to create a true digital music one-stop.”
Anyone who has followed the history of Spotify should have seen that coming. The record labels love to pile on the onerous demands and fees, trying to squeeze as much revenue as possible from assets that no longer sell well in physical form. In fact, Nokia had tried to do something just like Beyond Oblivian, a service called Comes With Music, but was forced to scrap the project after it also failed to take off.
Obviously we would love to read this as another case of corporate hubris gone horribly wrong. Startups, we prefer to think, work best when the idea and the technology are innovative, not dreamed up by bankers, media titans and record execs. But it might also just be an abject lesson in how difficult a space the streaming music market is. Spotify, Pandora, Rhapsody, all are mature companies, some public, none of which have yet turned a profit.
If anyone who worked with Beyond Oblivion is reading this, give us your thoughts on what went wrong in the comments.