New Music Locker Startup Looks More Like Sucker's Bet To Transfer Cash From Investors To Music Labels

from the do-the-math dept

A few weeks ago, at the Digital Music Forum East event, right before I went on stage to interview Gary Shapiro from CEA, there was a presentation from a new music startup I'd never heard of, called Beyond Oblivion. The presentation (which is embedded below) was interesting, if incredibly vague. It looks like they're trying to create a music locker of sorts, but to avoid the various legal woes of other such music lockers by throwing a ton of cash at the labels. It's basically "don't sue us" money. Literally, the company has promised to pay $500 million to labels. It claims that it will monitor digital locker usage and any use of a song -- whether it was legally obtained or not -- will result in payment to the copyright holders. The presentation certainly created some buzz, but I couldn't figure out how the model made any sense at all. Apparently some investors are willing to give it a shot. Based on not much of anything in terms of proof that this will work, the company has raised an astounding $77 million, much of which you have to assume will just be handed over to record labels. Of course, as Hypebot notes, how much of that actually goes to artists appears to be an open question.

But really, the whole thing is head-scratching. How does the company make money? By charging device makers to pre-install its software. But why will device makers agree to pay to install this software? Yeah, that's the big question mark in the quest to the "profit" stage in the game plan. I'm sure the record labels will gladly take the cash that the investors just handed over to Beyond Oblivion, but that hardly makes this an offering that is likely to gain any traction in the marketplace.

Filed Under: business models, investment, music, music locker
Companies: beyond oblivion