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Carphone Warehouse and Catch Media Launch Music Access Service August 3, 2010

Posted by Bill Rosenblatt in Business models, Fingerprinting, Music, Services.
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The UK’s Carphone Warehouse has launched a service called Music Anywhere, powered by the LA-based startup Catch Media.  Music Anywhere is a service that combines two primary features: the ability to sync your music files through the Internet to all of your connected devices, and the ability to stream your music from any web browser.  The service is available through Carphone Warehouse for a subscription price of £29.95 (US $48) per year, or if you buy a certain Samsung handset model, it’s built into the handset price.

For you online music historians out there, Catch Media is best explained as a cloud sync service (DoubleTwist) crossed with an online music locker (MP3Tunes.com).  Except that instead of requiring you to upload your tracks to a server for Internet streaming, Catch Media detects your music via acoustic fingerprinting and maintains a rights locker for your user account that keeps track of the music you’re allowed to stream.  It has a library of several million tracks, but if your music isn’t in the library, it will upload the track and store it for you.

The biggest difference between Music Anywhere and the aforementioned services, however, is that it has licenses from the record companies — who get paid royalties.  Hence the subscription fee.  Royalties are paid per play based on play counts from the player app that runs on PCs and portables and from Catch Media’s streaming servers.

But, as the more astute of you may have noticed, Music Anywhere doesn’t actually provide any music that you don’t already own.  For that, you need a service like Spotify — which does essentially the same set of things that Music Anywhere does, for about four times the price.  Music Anywhere will work with tracks in any of the major unencrypted formats.  No DRM is involved, but the player app, which reports play count information to Catch Media’s servers, has to be relatively hack-proof to work properly.

For the record companies, the value proposition of Music Anywhere is very simple: it’s a way to capture value from pirated tracks.  Let’s face it: what we’re really talking about here is users who have music from “borrowed” CDs, file-sharing networks, and all the other usual places, plus maybe a few tracks from iTunes and their own CD collections.  In other words, the contents of a typical iPod.

Music Anywhere’s marketing materials include some lip-service to terminating user accounts “in extreme cases where it becomes apparent that most of a person’s music collection has been [in] fact pirated.”  That’s a nice-sounding statement, but when you dig below the surface, it becomes absurd.  Hardcore pirates won’t want to pay £30 per year for anything having to do with music.  On the other hand, record companies would love to get paid for use of pirated tracks — the more the merrier.  When looked at that way, Music Anywhere’s success seems to be predicated on a lot of nudge-nudging and wink-winking.

Music Anywhere hopes to find a viable niche between free music and more expensive subscription services like Spotify and Rhapsody by parsing out a price for access to music by itself.  Many digital media pundits have said that people should be willing to pay for just that, even if they aren’t willing to pay for music itself.  Now we’ll see whether they’re right.

P.S. Carphone Warehouse is owned by the major US-based electronics retailer Best Buy, which intends to launch the Music Anywhere service next year — presumably in the States.  A combination of Catch Media and Napster — also owned by Best Buy — could be quite interesting.

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