April 26, 2011 at 2:54 pm

MOG To Launch Freemium Music Service

As rumors continue to swirl regarding the imminent launch of cloud-based music services from Spotify, Apple, and Google, one such service that’s already up and running in this country – MOG – announced that plans to revamp its on-demand music subscription as a freemium music service somewhat along the line of Spotify within the next couple of months.

Speaking at the Rethink Music conference on Tuesday, MOG CEO David Hyman, pictured here, said his company has been watching the Spotify situation in Europe closely — and that while MOG cannot afford to offer in America something identical to what Spotify offers in Europe (ten or more free hours of listening per month), his company plans to launch a free version of its on-demand music service here within the next two months.

Today, listeners must enter a credit card in order to use MOG’s 14-day free trial, which likely dissuades many users who might be more willing to try something like Spotify that lets you start listening right away — no credit card required — in perpetuity, for free, so long as you stay under the monthly limit.

Hyman said the new version of MOG will include a similar “freemium” option allowing users to get a free, relatively-unencumbered sample of what the service offers — but that it will stop short of the ten-hours-and-up-for-free Spotify model in order to generate a higher return-on-investment (ROI). Generally speaking, that’s business-ese for “Spotify would cost too much money to license in the States so we’re not going to clone it.”

Amazon’s music locker took an alternate route, by acting as a cloud-based music hard drive where people can store their music after buying it from Amazon MP3 or obtaining it in some other way. As for the rumored big three U.S. cloud music subscriptions, Apple is said to be farther along than Google, Google is said to be pursuing talks with Spotify, and Spotify is saying it’s not talking to Google after all.

So, how would a freemium version of MOG work sort of like Spotify but with a larger “return on investment?” One option would be video advertising. By including more ads — especially the video advertisements which bring in more money than the audio and display ads on Spotify — MOG might be able to defray the costs of its free version.

The timing of all of this could be crucial, however. Apple and Google each already have large ad networks, and Google’s in particular is absolutely massive, including web search and YouTube – arguably the only successful ad-funded on-demand music service in the U.S. to date.