Critics say Spotify will never turn a profit because of the amount it must spend on music licensing. One horrifying estimate we heard pegged its losses at about $8 for every free user — and it has over seven million of those.
Such tales were not enough to keep a new entrant out of the music subscription market — rara.com, which plans to launch in 16 countries today (USA, UK, Ireland, France, Germany, Italy, Spain, Austria, Belgium, Denmark, Finland, Luxembourg, The Netherlands, Norway, Sweden, and Switzerland) with seven more to follow, including Canada and Mexico.
Rara promises to charge $1 per month on the web or $2 on smartphones for the first three months of ad-free access over 10 million tracks including music from all four major labels and “leading independents.”
After that, rates increase to the industry standards of $5 per month for unlimited listening on a computer or $10 per month on mobiles: “Android, iOS, and other platforms,” although so far, only Android works.
Rara is powered by Omnifone, a white-label music service that provides the back-end for several other music services, including Blackberry Messenger Music and Sony Music Unlimited, whose president Tim Schaaff said Omnifone “provides a tremendous amount of support and development and infrastructure that supports the Music Unlimited service.” So far, so good.
But unlike Spotify, MOG, and Rdio, rara charges users’ credit cards right out of the gate — and no free trial means no chance to get addicted by making playlists. In addition, the current subscription services are apparently still struggling mightily with “the secret demands of record labels.”
Despite those alleged demands, music subscriptions are blossoming (at least relative to disastrous years past) due to invisible DRM (due to music players’ internet connections), integration with Facebook, and more permissive “freemium” versions. But they still face steep challenges.
We have been unable to test it so far on today, the service’s launch day, because every credit and debit card we entered generated an error message. But according to its FAQ, offers all the same playlisting, Facebook sharing, and other features offered by the competition.
(Update: We were later able to enter a credit card and create an account, which did not alter our opinion of the service’s challenges significantly, although it does have some nice animations, the ability to swap screen backgrounds, and some radio and automatic playlist options alongside the usual search and playlist functions available elsewhere. Oh, and “Favoriting” tracks doesn’t appear to work yet.)
So what makes rara think it stands a snowball’s chance in hell?
Apparently, its confidence stems from a study funded by the company, with a sample set of under 1,000 adults, finding that “ at least 70 percent of consumers have not bought a digital music track in the past six months, and that 60 percent have never experienced any form of digital music.”
Wait… does the fact that most people don’t listen to digital music mean that rara can build a business selling it alongside services like Spotify that don’t require a credit card up-front? We doubt it — even if rara really is easier to use, as it claims.
Contrary to our doubts about this service, major label executives like its chances:
Rob Wells, President of Global Digital Business for Universal Music Group: ”Rara.com has delivered a music service that taps into an entirely new type of music consumer. Instead of competing with existing digital music services, it’s designed for the mass market of consumers who have yet to do digital music at all.”
Michael Paull, Executive Vice President, Global Digital Business, Sony Music Entertainment: ”We are pleased to be partnering with rara.com on the launch of their new music service. Growing the audience for digital music around the world requires services that resonate with the mass market. rara.com has been designed with broad consumer appeal in mind with a simple interface that provides a great music experience and accessibility across a range of devices.”
Mark Piibe, Executive Vice President, Global Business Development at EMI Music: ”Rara.com is a great new way for a whole new audience of fans to find, listen to and share music online, building deeper connections with the artists they love and discovering a world of new music as well.”
Stephen Bryan, Executive Vice President of Digital Strategy and Business Development, Warner Music Group: ”The intuitive and thoughtfully designed interface combined with the curated channels makes rara.com a service that will be accessible and appealing to a wide audience and, potentially, an entry point for many people just starting the transition to digital music.”
Are they seeing something we’re not? Possibly. But the fact that we had a hard time testing the service on its launch day doesn’t bode well, nor does that upfront credit card requirement.
That said, we’ll be happy to be proven wrong this time because rara is right about one thing: Most people are missing out on the freedom that comes with unlimited ad-free access to all the music in the world.