DavidHymanMOG.jpg
I had a rather interesting conversation today with David Hyman, the CEO of the MOG, a Berkeley-based music subscription service--a competitor of Seattle's Rhapsody--that provides

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MOG's David Hyman Wants to Get Inside Your Car More Than He Wants to Get the Beatles

DavidHymanMOG.jpg
I had a rather interesting conversation today with David Hyman, the CEO of the MOG, a Berkeley-based music subscription service--a competitor of Seattle's Rhapsody--that provides users with streaming access to 9 million-plus songs on their PCs, smart phones, and other mobile devices for $10 a month. Considering the Beatles' entrance to iTunes last week--the first time you could buy their music digitally--I thought I'd see how he felt about the Beatles getting closer to MOG, where they've never been available. Turns out he's more interested in getting into your car than he is getting the Beatles onto MOG. Here's a bit of what we talked about.

My questions/responses/headers have been paraphrased in some places, obviously. I've got some more thoughts on this matter coming later tonight and in the paper tomorrow.

On the Beatles getting a step closer to subscription services like MOG:

I don't think it has an affect on any of our forecasts for number of subscribers. It was never a hindrance to MOG or to anybody. It's a finite catalog, right? Anybody who's a Beatles fan, you already have it. Who doesn't have the Beatles?

Yes, but people have re-purchased the Beatles on every format, from vinyl to tapes to re-mastered CDs.

This is not re-masterd. This is probably off in a lower bit rate than what you already own. It's just not that interesting. I don't think any of us internally spend more than three minutes thinking about (getting the Beatles). We'd be happy to have them, and it'd be great to have them, but I don't think people are making their decisions on subscription services based on whether you have the Beatles or not.

If not adding holdouts like the Beatles, what's it going to take to bring subscription services like MOG and Rhapsody to the mainstream?

It's a combination of three things I'd say: 1. Quality of the product; 2. Portability is everything. The adoption of smart phones and the ability to access these services easily in the car are two of the biggest components. Unlike Netflix, which people are content consuming in their homes, music is the opposite.

On the power of Apple or Google getting into the music subscription business:

Think about how Apple educated the world on digital MP3 storage devices (iPod). It would have never happened without the hundreds of millions of dollars in marketing. And so, for (subscription services) to become that kind of size, it's going to require that kind of marketing. That doesn't mean we can't all have healthy businesses.

So, Apple or Google in this space would be good for MOG?

Yes, definitely.

Why it's all about the car:

I think the car for subscription is the Holy Grail. You've got 19.5 million people paying $12 a month for Satellite Radio. For $12 a month they're getting 150 stations. There's a process to the way this plays out. You start to see things in the after-market first. The second phase is called dealer-option. And the Holy Grail is you're just built into the car.

Satellite Radio has non-music offerings that MOG doesn't have.

My dream and goal is to be able to offer Howard Stern 300 million dollars one day to come to MOG.

When will we start seeing MOG in the car?

I think you'll start seeing MOG in the car next year.

 
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