The digital music company Spotify, which uses free song streams to lure people to paid subscriptions, has earned the music industry’s approval by making money from listeners who might otherwise use their computers to download songs illegally.
In its shadow, another service, Muve Music, has quietly built one of the largest subscriber bases in the business by going after a part of the market that most digital companies have largely ignored: people who may not have computers at all.
Muve, a phone-based music plan sold through Cricket Wireless, offers unlimited song downloads for $10 a month, tucked inconspicuously into
a customer’s monthly cellphone bill, which ranges from $55 to $65. In many ways its users defy the conventional profile of a digital music consumer.
They are young and urban, yes, but instead of a laptop or a tablet, they use a phone for everything. Most earn less than $35,000 a year and lack credit cards, so they prefer Cricket’s month-to-month cash plan.
Since its introduction in January 2011, Muve has signed up 600,000 users, putting it in the league of Rhapsody, which has about one million subscribers, and Spotify. And Muve is poised for another growth spurt with a new line of phones that the company believes could bring in millions of new users.
“Cricket’s customer is young, is ethnic, and tends to be middle and lower income,” said Jeff Toig, senior vice-president, Muve Music. “This is not a segment of the market that the major technology companies innovate for.”
Major companies see Muve as a way to develop loyal customers in an area that had been an industry blind spot. Each month, Cricket says, Muve users download more than 70 million songs and spend more than 30 hours listening. By comparison, Pandora users listen for an average of about 20 hours each month.
Among Muve’s advantages are that its primary customers — young, urban minorities — are some of the heaviest users of the Internet on cellphones.
Some analysts, however, doubt Muve’s long-term potential. The service signed up 500,000 users in its first year, but halfway into its second it has gained only an additional 100,000. Cricket itself — a tiny competitor to giants like Verizon and AT&T, which each have around 100 million customers — lost 289,000 subscribers in its second quarter, the company reported recently. The company is hoping Muve and its new Android plans will help turn that around. NYT