satellite radio, but it was available on mobile devices by monthly subscription. It did very well, and we are on all the major carriers, white-labeled as AT&T Radio, US Cellular Radio, and so forth. We also have a music video service that we launched about six months after the radio service, and we have a video-on-demand movie service that’s pay-per-view or as a monthly club. We’re on 10 different carriers in the U.S. and Canada and have around six million users on those services.
X: So you’ve never really had a directly consumer-facing brand?
DT: We initially started out more like a service provider, working with carriers and doing everything “on deck,” using the carriers’ marketing. But in the last 18 to 24 months we’ve been trying to grow our business so we can not only have a service provider model but also have a direct consumer component. Last December we extended our streaming movie service across 50 different smartphones in the U.S., including Android, iPhone, and WebOS, and three or four weeks ago we launched our cloud music service, which has been in private beta until now.
X: Why should music live in the cloud?
DT: Today and going forward, we think that users are going to carry multiple devices that can all play multimedia. I, for example, have an iPhone, and I bought an iPad, and I have my work laptop and my home PC, and synching media across all of those devices is going to require more and more work. We feel that cloud services are going to play an increasingly important role in this world of multiple devices. And we feel we are in a better position to address mobile devices because of our history. It’s very difficult to develop a seamless experience on the mobile platform. You have the problem of latency, with holes and lost coverage in 2.5G, 3G, and even 4G [data networks]. We add a lot of value in terms of masking all of the complexity in network coverage.
For example, the Android version of our cloud music service actually detects your network condition. It can sense whether coverage is spotty, and do the proper things [such as buffering] given the state you are in. It all works in the background, so users don’t have to know there is an issue.
X: Where do you see mSpot’s service in relation to other cloud music services such as Pandora, Napster, and Rhapsody?
DT: That term is used way too broadly. Folks sometimes lump in Pandora, which is streaming personalized radio, as a cloud service, but that is not my definition of a cloud service. You can’t tell what is going to be played next, and there is no true interactivity, in terms of being able to go backward. So there are real limitations in terms of how you can enjoy the music. On the other end of the spectrum are services like Napster and Rhapsody, which are subscription based, and let you pick any song you want, create you own playlist, skip or go forward, whatever. The downside to those services is that it requires $5 to $10 per month to enjoy.
We kind of sit in the middle. MSpot is a cloud service like Napster; it is absolutely interactive. You can do whatever you want with your songs. The difference is that you are playing songs that are your own, versus songs that you may own. We argue that you shouldn’t have to pay anything extra to
