MusicMatch Unveils New Subscription Radio Service

MusicMatch unveiled its subscription-based music service, which lets users create a personalized Internet radio experience. Its MusicMatch Radio MX service is built into the company's Jukebox software.

The music service can be used with its free or gold versions. Users can opt to stick with the free software and use the free music service, which includes advertising (banner and audio ads) as well as lower quality streams (40Kbps). The subscription service allows users to input up to 25 favorite artists, access "era" radio stations, a tempo slider (for setting moods) and CD quality streaming (128Kbps). The pay service is also completely advertising free.

According to Dennis Mudd, CEO of MusicMatch, the subscription service has been a success "beyond our wildest expectations." He said that 12 percent of its users have subscribed to the radio service since the private beta began last Friday.

The new Internet radio service is similar to Launch.com's radio, LAUNCHcast. Like MusicMatch's offering, Launch users can choose favorite artists, get recommendations from other "DJs" and set listening moods. Mudd admits that Launch's radio service is the closest competitor but cites some important differences. "You don't have the concept of gradual honing of tracks around their personalization technology," he said. MusicMatch's recommendation engine was created through other users.

"We found that a community of users gives us more accurate and interesting recommendations," said Mudd. Other companies like MuBu.com and MoodLogic have their own recommendation engines, but Mudd says those are based on "a handful of experts" that find relationships between moods, individual tracks or artists. He said MusicMatch has even talked to some of these companies in the past, but has stayed independent. "We've been working the last nine months building the personalization technology and delivery infrastructure," he said. The company said it has logged over one billion plays uploaded by its user community.

The other important difference between Launch and MusicMatch's radio offering is that Launch is completely free, with up to CD-quality. Mudd said he couldn't comment on Launch's ad-supported business model, saying only: "It's difficult to rely on just advertising these days."

Another differentiator between Launch and MusicMatch, is that Launch can be accessed from any browser and doesn't need a software download. Requiring software can make it inconvenient for users who wish to access their radio service from both their home and office computers. Mudd said, however, that MusicMatch is thinking of adding "thin client" support. "We actually found that you need a little more thick client to get buffering capabilities," he said adding that the software also helps with moving quickly through songs. "If we did offer thin client," he said, "it would be less compelling."

Considering that MusicMatch has traditionally counted on revenue from software sales, the new subscription service is something new for the company. Still, Mudd is bullish. "The subscription fees will eventually ramp up," he predicted, "and be a larger revenue stream than software sales."

MusicMatch is using the compulsory DMCA license but said it is currently negotiating with the labels to offer a true on demand service where users can select individual tracks, not just artists. Mudd sees this as the future of Internet radio, where every track in the world is available. "We believe it will evolve from personalized radio, but it will be a while before [all the music] is licensed," he said. "You'll be able to grab it and own it." Mudd explains that this would mean moving into sales of sales, whether through a subscription or download model.

MusicMatch was also crowing about recently released Media Metrix numbers, showing that MusicMatch usage surpassed RealJukebox for the first time in March 2001. "We were quite ecstatic when we saw latest results," said Mudd. He said he attributes this fast growing audience on viral marketing. "We focus on what customers want and delight our customers," he said." Still, MusicMatch has deals with OEM providers like Dell Computer, which bundles the jukebox player onto new PCs. Mudd said that approximately a third of their users come from such bundling deals.

MusicMatch Radio MX is available through both MusicMatch Jukebox Plus and Basic for $4.95 per month. The plus software costs $19.99 and allows for faster CD-burning and other advanced jukebox features.