Image via CrunchBase
Headphone maker Beats Electronics is purchasing music subscription service MOG, according to multiple sources familiar with the deal. But the deal hasn’t closed yet.
Peter Kafka at All Things D is reporting that HTC-owned Beats is close to buying fledgling music subscription service MOG. That's all well and good but the rationale he highlights is a bit faulty. MOG has three assets really:
1. The application & its installed base
2. Label deals
3. The ad network
Clearly there's no interest (or very little interest) in the ad network. Although I supppose you could pimp Beats headphones pretty hard across MOG's network. So really you're left with the app and the deals. There is no way the deals are transferable, so all of those battles will have to be fought again. Beats certaintly has the folks to fight those battles (see: Jimmy Iovine), and they could do that on their own. And in reality these subscription deals probably all look very much the same given the price points we're seeing in market. So really... what's left is the app, the installed base and the app's distribution footprint on smart TVs and such, which is (updated) actually quite good including Boxee, LG, Roku and lots of other connected home devices.... but not for me the core PC experience isn't great and losing IMHO to Rdio and Spotify in usability. Different strokes for different folks and all that.
HTC & Beats get an interesting asset. They're probably not able to realize the full value of what MOG built over the years, but it gives them a headstart and a leg up. HTC could use Beats/MOG as a very interesting wedge.
Best of luck, MOG.. Now Beat it!
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