[freejack]

I think this is less a story about a failed News Corp. ambition and more a story about how the music and telephone industries have developed first rate competencies at stifling innovation.

Hearing stuff like this makes me really sad for the future of the Internet if everything new & exciting will need a gatekeeper or two to sign off on it.

I don't know how viable the business model was, or why they needed $87m to prove it wasn't viable, but I can't help but think that we would have had services like this 10 years ago (okay, 5 maybe) if media and networks weren't so tightly controlled.

Thank god for the Open Internet 'cuz the closed one doesn't seem to be doing much...

[trotsky]

Stifling innovation? There are have been music subscription services that provide all you can eat access to major label content for years. Most of them have struggled, at least two shut down and napster (v2) was acquired by Rhapsody in a fire sale.

In fact, you can get this service on your phone right now from Rhapsody for $10/mo. Assuming a two year phone life, this roughly translates into taking a $240 service and charging $60 for it (75% less).

Lets look at what that breaks down to in a simplistic model where half the fees go to the content pool and the four majors split equally.

Rhapsody: $120 / 2 (years) / 4 (majors) = $15/year

Oblivion: $30 / 2 (years) / 4 (majors) = $3.75/year

Compare that to something like $7 per title sold and you find that it'd only be clearly beneficial to a label in the case where that user would have otherwise purchased none of your music at all during that period.

[rhizome]

Just think how far that $90MM would go at other companies in the same space.

[freejack]

heh - yeah, that's like 10-20 startups worth of cap! ;)

[sc00ter]

Or 1.5 Color's worth.

[rhizome]

So in an age where C-level executives have to be paid some higher amount in order to attract "the best talent", BO and Color and their $150MM wasted dollars would seem to provide an object lesson to the contrary.