Boinc in the Clouds – Spotify gets a new rival.

On October 25, 2011

Last week, I discussed how the record and tech industries were venturing into the world of cloud computing for digital music distribution. In recent weeks we have seen the arrival of Apple’s iCloud and the leaked Google Music Locker, and we have been aware of Amazon’s Cloud Drive for a while. We have also discussed the recent integration of popular social networking site Facebook with Spotify. 

This week’s report from the cloud comes from Charlotte Otter with the impending arrival of new cloud and and online streaming service Boinc. In her article, she looks at a service with some very bold claims in how it will work. 

According to Otter, and later backed up by Boinc’s promotional video, the company is willing to pay out 70% of its revenue to artists, as well as royalties for each play. A huge promise to make when Spotify are synonymous with struggling to implement a reasonable payout structure to artists. Even more interestingly, Boinc are willing to pay royalties for any media played after being converted/imported into their platform. They don’t care where the material originally came from; its playback on their service will lead to a royalty being given. They also state they will not ask for subscription fees, there will be no adverts and users can listen as much as they like. It sounds similar to iTunes Match, but nobody is quite sure how Apple will broach the subject of illegally sourced material on their service and whether it’s a honeypot trap.

What the revenue stream is to make this possible is difficult to guess at this point, but they have already received significant investment. According to Otter, “News Corp invested $9.2m (£5.6m) for a 23% stake in Boinc in April 2010 and a further $2m in March, as part of a $77m funding round led by the charity foundation, the Wellcome Trust.”

But what must be astonishing/worrying to the likes of Amazon and Google, who are yet to secure licenses from several of the major labels, is that this new and untested service has already secured licences with Sony and Warner – the two labels the two rivals are yet to secure. Google has currently secured a licence with EMI and are in ongoing talks with Universal but not the others. Amazon simply haven’t bothered at all. Spotify have their licences, but have been known for disputes and are regularly falling out of favour with musicians and songwriters over payments. So how have Boinc achieved this on a service that isn’t planning to launch until 2012 and has no prior history in mass online distribution? They do have a powerful investor in News Corp, although this may also be thought of as a potential stain on their early reputation (due to the recent scandals in the UK and abroad). Is this another episode of a multinational media company willing to invest in music streaming services to exploit a potential revenue, or possibly just another data mining exercise using music as bait? 

It will be an interesting few weeks and months as more information about these services becomes available. I’m sure the marketing of Boinc will begin to go into overdrive as the its launch draws nearer – they are already using “Boinc’ing” as a verb and further innuendo is bound to follow. Even as a platform under development, the promises being made are sure to worry its rivals and the buzz it will create should secure a strong market penetration. No pun intended… 

Leave a Reply

Your email address will not be published. Required fields are marked *

%d bloggers like this: