Launch of the Electric Jukebox Begins the Test of An Alternative Music Subscription Model

Billboard

A new 'easy to use' streaming service, backed by Sheryl Crow and Robbie Williams and with the support of all three major labels, has launched in the U.K. that is aiming for the mass audience of casual music fans that haven't taken to platforms like Spotify, Deezer and Apple Music.
 
Entitled The Electric Jukebox, is nothing more than a dongle that plugs directly into a television's HDMI port and once connected to Wi-Fi enables the user, via a microphone shaped 'point-and-click' wireless controller, to access an on demand catalog of over 29 million songs, free from advertising. All three major labels have signed licensing deals with the service, which was originally announced last year, as have independents Merlin, PIAS, Believe Digital and InGrooves.
 
Magic Works, the London-based company behind Electric Jukebox, says deals have also been signed with all major pan-European publishing licensors, including Universal Music Publishing Group, Sony/ATV, Warner/Chappell Music, PRS For Music and SACEM, and that it plans to rollout out the service into international markets in 2017.   
 
"I'm trying to make music streaming as simple as buying a toaster," Magic Works CEO Rob Lewis tells Billboard.

The first models -- available in three colors, red, blue and charcoal, each with a built in microphone to enable voice search -- go on sale in the U.K. tomorrow (November 09) and cost £169.00 ($209) for the device and a year of access to the company's catalog of music. After that year, owners will need to pay £52.00 ($64) for a yearly 'premium pass,' which enables on-demand access to the full catalog. Users who choose not to renew their subscription after 12 months will still be able to use the service, but will only be able to access editorially curated and celebrity playlists, supported by advertising.
 
Sheryl Crow, Robbie Williams and British TV personalities Stephen Fry and Alesha Dixon are among the 'celebrity curators' signed up at launch, all of whom are shareholders in the business. Sheryl Crow has even filmed a cheery, demonstrative trailer of how the Electric Jukebox works for its website.    
 
Prior to launching Electric Jukebox, Lewis was founder and CEO of Omnifone, a digital music company that partnered with Swedish telecoms provider Telenor in 2007 to launch one of the first mobile music subscription streaming services.
 
Lewis exited Omnifone -- which filed for bankruptcy earlier this year and quietly bled some talent to Apple -- several years ago, and is keen to point out that Electric Jukebox is an entirely different proposition to mobile-based streaming services such as Spotify, Apple Music, TIDAL, Deezer and Amazon. Whereas they largely target young, music and tech savvy millennials, Electric Jukebox is after what Lewis calls the casual and older music fans, who have yet to sign up to a monthly subscription service and, he says, are never likely to.
 
"The reality is that after 11 years of pushing consumers really quite aggressively towards these services, whilst also seeing the number of places selling CDs diminishing quite extraordinarily quickly, there are still a very small number of people in the world who have taken up this idea of music subscription," says Lewis, contrasting the rate of streaming adoption with that from cassette to CD.
  
"The whole world moved from cassette to CD very quickly because you bought a CD player, you pressed play and off you went. It was so easy to adopt. I think [a fault of] myself and everyone else who was involved in the early days of streaming is that we failed to make it as fun, easy and simple as the old format changes," he says. 
 
To that end, Lewis hopes that Electric Jukebox will attract a mass market audience of casual music fans "who like to listen to music at home with the family and at social gatherings, but doesn't have an affordable, fun and easy way to join this revolution."
 
That's despite it actually costing $50 more than a regular streaming subscription, which is usually not tethered to a TV set or the home, over a 12-month period (£169.00 compared to £119.00). If consumers continue subscribing to the service for a number of years, the price does incrementally fall below that of its competitors, but that's a stout 'if.'
 
"We're not targeting Spotify or Apple Music or Deezer consumers," defends Lewis, citing independent research conducted by YouGov for Electric Jukebox that says only 8 percent of U.K. consumers currently subscribe to music streaming services. "We're after the 92 percent of people who have been left out of streaming. Who play old CDs or listen to the radio and haven't yet found a path to this wonderful idea of having access to all the music in the world." 
 
"We know that we're taking on some of the goliaths - the Apples, the Amazons, etc. - and we have to be nimble and entrepreneurial in order to be able to achieve our goals," he adds, citing a sustainable business model that, like the iPod and iPhone, draws revenue from the sale of hardware as well as subscriptions. That, says Lewis, has generated strong support from across the industry.   

"What we have shown the music industry is that we can monetize a massive market of consumers who have failed to adopt to a new format. By bringing them into a world of streaming, we hope to make the music industry bigger."