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Digital Music Models Vie for Viability

Competition heats ups among players MOG, Rdio, and Spotify

Lil' Wayne | Photo: Gary Miller via FilmMagic

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Hard on the heels of streaming music service Spotify, which only recently arrived stateside, competitors MOG and Rdio announced free versions of their products last week. This kind of competition will benefit users in the short term, but in the long term, they’d do well to listen to Janis Joplin: “Honey, get it while you can.”

The problem is the steep licensing fees that record labels charge the streaming companies for their songs. That’s where subscription fees, or ads, or both, come in.

Spotify’s goal is to convert users to subscriptions, and it’s expected to place hourly listening caps on its nonpaying users to drive them in that direction.

MOG’s new freemium model mixes subs with digital audio ads, branded playlists, and a “gas tank,” which rewards users for interacting with the service or its sponsors. Rdio’s free service will also be ad-free; it’s provided few additional details about its plans.

There is a potential bright spot for the streaming services and their users on the horizon: Spotify, Rdio, and MOG have been named as partners in Facebook’s mysterious music service, the details of which are expected to be revealed this week at the platform’s f8 developer conference.