* MOG now has 500,000 active users - CEO
* 5,000 new users from Facebook trying MOG everyday - CEO
* MOG has had sales talks in the past, not yet profitable -
By Yinka Adegoke
Feb 28 Digital music start-up MOG isn't
actively trying to sell itself, its chief executive said on
Tuesday, responding to a report that said his company is
struggling in the competitive music subscription business.
MOG now has more than 500,000 active users, according to CEO
David Hyman, but he did not break out how many are fully paid-up
subscribers. Since integrating the music service into Facebook
last fall, nearly 5,000 new users a day have tried out the site
CNET earlier on Tuesday reported that MOG was struggling and
is up for sale.
Hyman disputed the idea the company is struggling. But said
that as a venture-backed company, MOG has had conversations in
the past with potential buyers but he declined to clarify if
those conversations had taken place recently.
"We're not actively trying to sell this business, said
Hyman. "The Facebook integration has been fantastic for us but
as we're not yet profitable we're always engaged in
conversations with our shareholders about all possible options."
MOG was founded in 2005 by Hyman, and has raised $33 million
from its two main backers Menlo Ventures and Balderton Capital.
The business is only 50 percent online subscriptions, the
other half of the business is its advertising network call MOG
Music Network, which places advertisements on more than 1,700
music sites. According to comScore data, the MOG network
receives more than 60 million unique visitors a month.
Hyman said the company is currently hiring across its team
for engineers, marketing and sales staff and has not laid off
any staffers since 2009, which was due to the financial crisis.
MOG is in a very competitive market alongside better known
names Rhapsody and Spotify. These companies are trying to
convince music lovers to change habits of a lifetime and
subscribe for unlimited access to on-demand songs and albums
streamed over the Web to a user's PC or mobile phone, rather
than buying downloads or physical CDs.
Typically these subscription services charge around $10 a
month for access to millions of songs on both a user's PC and
Rhapsody, which has been around for more than a decade has
just over 1 million U.S. paying subscribers after it bought out
Napster. Spotify, which has been very successful at raising its
profile since it launched in the U.S. last summer, had garnered
some 250,000 paying U.S. subscribers as of October, sources told
The relatively slow take-up of paid subscriptions has been
disappointing for music labels who have struggled since the
advent of digital music.
The labels had been hoping the services would be more
successful at simultaneously beating back piracy and shrinking
the dominance of Apple Inc's iTunes Music Store. ITunes
accounts for some 70 percent music sales in the U.S.