Investors tune in as Psonar cloud storage switches off
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| Let the music play: Psonar will focus on pay per play after turning off cloud storage |
The Cambridge startup will concentrate instead on the Psonar Pay Per Play (PPP) service, which, depending on territory will allow users to listen to any track for one penny, one Euro cent, or one US dollar cent.
Psonar's cloud storage and streaming service formed the basis of its original launch last year and had managed to attract over 15,000 registered users who between them have stored over 2 million tracks.
One of its key selling points was the ubiquity brought to it by the cloud, being able to upload and stream from pretty much any internet connected device. However, with Amazon, Google and then Apple, all announcing cloud based music storage, this advantage has been diluted.
Psonar has now turned off the music uploading service and will be closing down the storage servers as well from 10 August 2011, providing users with a month to download any music they want to save either locally or through the Amazon, Apple or Google music channels (though not into Amazon's simple storage service).
Rigby said: "With Amazon cloud driver and player, other people started doing what we had pioneered." These other people are of course Apple with its iCloud and Google with its Music Beta, a formidable set of competitors for any company to take on, let alone an independent startup.
Rigby, however, says the move couldn't be more positive. PPP offers an instant revenue stream and while advertising was trickling in for its cloud storage, it's a much tougher service to monetise.
"This is wholly positive, there's nothing negative about it at all. We've found a sweet spot."
Psonar is in the middle of a £300k fundraising round of which it has raised £190k so far, and rather than scaring off investors, shutting down the cloud storage and focusing on PPP has attracted them says Rigby.
"It has been easier to raise money," says Rigby. "It's a much more compelling story, no one else is doing this."
Not exactly like this they aren't. Rigby says the company's service is complementary to groups like Spotify and that competitors are more like Mixcloud, which he rates highly.
He cites a Forrester report by Mike Mulligan, which says the newest generation of listeners aren't concerned with ownership of units because they have no real experience of trying to obtain 'units' of music in CDs or even through bit torrents, which essentially replicates this, all they know is digital and all they care about is easy access and sharing.
"It's about social use of music, we are competing for people's time with other music social services like Mixcloud and Last.fm to a lesser extent.
So with everything so positive surrounding the new strategic focus, would the decision to cut the cloud storage service been taken anyway, irrelevant of Amazon, Google and Apple?
"I think we should have taken that decision even if they had not done it," says Rigby. "But that fact that someone was going to do it was inevitable. Amazon was first out of the stalls, but never really gained market share because iTunes integrates with iPhone and iPad. Now with its cloud driver and player it can integrate totally."
Psonar has a pay-per-play iPhone app awaiting approval this month and is lining up Android and Blackberry app releases later this year. It wants to add further features eventually, such as caching so you can listen to songs when not connected to the internet.
The PPP service is yet to launch, though it has had a six week internal run and is due to enter public beta by the beginning of August. Rigby says feedback has been very good, not just from users, but the music industry too.
He says Psonar has a number of artists lined up to use it as a launchpad for new releases. "Artists and labels love it because users can try the music - and still pay - before they buy it."
Psonar says it will also offer registered Psonar cloud users 100 complimentary plays on the Psonar Pay Per Play platform once the public beta goes live.
