I spoke with Mercora founder Srivats Simpath about three years ago as the company was looking for possible partnership opportunities with Microsoft. At the time, the company's vision and proposed business model seemed a little muddy. Music was involved. There would be some sort of peer-to-peer sharing system, but somehow this would be legal. To differentiate itself from the popular but illegal file-sharing systems used by most of the world at that time, Mercora would have a strong social-networking aspect, with users recommending or voting on songs. I don't remember exactly how the company expected to make money, but I recall telling them that charging subscription fees to end-users is a hard way to go.
If you can't explain your online music service in a sentence, it's too complicated.
Yesterday, the company--which changed its name to Social.fm last year--announced it's out of business. Without knowing exactly what went down, I'll just say that Mercora's was one of many confusing pitches that I've heard over the years. (I sympathize with Rafe Needleman's frustration.)
So, in hopes of turning a negative into a learning experience, here are some very general rules for digital music start-ups:
1. Focus. If you can't describe your service in a single sentence, you're doing too much. Think of the few successes in the digital music space we've seen so far. iTunes Music Store: buy songs and they'll automatically transfer to your iPod the next time you connect it. MySpace (from a music standpoint): people can learn about and sample musicians that their friends and peers like. CDBaby: online CD store for unsigned bands. Pandora: builds a custom radio station for you based on your musical taste.
2. Uniqueness. We've already got plenty of choices for downloading and streaming music--what can you offer that's different? Social networking won't cut it because it's so subject to network effects--the more people are on one, the more useful it becomes. MySpace has been doing social networking-plus-music since 2005 and consistently draws more than 100 million users per month. How will you convince anyone to migrate to your brand new service when all their friends are still on MySpace? I'm not saying it's impossible, but you better have something unique.
3. Music listeners are cheap. This is a hard one to swallow, but any time I'm listening to a pitch or reading about a new online music service and the idea of fees--particularly monthly subscription fees--comes up, I immediately think "fail." It may not be moral or fair, but any fee-based music service has to compete against a huge amount of free music that's easily available to anybody with an Internet connection. So what's the answer? Music listeners are also lazy! You can charge money if--and only if--you offer a significantly easier experience than we could get by frequenting file-sharing sites and other free sources (not to mention ripping CDs from our friends). Again, iTunes is instructive: you pay to download the songs directly into the same app you use to transfer them to your iPod. Saving a few steps is worth $0.99.
A quick aside: musicians are even cheaper, and well-attuned to suspect anything that smells like pay-to-play. Good luck with that.
4. Launch strong. On the day your site goes public, you better have enough capacity and bandwidth to accept all the curiosity seekers. Your site better be so easy to use that I don't have to read the FAQ. And most important, you better launch with all the content (that means licensing deals ahead of time) and features you promised--I feel so burned by Qtrax (just to pluck an example out of thin air) that I'll probably never write about the company again.
Social.fm, a music site that was known as Mercora until last year, has officially folded.
"We regret to inform you and apologize for this inconvenience, but Social.fm will be shutting down the system on July 31st, 2008," a message on the site read.
The shutdown was first reported by GigaOM.
Despite having raised $5 million in venture funding from Norwest Venture Partners and signing a deal with Microsoft, Social.fm never found its niche. It originally started out as a peer-to-peer Web radio and music search site, and CEO Srivats Sampath once made the dubious claim that his company "beat Steve Jobs to the iPhone" by letting people share music wirelessly through its smartphone-based "M" service.
With its makeover as Social.fm, Mercora cut its subscription fee and focused more on social music. But with significantly larger competitors in the space--Pandora, Last.fm, Imeem, and iLike--Social.fm's traffic tumbled.
Disclaimer: Last.fm is part of CBS Interactive, which also publishes CNET News.
Social.fm (formerly Mercora) has a new music sharing widget for social networking users that's got a few tricks up its sleeve. For one thing, it'll scour your profile (on the Facebook version) to figure out your musical tastes, and then do its best to serve up a playlist of those same artists, or others that have been clumped in the same playlists by Social.FM's DJs. The great hope is that the player will adapt to your changing tastes.
Like Qloud's solution, which I took a look at earlier this month, the widget goes hand-in-hand with a desktop application that will link up to your library and do the same thing with your entire music collection. The weakness therein is the widget's UI, which borrows from Apple's CoverFlow sans actual player controls save a large stop button. While this works okay for a few songs, like the inherent weakness of CoverFlow as a navigation medium, the system falls apart if you're actually trying to browse a large music collection or use the right side of your brain for finding artists, albums, or genres.
Look familiar? Yeah Social.fm's social networking jukebox widget looks a lot like Apple's CoverFlow.
(Credit: CNET Networks)One thing Social.FM does really well (as it should) is serve up good music. There are some high-quality tracks on here, and a lot of it is surprisingly not just run-of-the-mill studio cuts, but radio appearances or professionally recorded live performances. One of my big beefs with Qloud was that the entirety of the content was coming from YouTube, and there was no way to really dig in to try to get better versions of a song. Facebook users get the added benefit of being able to share their listening habits with others, as listening to a track will publish to your mini feed, and music your friends are listening to will show up in the main news feed if they've got the app installed.
Social.FM is serving up two versions of the widget, one that's a Facebook app, and another that you can plug into any social networking service or site that can handle Adobe Flash embeds, like MySpace, Friendster, and Xanga. You can also stick it on your blog or Web site, which I've done after the break. The company tells me they're working on integrating better with Google's OpenSocial initiative to make their non-Facebook version a little more robust. They're also working on adding a recommendation feature that will let you share a song you're listening to with any user, similar to what some of the other Facebook music apps have done.
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The 4-year-old company Mercora has re-branded itself as Social.FM, which does two things: 1) Sounds appropriately Webware-ish and 2) explains what the service does right in the name.
Mercora used to be an Internet radio service, but then it launched a music-streaming service for smart phones, "M," last year. It had a $50-a-year subscription fee, but it allowed owners to stream music from their own PC to their phone, as well as access the music of up to five friends.
But now, it's free. And it is utilizing the Internet buzzword of the moment--social--to describe itself. The Social.FM Web, a new product, is a "social music discovery service" that allows users within the Social.FM Network to log on to its site and share specially created music channels and individual tracks. Thus far, the company says there are 3.5 million tracks uploaded by users.
It's also hoping to lure developers of widgets and add-on services. The Social.FM Web site was developed in an Adobe Rich Internet Application framework and will now have Mac OS X and Linux support.
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