Why Mog's Music Model Is Way Better Than Lala (and What It Means for the New Economy)

Last week, streaming music service Lala was acquired by Apple for a rumored $80+ million dollars. It's a great service that allows customers to pay for unlimited streaming access to songs and albums for a fraction of what it would cost to download the song using a service like iTunes. But the under reported and I think much more relevant news was the launch of Mog's all access service.

Mog is like Lala, with one important difference. Both companies have contracts with record labels to give them access to their full catalog. Instead of paying per song or album, however, Mog has a flat $5/month cost. This may seem trivial, but the difference between even a low pay-per-song model vs. a subscription fee is a difference that cuts to the core of what's wonderful about music today.

Since the dawn of the MP3, the most significant cost reduction in music has been the cost of experimentation. Whereas the process of finding new music used to be going to a record store, reading a magazine, asking the clerk what they thought, and then carefully selecting a CD, now anyone can, with great speed and little or no cost, find a sample of anything in the world. My friend Blake wrote an incredible piece explaining this argument about how the lowered cost of distribution had enabled the audience to get smarter.

The effect in music is that artists who never would have been able to make a living just a decade ago are now getting wider and wider traction, in turn opening up new ears and continuing to expand the palate that opened the doors for them. One of the specific effects is that we're in a moment where global artists have more access to American listeners than just about any time before (Paper Planes anyone?).

Lala's model is inherently tied to the old style of music consumption. Even at a low cost, I'm still going to take time to make specific decisions about what I most want to listen to. Inevitably this means that anything that doesn't catch my ear in the one listen they allow free probably doesn't make the cut (this being despite that many of my favorite records of all time didn't capture me at first).

Mog on the other hand allows me to try as much as I want, and let any little instinct turn into a new discovery. I've gone through just about every year end album list I can get my hands on and already have two or three new groups I never would have gone through before.

Why does this matter? Completely outside how much joy new musical discovery brings, it's an example of companies clinging to an old model that makes less and less sense in a new paradigm in which the costs of distribution have fundamentally changed. Companies have to get smart about this stuff, or our economy will continue to exist in an uncomfortable space between what people want now and companies desire to distribute it the way they did yesterday.

(Photo: juanpol)