Spotify and Apple Music rival CÜR Music quietly launched in the US this week with 10m licensed tracks – but there could be more on the way.
MBW has discovered that the three biggest recorded music companies in the world, Universal Music Group, Sony Music Entertainment and Warner Music Group have all licensed the platform in the past fortnight.
And it will be no surprise to hear that all three appear to have taken a chunk of equity for their trouble.
On January 12, 2016, CÜR Media Inc issued UMG, SME and Warner warrants to purchase an aggregate (total) of 2,798,613 shares, at a weighted average price of $0.49 per share.
2.798m X $0.49, for those of you without a calculator handy, works out at $1.37m.
According to an 8K SEC document filed last Tuesday (January 19), CUR Media has entered into a “Framework Digital Distribution Agreement” with Sony Music Entertainment for a “limited non-exclusive license under SME’s copyrights to digitally distribute a wide catalog of certain sound recordings and related materials owned or controlled by SME”.
The filing reveals that CÜR will be “comprised of three progressively priced and increasingly functional tiers” – hinting at a development of the service in the near future.
Sony has protected itself with a guaranteed advance, predictably enough, and is expecting a payday from CÜR at the end of this month.
In consideration for the rights granted by SME to the Company, the Company will pay SME certain advances and minimum revenue guarantees (the “SME Advances”).
The initial SME Advance is due on January 31, 2016. The SME Advances are non-refundable but generally recoupable during the term against service fees payable by Company under the Sony Music Agreement.
The same SEC filing reveals that on January 13, CÜR entered into a ‘Subscription Streaming and Enhanced Radio Services Agreement’ with Warner Music Inc.
Another US-only licence, Warner has granted CÜR ‘with a limited non-exclusive license to stream certain sound recordings and display related artwork and other materials owned or controlled by Warner’ within the US.
And just like Sony, there’s a guaranteed advance involved:
In consideration for the rights granted by Warner to the Company, the Company will pay Warner certain advances and minimum revenue guarantees (the “Warner Advances”). The initial Warner Advance is due on January 31, 2016. The Warner Advances are non-refundable but generally recoupable during the term against service fees payable by Company under the Warner Music Agreement.
CÜR’s Universal deal is covered in a separate SEC 8K document, filed yesterday (January 25) – suggesting its UMG agreement took a little longer to hammer out.
It says that CÜR has entered into an “Audio Streaming and Conditional Download Agreement” with UMG effective January 15.
Another US-only agreement, UMG has agreed to provide a limited, non-exclusive license under Universal’s copyrights to ‘digitally distribute a wide catalog of certain sound recordings and related materials owned or controlled by Universal in connection with the Company’s CÜR-branded Internet music service’.
There is no mention of advances, perhaps because the complete Universal deal will be filed later in the year with CÜR’s annual accounts.
However, CÜR warns: ‘The Company intends to seek confidential treatment for certain portions of the Universal Music Agreement.’
That will please managers.
CÜR Music (pronounced ‘cure’ – like ‘curate’, geddit?) first landed on MBW’s radar back in February last year, when we reported that it had entered into a digital content streaming agreement with Medianet – the B2B partner of Beats Music, HMV and others.
At that time, the platform was being backed by music business veterans such as MTV founder John A Lack and former RCA Chairman/CEO Bob Jamieson.
It was described as a “hybrid streaming service” that “intersects internet radio services like Pandora and on-demand services like Spotify”.
Since then, the company has raised $1.75m in financing led by members of the company’s management and board of directors.
The new SEC filings reveal that Bob Jamieson has now resigned as the VP of CÜR’s Board for health reasons and ‘did not arise from any disagreement with the Company on any matter relating to the Company’s operations, policies or practices’.
In the same time period, Barefoot Media boss Bill Campbell has joined the company’s Board.
So what marks CÜR out as different from its rivals?
According to its early iTunes Store presence in the US, CÜR is “a mix of internet radio, expertly curated stations, and your own playlists all-in-one”.
There are two ad-free subscription tiers: one at $2.99 a month (‘Octo’), and one at $6.99 a month (‘Inked’).
[UPDATE: It now appears these two options are cheaper than first thought, at $1.99 per month and $4.99 per month – although the app’s subscription may be more expensive on iOS than Android.]
The latter gives users an option to listen offline, but both are significantly cheaper than Spotify and Apple Music, whose typical premium service costs users $9.99 per month.
The whole thing, as you may have ascertained, is octopus-themed.Music Business Worldwide