News Corp Bets $77M on Beyond Oblivion’s Locker

Beyond Oblivion, a new music locker service, has received a massive $77 million investment from News Corp and charity Welcome Trust. Rather than fight the major labels like MP3tunes, Beyond Oblivion plans to buy its way into their heart. It has assured rights holders a $500 million revenue guarantee, and will give between 70% and 90% of its total revenue to them. How does Beyond Oblivion work and will it pay artists?

Good question.

Beyond Oblivion intends to charge device makers a one-time free to have its software pre-installed on their devices. It will then pay content owners every time a song – of any origin, legal or not – plays through the software. The goal of Beyond Oblivion is to monetize all forms of music consumption. Given that the major labels are still fighting digital lockers, for fear that file-sharers would be allowed to gain access to pirated music, the company hopes to pacify their concerns by paying them for such uses, i.e. throwing piles money at them.

Commentary

At some point, these costs will come back to users, and that's to say nothing about how artists benefit from this. To labels, Beyond Oblivion looks to be an oil field to bleed dry. For artists, it may be yet another river of pennies that never quite adds up to a dollar. If users adopt the service en masse, that river could turn into an ocean, but as the past reveals, old media investment is no promise of consumer acceptance. As negotiations with the major labels evolve, Beyond Oblivion's business model could change and the cost to users could rise, but you're forgiven if as an artist, it's not clear how any of this money finds its way back to you. This scenario looks like big media is paying old media not to die.

Both the major labels and News Corp live a little longer, but nothing changes.