BSkyB (NYSE: BSY) has closed its music-subscription service, Sky Songs, little more than a year after its high-profile launch.
The music-streaming service, similar to the iTunes store, has been “unable to reach a large enough customer base”, the company admitted.
Sky Songs offered a premium service of advertisement-free streaming of up to 5m songs for £4.99 a month, a price steadily reduced since its ambitious launch in October last year. Neil Martin, then Sky’s business development director, said at the time: “We want millions of homes using this regularly.”
In an email to customers, Sky today said that although it was a “really innovative and good-value digital music service”, Sky Songs has failed to reach a “large enough” customer base.
Without paying for Sky Songs, users were limited to streaming up to 30 seconds of a track. It also offered a music-download service similar to rivals including Amazon (NSDQ: AMZN) and Spotify.
Spotify, on the other hand, allows unlimited streaming of songs, though punctuated by advertising.
Existing customers will have their payments cancelled today, the email sent just before 6pm today said. Customers will still be able to access the service until its full closure on 7 February. Any downloaded music is owned by the customer and unaffected by the move.
A Sky spokesman said the decision had been “difficult”, adding that the company “just didn’t see the consumer demand” it had hoped for.
Sky Songs launched with the backing of all four major record labels, EMI, Universal, Sony (NYSE: SNE) and Warner. Unlike many of its competitors, including Spotify, Sky Songs was a subscription offering only and did not attempt to woo users with a “freemium” model.
Innumerable streaming alternatives, such as We7 and last.fm, which offer music free at the point of access have proved more of a draw than the monthly subscription service. Last week it emerged that last.fm made a pre-tax loss of £2.8m in 2009, a dramatic improvement on the £17m loss in the previous year.
A Sky spokesman said: “We’ve taken the difficult decision to close Sky Songs. Although we are extremely proud of the service we built and the experience it offers, we just didn’t see the consumer demand we’d hoped for.
“As Sky Songs demonstrates, we’re a business that takes risks and innovates, but at the same time, we’re pragmatic and act decisively when a new venture isn’t working out.”
Virgin Media (NSDQ: VMED) is believed to be in negotiations with the big four record labels about a similar music subscription service, which it first announced in June 2009. Talks are understood to have stalled following record label reservations about an all-you-can-download offering for a flat monthly rate.
The big four are understood to be driving a similarly hard bargain with Spotify, which has had its US launch forestalled by industry negotiations. The labels are understood to be uncomfortable with the idea of unlimited streaming for non-paying customers.
This article originally appeared in MediaGuardian.