After months of rumors and false starts, it’s finally being confirmed that music streaming service MOG is in fact being acquired by headphone maker Beats. While details of the deal aren’t being made public, GigaOm initially reported that the sale price was in the neighborhood of $14 million, although sources close to MOG later said the number was "significantly higher."
Beats wants to provide the whole music experience
Speaking by email, MOG founder and CEO David Hyman tells USA Today that "the addition of MOG’s music service to the Beats portfolio will provide a truly end-to-end music experience," in reference to the company’s headphones and EQ software, and majority owner HTC’s music-playing mobile devices like the One X. There hasn’t been any public discussion of how Beats might leverage its acquisition — back in March, Beats co-founder Jimmy Iovine said he couldn't "show the magic trick" — but, as pointed out by USA Today, offering free trials of MOG’s mobile service to Beats customers would seem like a natural first step. While its web service is free, MOG’s unlimited mobile download service currently costs $9.99 a month.
We can understand Beats wanting to branch out, but why MOG, exactly? The headphone maker’s COO Luke Wood cites the fact that "they were the first service to offer their entire catalog in the 320-kilobit format," along with the streaming service's multi-platform ambitions. The question is whether Beats can turn its huge success in the highly fashion-driven headphone space into real progress for MOG against bigger competitors like Rdio and Spotify.
Update: Looks like GigaOm was right. According to HTC's investors page, the "total monetary amount of the transaction" was $14 million.