First Take: Electric Jukebox Aims To Take Digital Music To The Mainstream

Back in 2009 I wrote a report at Forrester entitled 'Taking Digital Music To The Mainstream: The Music Product Features For The Living Room’.  In it I outlined a vision for a standalone, affordable connected hi-fi for the living room that came pre-packaged with all the music in the world.  An out-of-the-box, easy to use music experience for the mainstream consumer. This was a time when Spotify was only just beginning to get going, iTunes still dominated the digital marketplace and most digital music listening either happened on computers or iPods.  It was also however the start of a renaissance in TV tech, the flat screen boom.  Consumer electronics spending was shifting firmly away from the hi-fi to the TV, which was also growing an increasingly large appendage of various connected boxes.

The PlayBox

I was so serious about the opportunity that I even explored setting up my own business to pursue it, going as far as creating detailed spreadsheets and a business plan.  But it quickly became clear that the structural dynamics of the day made it an unlikely bet.  Manufacturing costs were high and the big CE companies had a strangle hold on manufacturing.  Distribution was challenging and the music rights were excessively costly (back then preloading the device with a hefty amount of downloads was necessary to deliver an out-of-the-box experience for the mass market home).  But I didn’t give up on the idea and I revisited a streaming-era version of the concept in my book ‘Awakening: The Music Industry In The Digital Era’, this time calling it the PlayBox.  Now with production costs so much lower, distribution much more practical and streaming subscriptions providing the out-of-the-box music, the product concept is more practicable and affordable.  (I suggested in my book that it should retail at just below $200.)

The Electric Jukebox

Now fast forward to 2015 and we have the launch of the Electric Jukebox, a device for the mainstream living room that delivers an out-of-the-box music experience for $199 for a years’ worth of music.  Founded by former Omnifone CEO Rob Lewis Electric Jukebox is a bid to take digital music to the mainstream with product features for the living room.  It comprises a dongle that plugs into the TV and a year’s access to a curated on demand music service with playlists programmed by celebs with a mainstream bent (e.g. Mr and Mrs Robbie Williams, Sheryl Crow etc.)

Given my ‘previous’ in this space you will not be surprised to hear that I am enthusiastic about the approach.  Music is indeed disappearing out of the living room and the mainstream music buyer is getting left behind by the digital music bandwagon.  As we revealed on Monday 43% of consumers still buy CDs, a far bigger number than buy any digital music product, downloads included.  So there is a clear opportunity for the mainstream music consumer and the living room is probably the right place to start.  These are not consumers that are streaming music to their phones or building big playlist collections.

Content Connectors Present A Key Challenge

But the path to these consumers is not straight forward.  They are passive music fans who do not spend regularly on music, so a $200 investment will be a big ask for them.  This is why Electric Jukebox are aiming for the super mainstream, the consumers who used to / still buy CDs regularly but aren’t yet one of the world’s 50 million music subscribers.  How many of them are strong prospect for an integrated streaming / hardware product though is less clear.  There are two key reasons for this:

The home audio space is hotting up, as evidenced by Sonos’ and Google’s recent product launches and there is no doubt that there is money to be made and that Electric Jukebox has an addressable audience.  But that audience is finite.  Whatever some bullish music industry execs might say, the recorded music industry is never returning to its apogee.  The days of music spending as a mainstream behaviour are gone. Growth will come from making more money out of the super fans and rescuing the spending of the super mainstream who either are falling out of the habit of buying CDs or downloads. 10 years ago that would  have meant no more new music on demand.  Now there is always a YouTube safety blanket.  That is perhaps the biggest change in the music world since I first conceived my audio concept and one of the biggest challenges to any attempt to monetize digital music.

For an exhaustive assessment of the Connected Home Audio market, including vendor profiles, market forecasts, pricing and vendor market shares check out the MIDiA Research report ‘Connected Home Audio Forecasts, 2015 to 2020:The Reinvention Of Hi-Fi’.  Email us at info AT midiaresearch DOT COM for more info.