SAP and Oracle swat at the startups
Both have dedicated most of their acquisition budgets to cloudbased companies. In recent years, specialized companies such as Salesforce.com and Workday have dominated the market for cloud- based human resources, customer relations, and logistics software
cost for a store is about quadruple what a private listener pays for Spotify, and Soundtrack keeps half of that, vs. the 30 percent of subscription fees Spotify pockets. “The market is super-fragmented and dysfunctional,” says Sars, clad in a T-shirt in Soundtrack’s minimalist headquarters in Stockholm. “Nobody had a simple cloud-software distribution solution.”
Many smaller retailers and restaurants don’t know they’re breaking the rules when they pipe in music from consumer streaming services, Sars says. By streaming songs online and offering a simple interface, Soundtrack can win small businesses in the same way Apple’s itunes weaned customers off pirate music sites. “You need to be able to distribute the service in an efficient way, and if it’s accessible online then there’s a huge market,” says Sars, who helped create Beats Music, the streaming service Apple bought in 2014 for $3 billion.
Soundtrack has raised about $20 million from backers including Spotify, Swedish phone company Telia, and U.S. commercial streaming provider Playnetwork. As Sars spends that money on a global expansion, he’ll face a host of competitors. The market leader is Mood Media, which acquired Muzak in 2011 and retired the name two years later. Although Mood is far larger— it serves more than 300,000 locations—it’s losing money and is restructuring to pay off debt. It launched its own streaming service, Mood Mix, in 2014, giving users access to millions of songs and programmable playlists, but most of its customers still get their music either on CDS delivered by mail or via satellite or the Internet. At least a dozen smaller players, such as Touchtunes Music and Imagesound, provide similar streaming services, but Soundtrack has a clear edge, says Simon Dyson, an analyst at Ovum, a technology consulting firm in London. With Mcdonald’s, he says, Soundtrack has a “springboard to much bigger things.”
The bottom line Sweden’s Soundtrack aims to unseat leader Mood Music with its cloud-based service streaming background music to businesses.