As reported by Guardian, streaming music service Bloom.fm, app with more than 1.1m registered users in the UK alone, has shut down after its main investor pulled out suddenly.
The company, whose smartphone app had signed up more than 1.1m users in the UK since its launch in January 2013, announced the news in a blog post.
“We’ll keep this short because we’re pretty shell-shocked. It’s game over for Bloom.fm. Our investor, who’s been along for the ride since day one, has unexpectedly pulled our funding. It’s come so out of the blue that we don’t have time to find new investment,” explained the post.
“So, with enormous regret, we have to shut up shop. This is a poetically crappy turn of events as our young business was showing real promise. Our apps and web player are looking super-nice and we had 1,158,914 registered users in a little over a year.”
Bloom.fm’s investor was Russian broadcaster TNT, which had backed the firm since its previous incarnation as music downloads store mFlow, which launched in 2010 then shut down in 2011, with the company subsequently pivoting to a mobile streaming model.
Bloom.fm chief executive Oleg Fomenko said that the main reason for TNT pulling out now is “organisation change on the side of our investors”, but also cited the difficulties of balancing the books with Bloom.fm’s royalty payouts to music rightsholders.
“Underlying this decision is economics – there is no business case at the moment in licensed digital music – margins are too low and up-front and growth costs are too high. The solution is a massive scale that then will allow for re-distribution of margins in the value chain,” he said in an email.
“Most consumers are not willing to pay existing prices and you can see this in dominance of YouTube and by popularity of totally free ways of listening to music on the mobile, so we do hope that someone will re-start to offer truly mass-market streaming options soon. I am very saddened that it will not be Bloom.fm.”
The company’s app enabled users to stream personalised radio channels – streams of music based on their favourite genres and previous listening habits – for free. They could then choose to pay £1, £5 or £10 a month to cache varying numbers of songs on their phone for on-demand, offline listening.
Bloom.fm had licensing deals with several major labels, although it had been in lengthy negotiations with UK collecting society PRS for Music over royalties due to publishers and songwriters which, if backdated, could have been a big bill for the company – and by extension its main investor – to foot.
At the time of its closure, Bloom.fm was preparing to launch a web version of its service, which had been in closed beta for several months. The company also made headlines recently when it revealed that it had been banned by Apple from using its iAd mobile advertising network.
“They stopped us advertising a few weeks ago and we were unclear why. Then we received an email from our marketing agency saying that it was against their policy to advertise competing services,” Bloom.fm marketing director Jon Clark told The Guardian at the time.
Bloom.fm won’t now be around long enough to compete with Apple’s own personal radio service, iTunes Radio, when it launches in the UK.
Source – Guardian