When it launched in April 2010, mFlow was an intriguing variant on the iTunes music-downloads store template, wrapping a Twitter-like social layer around its service, and rewarding fans with store-credit every time their friends bought a track they’d recommended.

It was iTunes+Ping before Ping was even A Thing, but unfortunately it was about as successful, shutting down in November 2011. The team behind it regrouped, though, and has now launched a new digital music service called Bloom.fm.

This isn’t an a la carte store: it’s a Pandora-style personal radio iPhone app, which made its debut in the UK App Store this month. It’s free to download and listen to genre and artist-based stations, with users able to then pay a monthly subscription to “borrow” (i.e. cache) tracks locally on their devices.

Mobile-first radio

“We wanted to focus on mobile,” CTO Thong Nguyen tells Music Ally. “We’re betting our service on the fact that mobile is going to be the major form of computing in the next decade, and by focusing on that it made it easy for us to design a really good product, although that doesn’t mean we’re not going to do tablet and web too.”

The app has a slick, modern feel: less lists and more floaty bubbles, sitting neatly alongside social apps like Path in its determination to make a touchscreen-friendly user interface.

The business model is also interesting: users pay £1 a month to borrow 20 tracks, £5 for 200 tracks or £10 for as many as their iPhone can hold, with the latter tier turning Bloom.fm into a full on-demand service. Tracks can be swapped in and out as often as users like: a feature reminiscent of RIM’s BBM Music service on BlackBerry smartphones.

“In terms of streaming, everyone is pretty much taking the same position: £10 a month for unlimited streaming including mobile,” says CEO Oleg Fomenko, who suggests this won’t appeal to a big chunk of the population: the kind of people who spend money on an iPhone, but may balk at paying £120 a year for music.

“They’re living off their old collection of CDs, and while they might buy the odd track from iTunes, their spend on legal music is minimal,” he says. “Price is a massive barrier, so we wanted to have a subscription service that would give you the opportunity to enjoy music for £1 a month.”

Fomenko admits that initial meetings with labels to pitch that £1 price point included a certain element of “Oh My God!” from the rightsholders, but says they cam round to the idea quickly, even if it then took time to sign the actual licensing deals.

“It’s about step-change: a £1 product, a £5 product and a £10 product. But this is a brand new product and there was no template for it. We had to rework a lot of the basic details with them.”

Bloom.fm has deals in place with Universal (plus EMI), Sony Music, Beggars Group and indie distributors including The Orchard, PIAS and INgrooves, with a catalogue of 17m tracks that Fomenko says will swell to 20m in a few months’ time.

Including lone major-label holdout Warner Music? “We’re working on that,” he says with a wry smile. The pitch is clear though: Bloom.fm thinks it can reach consumers who aren’t (yet) prepared to pay £10 a month for a music subscription.

“The more enlightened people working in labels know we need more keenly-priced products to reach the world,” says Fomenko. “We’re catering to an audience that right now is being completely and utterly alienated. 80% of the population haven’t really tried streaming music services.”

Facebook fuel

This aim is reflected in the app’s design, including its use of Facebook accounts to sign up, which sees people’s musical Likes used to spawn the first genre radio stations that appear on the first screen they see. I’d been wondering why Britpop was staring me in the face the first time I logged in.

“We wanted to take any thought out of it: a lot of people don’t want to think about ‘recommendation’, they just want music to come at them,” says marketing director Jonathan Clark. “Other people who know exactly what they want to look for will be using the search feature.”

Bloom.fm is keeping its cards fairly close to its chest regarding how its radio stations are programmed and how its recommendations are produced – data from the mFlow days, and “a whole bunch of different third-party sources” according to Fomenko.

It’s a very good app, but there are two key challenges for Bloom.fm, if it wants to avoid mFlow’s underwhelming end. The first is that business model, and specifically how the company plans to pay for all its free radio streams, particularly if the app gets very popular very quickly.

If Pandora still thinks it can’t make the revenues/royalties balance work in the UK, how can Bloom.fm? Advertising will play a role, but it’s not the main plan. “Yes, there is advertising coming, but we’ll do it as a contributing revenue generator,” says Fomenko.

“Do I believe that it will be able to pick up the costs of the free service? No. Not yet, unfortunately. We do need to make sure that people buy the £1, £5 and £10 subscriptions: that’s the main source of revenues.”

The theory here is that the leap from free to £1 a month (or £1.49 if purchased in-app, with higher prices to factor in Apple’s 30% share) will feel easy enough for a good number of users, who’ll then decide they want more than 20 borrowed tracks and upgrade further.

“Through our trials, the average usage – the need for borrowed tracks that people had – was somewhere between 50 and 60,” says Fomenko. “If you mention that to people in the music industry, they nod: that’s roughly those five albums from the time of CDs that would be lying on top of the CD player, which people would swap in and out.”

Free to £1.49 in the apps world is quite a leap, although a positive sign for Bloom.fm is the recent claim by industry analyst Canalys that Pandora was one of the 25 Top Grossing app companies on the US App Store based purely on $3.99 in-app purchases of its Pandora One subscription.

Word of mouth

The second major challenge for Bloom.fm, though, is discovery. Not discovery of songs within its app – it does that pretty well – but discovery of the app itself, on an App Store bulging with 775k iOS apps.

If Bloom.fm is for mainstream consumers, how will they find it? The company is hoping that its polished product will spur a certain amount of word-of-mouth, with a five-star average rating on the App Store from its first 34 reviews – Fomenko hastens to add that these are genuine user reviews, not fake-rating shenanigans on the company’s part.

A consumer-focused PR campaign will kick off shortly, as well as social media activity. “We will actually be spending money, starting with mobile advertising,” says Fomenko.

“What we learned with mFlow is first make sure the product is perfect, then talk to the market. As opposed to talking to the market, then realising this doesn’t work as you hoped, and losing momentum.”

He adds that there will be “two or three big, meaty announcements” coming in the next six months to keep Bloom.fm’s momentum high.

There will also be more devices: an Android app is being beta-tested, with work starting on iPad too. “On Android, we’re going to try to make it perfect on three or four mainstream handsets, and work well on the others,” says Nguyen.

“On iPad, we won’t do an app that just stretches the images. While we’re pretty much using the same look and feel, it’ll be a complete redesign to use that extra space.”

There are also plans for other, related projects. “We have ideas on how we can build some new products on that existing commercial model – £1, £5 and £10 – and the app,” says Nguyen. “New use cases beyond Bloom.fm and beyond listening to your own personal music…”