Analysis

Beyond Oblivion’s Boinc rises from the grave to launch… in Venezuela


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boincDigital music startup Beyond Oblivion crashed and burned in December 2011, before it even got a chance to launch commercially. Now its Boinc music service has risen from the dead – in Venezuela.

The news came in a press release from The Echo Nest, which is providing “rich music information and local music understanding” to Boinc, which is now under the roof of New York firm Gee Beyond Holdings, the company set up by former Beyond Oblivion CEO Adam Kidron to buy the assets of the bankrupt company.

According to The Echo Nest, the new Boinc will be preloaded onto every pay-as-you-go Samsung Galaxy S3 Mini smartphone sold in Venezuela by Movistar, the local subsidiary of telco group Telefonica.

Boinc is using The Echo Nest’s technology to power features including “Boinc lists” – personal radio-style playlists based on specific artists, tracks and albums available through the service.

“The Echo Nest’s capabilities, richness of music data, and overall quality are unmatched in the industry. We have used only a fraction of what they have to offer, and will continue to leverage their platform as we grow and expand,” says Boinc CTO Dmitry Grinberg, who joined Boinc in May 2012, shortly after Kidron bought Beyond Oblivion’s assets.

Boinc’s website has a bit more blurb: “Launching exclusively in Venezuela on the Movistar network, boinc will gradually expand to become a global eco-system of inter-connected boinc users and devices, all sharing and opening each other’s ears to new music.”

On the face of it, this is a good deal for The Echo Nest, as it tries to expand into Latin America (just like Shazam, which also has big, telco-partnered ambitions in the region). “As we continue our global expansion, we see Latin America as a priority growth market,” says The Echo Nest’s CEO Jim Lucchese.

Beyond Oblivion’s ambition was always to sign a global deal with a big handset manufacturer to preload its service. A deal in one Latin American country for one smartphone through one operator is something of a comedown in that respect.

But Boinc will hope that Venezuela can be a step along the road to rebuilding its reputation within the music and technology industries, and signing more deals elsewhere.

Beyond Oblivion famously ‘raised’ $77m of funding from News Corporation and  Wellcome Trust in March 2011, with Kidron making big promises to the music industry. “We’re going to launch with $500m revenue guarantees, and we pay a large proportion of that – between 70% and 90% – back to content owners,” he told The Guardian at the time.

However, after the company filed for bankruptcy, it emerged that Beyond Oblivion had actually received only a portion of that funding: $32m according to All Things Digital.

The company’s financial status had always been the subject of speculation within the music industry. In August 2011, the Financial Times claimed that Beyond Oblivion was already seeking more funds in order to pay music rightsholders huge advance payments for the rights to make their catalogues available. The company protested, and got the FT to change its story.

Speaking after the company closed its doors in December 2011, Kidron told the same newspaper this: “Beyond was always a tremendously grand ambition as the advances required by the record labels and music publishers were substantial, reflecting the breadth of the rights required to create a true digital music one-stop.”

That was certainly true. In March 2012, Evolver.fm published an exhaustive inquest into Beyond Oblivion’s implosion, reporting that the company was seeking at least $200m in commercial commitments from potential operator and device-maker partners to cover its advance payments.

Legal papers from the bankruptcy procedure revealed that major labels Sony Music and Warner Music were seeking $50m of promised payments each as creditors of Beyond Oblivion, although they later settled for between $1.5m and $2m each.

Since then, Gee Beyond brought in former HTC exec Shashi Fernando as president of the new service, and quietly launched an iPhone beta test in July 2012 for its new service.

Stuart Dredge

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One response
  • Rob says:

    I think the idea is that they won’t get sued by record labels in Venezuela as it’s a lawless land. In my view they just fooled Movistar into a bad deal given the economic reality of the country.

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