Today, Microsoft announced plans to cut up to 18,000 jobs over the next year, including 12,500 from the Nokia Devices and Services unit that the company recently acquired. That’s around half the staff that came over as part of the deal.
What does this mean for Nokia’s well-regarded MixRadio streaming music service? We’ve been wondering whether it would be merged with Microsoft’s own Xbox Music or even shut down since the acquisition was announced.
It’s neither though. “Basically, we’re planning a spin-off,” MixRadio boss Jyrki Rosenberg told Music Ally in an exclusive interview shortly after Microsoft’s announcement of the wider cuts.
“Microsoft is going to focus on developing and maintaining the best operating system for consumers to use music and entertainment with their choice of third-party applications,” he added.
Rosenberg stressed that Microsoft and MixRadio will maintain strong links, including continuing to preload its app on Windows Phone smartphones. But as an independent company, MixRadio’s horizons have suddenly got much, much wider.
“For me personally it’s very exciting. I’ve been meeting with potential investors around the world in the last few weeks. We have very strong interest from investors in the US, Europe and Asia, and we remain open for further discussions,” he said.
Rosenberg declined to give specific details on how MixRadio’s service might evolve now it’s independent. Its current focus is personal radio: mixes (playlists) curated by its in-house team of “mixologists”, which can be streamed and/or cached on users’ devices.
Does spinning off from Microsoft finally give MixRadio the freedom to launch on other platforms like Apple’s iOS and Google’s Android?
“The opportunity in this kind of setup is vast, and it’s much greater than what we’ve been able to benefit from today,” said Rosenberg. “I have to say, though, the business relationship we’ve enjoyed with Microsoft’s device group has been tremendous, and we’re privileged to be continuing that relationship.”
An independent MixRadio is big news in the digital music world, though: a Pandora-style personal radio service that’s already available in 31 countries with – in Rosenberg’s words – “millions of happy customers”. If (well, surely when) it expands to iOS and Android, it could be a major player in the increasingly-crowded streaming music market.
The caveat: MixRadio may need a new business model to accompany its newly-independent status. Until now, MixRadio has been free and advertising-free: its value to Nokia was helping to sell more Lumia smartphones.
In January 2013, it launched a €3.99-a-month premium tier – under the old brand of Nokia Music+, but since changed to MixRadio+ – offering unlimited track skips and cached mixes; higher-quality audio and the ability to stream on other devices via an HTML5 site.
A free service upselling to an affordable premium tier is hardly unknown in the personal radio market – it’s exactly what Pandora offers – but the difference is that Pandora makes money from its free service with ads.
As MixRadio strikes out on its own, it may need to build an ad sales business from scratch, or figure out a different business model that appeals when the service isn’t bundled into the price of a smartphone.
That’s the future. For now, MixRadio’s staff have some clarity on their future following Microsoft’s layoffs announcement. “I’m here with all of them now in Bristol,” Rosenberg told Music Ally as the interview drew to a close. “I can see a lot of confidence and enthusiasm in the team.”