byÂ Charlotte Hassan
According to the Wall Street Journal,Â CÃœR Media has received â€licenses from all three major record companies, giving them a collective $8 million in advance money.â€
In return for the $8 million, CÃœR has given each record company a â€5% stake in the company.â€ However, despite receiving such a high volume of money,Â CÃœR Media â€still needsÂ to raise more money to launch the serviceâ€, says Tom Brophy,Â CÃœRâ€™s chief executive.
Brophy, says the low monthly price points available wasÂ â€the centerpiece of his pitch when he started licensing negotiations with record companies several years ago.â€ Â Accordingly,Â CÃœR will have three tiers, one called â€œOctoâ€ which will be priced at $1.99 a month that includes â€eight on-demand songs a day,â€ and will also feature a custom radio similar to that of Pandoraâ€™s. The other two tiers will be priced atÂ $4.99 and $9.99 a month.
The low price, along withÂ CÃœRâ€™s strong social components which allow users to share songs with attached photos and short personal videos are a definite way to attract young consumers, like college students for instance.Â â€Octoâ€ is targeting the younger demographic who may not have the disposable income to pay for other streaming services, like Spotify, Apple and Tidal for instance.
It will be interesting to see howÂ CÃœR plans to get the service off the ground. It may continue to sell stakes in the company to raise the rest of the money it requires.
It is unknown at this stage exactly where this vital money is going to come from.