Melodeo, Making Big Push in Online Music, Eyes Apple in the Cloud

1/12/10Follow @gthuang

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over wireless networks, which can be slow and unreliable, down to mobile phones with varying (and non-ideal) specs. “Devices still don’t have the power or screen real estate. There’s a lot you have to do to make things small and run fast,” said Bob Wise, the company’s senior vice president of engineering.

So far, the effort seems to be paying off. Dederer says Melodeo has sold well over a million paid apps, of which nuTsie for mobile devices is the main part of the business. The company also makes money through white-label deals with Starbucks, Salvation Army, Sony, and other big organizations.

I asked Billmaier what Melodeo’s biggest challenge is now. “For us, it’s market awareness,” he said. “Before, it was validation of cloud-based music. We couldn’t have cracked that on our own. Now our solution can go mainstream.” Billmaier also commented that “Lala had lots of money. We’re building a company the old-fashioned way, with profits.” Dederer added, “We might be the sole profitable digital music company in the world.”

Which brings us back to Apple. “Strategically, now that Apple has acquired Lala, we’ll be part of the answer to, ‘What will everyone else do about this?’” Billmaier said. By “everyone else,” he was talking about consumers, wireless carriers, big tech companies like Google and Microsoft—anyone who has to “survive versus Apple” in the digital media world, he said.

So, assuming Melodeo doesn’t get bought by Google or another Apple competitor tomorrow, what’s the near-term outlook for the company? “We have some deals in the hopper that could triple or quadruple our revenues and make us go from marginally profitable to massively profitable,” Billmaier said.

That would be impressive indeed. But it sounds like Melodeo is happy to strengthen its own position in the world of cloud-based music and build up its user base and partnerships, while staying out of the way of the tech giants—at least until its service becomes indispensable to them.

“Apple is the new Microsoft,” Billmaier said. “They’re on a collision course with Amazon and Google.”

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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