Research In Motion Takes a Shot at Social Music

Some people just don't know when to quit.

Today, struggling Blackberry maker Research In Motion (Nasdaq: RIMM  ) announced its new BBM Music service for social music sharing. Here's the rundown. For $5 per month you get to select 50 songs tied to your personal profile and can swap out up to 25 songs each month. The twist is that you grow your music collection by being able to listen to songs your friends and other members in your BBM Music Community have picked.

The more BBM friends you have, the more your library will grow. The service will rely heavily on trying to build out network effects, since clearly your $5 will go a lot longer if you have more BBM friends. The company has an installed base of 45 million BBM users to pitch to sign up.

RIM's declining market share won't help its attempts to promote network effects. According to Gartner, the Canadian company's market share fell to 11.7% in the second quarter, compared to 18.7% last year as Google's (Nasdaq: GOOG  ) Android and Apple's (Nasdaq: AAPL  ) iOS grew their shares.

The 50 song limit is insultingly inadequate for $5 per month. What you're paying for is the novel approach at sharing. No one in their right mind would pay that much for just 50 songs. The company has a tough sell trying to lure users away from popular services such as Spotify and Pandora (NYSE: P  ) .

Spotify's social sharing implementation is pretty hard to compete with: It connects with Facebook to find your friends and allows you to publish public playlists for all to enjoy. You can even send songs directly to your friends. Spotify is pricier at $10 per month, but even the free service is pretty compelling.

BBM Music really has nothing going for it. Its laughable song limit makes it useless compared to other cloud music locker services from Google and Amazon.com (Nasdaq: AMZN  ) . Its attempt at social sharing, while unique, is trying to build network effects from the ground up instead of simply plugging into the existing network effects Facebook enjoys.

I'll go as far as to make a prediction: One year from today, BBM Music will be gone, dismissed as a failed experiment, while Research In Motion's market share drops into single-digit territory.

Fool contributor Evan Niu owns shares of Amazon.com and Apple, but he holds no other position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Research In Motion, Google, and Apple. Motley Fool newsletter services have recommended buying shares of Apple, Amazon.com, and Google, as well as creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (4) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 25, 2011, at 6:09 PM, MAXwolf wrote:

    I have been a RIMM watcher for a long time, a close watcher. Most of the time when I read articles about the company, I see that the writer has some understanding of the company and what effects what. Here, this article, I don't know where to start, but I suggest you do some research before writing more. That doesn't mean reading more on line bloggers.

    I usually stop and take a look when I see Motley has something to say, but you can't win them all.

  • Report this Comment On August 25, 2011, at 7:07 PM, powerphrase wrote:

    Itoys,Ifun and toypad is responsible for economic disaster here in us and around the world. playing games all time no productivity is the main culprit. Buy bb 9930/9900 one of the best phone ever built help your self to grow and help the economy.

  • Report this Comment On August 25, 2011, at 11:57 PM, BR14 wrote:

    RIM may have a declining market share, but in a market that is growing fast.

    So fast that RIM continues to grow sales quarter by quarter but loses share.

    Personally I'd say a small percentage of a massive global market isn't such a bad thing.

    And if I have 20 friends who wish to share music (I have many more than 20 BBM contacts), I can have 500 songs for my $5 - 1c per song.

    I'd say that was pretty good value.

    Then again, I'm not trying to spin the story negatively for personal gain.

  • Report this Comment On August 26, 2011, at 12:51 PM, TMFRhino wrote:

    MAXwolf,

    "Here, this article, I don't know where to start"

    Please start.. His description seems very much in line with this service. I'm genuinely curious what you find so egregious about this.

    -Eric

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