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Rara up for sale

By | Published on Monday 16 February 2015

Omnifone’s consumer-facing streaming service Rara is up for sale, the parent company’s CEO Jeff Hughes told Music Ally last week. But this is not a sign that his company is in trouble, he insisted. launched in 2011, aiming to lure more mainstream consumers who were still unsure about streaming. Omnifone claimed at the time that it was “designed specifically for the mass market who still use CDs”. The service was latterly spun off to become a separate entity, with various staff members moving over to the new business, but then last year the operation was brought back in-house. And now Omnifone wants to sell it.

Of the service, Hughes said: “Rara’s still going today, but Omnifone took control of Rara about a year ago, mainly to make sure that we could run it at break-even or at a small profit. Previously, it was a completely standalone company with separate management which ultimately wasn’t able to fund it. We took back control, and it now runs at about break-even”.

He added: “We’re trying to sell Rara, to be perfectly honest. We’re a B2B company, so we don’t want to run it: it’s not our thing. We’ve nurtured it along and kept it going, and hopefully we’ll find a buyer. If we don’t, we won’t keep it going forever, but it’s a good service and I’d like to see it in the hands of somebody who can market and grow it. That’s not us”.

There has been speculation over the B2B side of Omnifone’s business of late, following the loss of some big clients, not least Sony Corp which announced it was shutting down its Music Unlimited platform on 29 Mar.

But Hughes says that his company had been preparing for this for some time, well aware that Omnifone had, in the past, relied too much on a few key clients.

“We knew there was a lot of concentration of revenue with our big partners, so we started trying to lower the cost of entry and build everything into the cloud so it’s scalable”, he said. “We have signed six new clients in the last six months, and two are companies larger than Sony in their size and ambition in the music space: massive global companies that fit the type that Omnifone is known for serving”.

Read the full interview over at Music Ally here.