Forbes:
John Paul DeJoria, the billionaire entrepreneur behind Paul Mitchell shampoo and Patron tequila is jumping into the wireless phone business.
His new company ROK Mobile (cofounded with British entrepreneur Johnathan Kendrick) is offering unlimited talk, text and data with an added sweetener of free music streaming. ROK Mobile is contract free and will cost $49.99 a month. DeJoria has inked music deals with Warner Music, Sony and Universal, giving users more than 20 million songs. Says DeJoria: “Everything you can find on iTunes, we have.”
$49.95 a month for unlimited talk, text, data and music is a price disruption.
People spend an average of $82 a month on their phone. If you pay more for music and data, your phone bills in the hundreds.
ROK Mobile is a mobile virtual network operator (MVNO), riding on the rails of T-Mobile. They make their service relevant by bundling in streaming music. This model has been tried before. GigaOM:
There’s definitely already a forerunner for this kind of business model. Regional operator Leap Wireless launched Muve Music, a subscription song download service included in its higher-end mobile plans. It had a hit on its hand, growing to 1 million users in two years, making it the second largest subscription service in the U.S. behind Spotify despite the fact it was available only in Leap’s limited regional footprint. (AT&T bought Leap and is now looking to sell Muve.)
The devil is in the details of the music app:
Key to that strategy will be ROK’s music app. It built the service in-house with a development team drawn from the entertainment and mobile industries and it aims to combine many of the best elements of other streaming services on the market, René said. As with Spotify, ROK customers will be able search and stream any song, create playlists and collections and download music for listening when no data connection is available.
ROK is also using algorithm-based personalization technology like Beats Music and Pandora to offer internet radio services based on specific songs or artists as well as music recommendations.
Sound familiar? This is part of the reason Apple bought Beats. The mobile music industry is gearing up for another wave of disruption. It’ll be interesting to watch this unfold.