Music Streaming Service Targeting Older Consumers Set For IPO
Roxi, the Spotify and Apple Music competitor that musicians Cheryl Crow and Robbie Williams own shares in, is reportedly planning an autumn IPO at a proposed valuation of £50 million. Roxi’s target audience is largely an older, less tech literate and smartphone-focused demographic. Rather than an app on a smartphone, tablet, laptop or smartphone television, Roxi’s streaming service works via a device that is plugged into a television in a similar way to an Amazon Fire Stick. A remote control is then used to navigate through menus and content options.
As well as its streamed music catalogue, Roxi also offers a karaoke option and games. Roxi retails at £99.95 with the price including both the hardware of television plug-in and remote control and a 12-month subscription to the music catalogue and add-ons. Thereafter, an ongoing monthly subscription is priced at £5. That’s around half of what smartphone audience-focused rivals Spotify and Apple Music charge for their monthly descriptions.
Roxi’s founder is serial entrepreneur and Cambridge graduate Rob Lewis. Prior to founding his latest venture, Lewis founded and ran media businesses the Business & Technology magazine, Cromwell Media and Silicon Media Group. He also had an earlier foray into music streaming through rara.com, which ceased operations in 2015.
Lewis has described his ‘eureka’ moment for Roxi as wanting to get his parents a music streaming service as a Christmas present. He said he realised they would struggle to navigate the interfaces of popular choices on the market whose ‘intuitive’ user experiences were designed for a younger, tech-savvy demographic. Convinced making the planned gift would result in him constantly having to adopt the role of technical support, he came to the conclusion that to tap into an older demographic, music streaming needed to be offered in an ‘out of the box’ device that could be set up in 2 minutes.
Roxi is able to offer a music catalogue that rivals that of Spotify and Apple Music, if lighter on hits currently in the charts, at a considerably lower price point because of deals that Lewis was able to negotiate with music labels. He said they are keen to access an older audience and understand that the streaming format offered by Roxi is highly unlikely to cannibalise their existing partnerships with the major streaming services so agreed to discounted royalties arrangements.
The Roxi IPO, which will see the start-up list on the AIM sub-exchange of the LSE, will be overseen by Arden Partners. Capital raised is earmarked for advertising designed to expand Roxi’s UK user base as well as a push into the larger U.S. market.
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