Stats don't support hype: Digital music is ailing

No, I'm not saying Hyman is a con man. He's more like one of the good townspeople who think their kids can learn to play trombone. Digital music has not been kind to entrepreneurs. Other than Apple's iTunes, no digital-music company or service has provided proof that it is consistently generating significant revenue or profits. Pandora said in January that it saw its first quarterly profit last year but has been quiet about profits since. Even if there is a group of quietly successful start-ups somewhere out there, it is doubtful that MOG would be a member. MOG, a Berkeley, Calif., service that has been around in one form or another since 2005, launched a subscription music offering in December.

According to traffic statistics from media measurement company Quantcast, MOG's site topped 3 million worldwide monthly visitors a year ago, has trended downward ever since, and is now below 2 million.

The company hasn't fared well in consumer surveys either. Research firm The NPD Group takes a survey every quarter that it calls the "music acquisition monitor," Russ Crupnick, senior entertainment industry analyst said today. NPD analyzes four groups.

First, are music services that have awareness among consumers and high usage, such as iTunes and Pandora. Second, is a group with reasonably high consumer awareness, but less usage than the iTunes and Pandoras. That includes AOL Music and Yahoo Music. The next category has low usage, such as Slacker and Vevo, but are showing signs that the public is learning about them. The last category are services with low usage and low awareness, and that's where MOG is, according to Crupnick.