AT&T Mobility (NYSE: T) is considering selling the Muve Music business it acquired via its $1.2 billion purchase of Leap Wireless and Leap's prepaid Cricket brand, according to a New York Times report.
The report, citing unnamed sources, said that AT&T has begun accepting bids for the Muve business. Other music services could potentially be involved in the auction, the report added.
Cricket spokeswoman Alejandra Arango declined to comment directly on whether AT&T was shutting down the service. "After a careful review, we've decided to explore alternative music options to Muve," she said in a statement to the Times. "For now, nothing changes for our Muve customers. They'll continue to enjoy their Muve experience at this time, as we evaluate alternative music options."
That's a noticeable shift from less than two months ago when Arango told FierceWireless AT&T and Cricket were working to bring their brands together and were focused on integration. At the time, there was no indication that Muve might be sold.
Leap launched Muve Music in 2011 and the service is currently offered for free in service plans for customers with Android smartphones. In a Securities and Exchange Commission filing made in early March, Leap said Muve Music was available to more than 2.3 million Cricket customers as of the end of 2013, "and is currently among the largest on-demand music subscription services in the U.S. as measured by the number of paid users."
Interestingly, Leap said last year it inked a licensing agreement to provide Muve Music to TIM Celular S.A. in Brazil. Leap previously announced it was working to license Muve to overseas carriers.
Muve allows Cricket customers to download an unlimited number of songs from labels including Universal Music Group, Warner Music Group and Sony Music Entertainment. Muve Music 4.0, which Leap launched in July 2013, introduced a new user interface designed to support more efficient navigation, highlighted by a new sidebar menu giving users immediate access to all core features. The redesign also allowed customers to play songs as soon as they begin downloading.
AT&T's reported plans to sell Muve could be due to the carrier's existing partnership with Beats Music. AT&T in January announced it would offer the Beats Music streaming service at a discount to its family plan customers. AT&T also pays to market for the service.
Muve has numerous competitors. Analysts estimate Spotify may have around 2 million paying U.S. subscribers, the Times reported, and Rhapsody recently announced that it has 1.7 million global customers.
As GigaOM notes, any potential suitor for Muve will likely face challenges because Muve customers have been able to get the service for free as a bundled component of their Cricket service plans. Convincing Muve customers, many of whom are low-income subscribers, to pay a subscription fee could be a difficult task.
AT&T plans to roll out service plans for the "New Cricket" sometime this quarter. According to a source familiar with the company's plans, AT&T will launch the refreshed Cricket service with pricing plans that are almost identical to AT&T's current Aio Wireless prepaid offering. It's unclear if Muve will be sold before or after that rollout.
- see this NYT article
- see this GigaOM article
Rumor Mill: AT&T's 'New Cricket' plans to start at $40/month, speeds to be capped
Sprint: Spotify is just the first - 'more to come' for Framily plans
AT&T to launch renewed Cricket prepaid brand in Q2
Cricket's Muve Music's fate is up in air following AT&T deal
AT&T's Aio launches 'Group Save' plans, taking a page from Sprint's 'Framily'
FCC approves AT&T's acquisition of Cricket provider Leap, with divestitures