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This is the first in a 3 part interview with Graeme W. Smith, V.P. Marketing of Oxy Systems the producer of phling!. Oxy Systems’ phling! provides a way for its users to access all their music and pictures stored on their PCs as well as free hosted music and Internet radio stations. Users can let up to six friends listen to the music stored on their PC but those friends can’t copy the music or access anything else on the sharer’s PC. In this post Graeme covers the motivation behind phling!, their target market and the business model.

What motivated you to produce the service?

Smith: The three founders of Oxy Systems are experienced mobile industry professionals with a background in developing mobile consumer applications. Our last company built voice portals and voice activated dialing systems that were deployed in many operator networks around the world including Sprint, T-Mobile, and AT&T. We sold that company in 1999 to Comverse and built up a very successful division within the company. When we left Comverse and started Oxy Systems we wanted to develop a service that operators could rapidly deploy and which would connect users to their music, their friends, and the wider community of music lovers - all while mobile!

Who is your target market?

Smith: Our target market is music lovers who want to have access to all the music on their PC while mobile, who don’t want to have to decide today what they might want to listen to tomorrow, who hate having to wait to get home to load music onto their phone, and who want to be a part of a community of like minded music fans. The demographics of this market range in age from 14 to over 29, but really it is anyone who wants to carry one device for accessing, music, communities, and communications.

What is the business model for phling! ? How do you plan to generate revenues, and is the primary distribution of the product planned to be via your website or via partners?

Smith: Our current business model involves working with mobile operators and sharing the revenue from the service. The operator promotes the co-branded service, bills the subscriber for the monthly fee, and zero rates the data so that there are no additional data charges. Oxy Systems hosts and runs the phling! service. Interestingly, we are also beginning to work with innovative major brand holders who want to go mobile and get in the hand of their customers. We launched phling! in Switzerland in July with our partner Edipresse. Edipresse is a French language media company with a number of publication brands. phling! enabled them to break into the mobile space, promote their publication brands, and generate revenue. In this model, we share the revenue with Edipresse and the operator. The service is available for 7 CHF per month on the Orange, Sunrise, and Swisscom Mobile networks and includes all related data charges. Those in Switzerland interested in trying phling! just need to send “EDI music” to 979.

Tomorrow we cover future product plans, competitors and challenges overcome.

Richard T.