Audiogalaxy takes on Pandora with P2P radio

Seattle-based music startup Audiogalaxy launched a personalized radio service Monday night that uses a P2P approach to compete with Pandora: music for Audiogalaxy’s new personalized radio stations is streamed directly from user to user without ever being saved on the company’s servers. That’s similar to what Audiogalaxy used to offer more than ten years ago, when it was used by millions of file sharers to access free music. The key difference is that this time around, Audiogalaxy is playing by the books.

The new service operates by the same rules as Pandora or any other non-interactive music offering. Users won’t be able to stream whole albums or pick and chose single tracks. Instead, it serves up personalized stations that are created on the fly. There are also limits to how often a single artist can appear on any station, just as with Pandora.

So why is Audiogalaxy using a P2P approach? The big advantage–aside from much lower bandwidth bills–is the catalog. Audiogalaxy users have access to rare mash-ups, remixes and live tracks not available on Pandora or Spotify for that matter. Audiogalaxy founder and CEO Michael Mehej told me during a phone call Monday that his company has more tracks than almost any competing service. “We have the Beatles,” he said as an example. “Spotify doesn’t have the Beatles.”

The huge catalog was also the main reason why file sharers loved Audiogalaxy’s original incarnation. However, record companies didn’t share that love and sued the service, eventually forcing it to shut down in 2002. Merhej went on to work for Microsoft, where he laid the foundations for the company’s cloud storage products. Then a few years ago he started to get back to his Audiogalaxy roots, and briefly worked on technology for a legal file sharing solution that was backed by some of the labels but never took off.

Audiogalaxy re-emerged with a unique take on music lockers in late 2010. The site has been offering its users the ability to access their personal music collection from their Android and iOS devices ever since, streaming directly from your hard drive to your cell phone. The new Pandora-like offering launched this week is building on the foundation of the personal streaming service.

Not only does it use users’ libraries to serve up music, but it also uses a whole lot of data based on these personal libraries to generate its stations. One example: users can simply enter the name of a city and Audiogalaxy will automatically launch a station based on tracks that are popular in that location. Merhej said that one of the big differences between the offering and his competition is that he uses his own algorithms and data to recommend music, instead of licensing metadata from third-party providers.

Another big difference to Pandora is that Audiogalaxy is completely ad-free. The company is offering access to its stations free of charge on the web. Merhej told me that he hopes to make the service attractive enough for users to get them hooked, and then charge a modest $ 4 per month for access through its mobile apps.

I had a chance to play with both the Web as well as the mobile version of the service Monday, and I liked what I saw. Pandora tends to gear towards the mainstream when listening to niche channel stations, but Audiogalaxy served up tons of music I hadn’t heard before. The local stations are also a nice touch. However, the Android app seemed a bit too cluttered to be useful, with too many options to access information about playlists and stations. Still, the new incarnation of Audiogalaxy is the closest it could possibly be to the original file sharing service–without the threat of being shut down.

Take a look at a few screenshots of the Android app below:

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