Music on the move as mobile applications multiply

This past year marked the beginning of a revolutionary experiment to sell and distribute digital music to and from mobile phones. The stage is only just being set, with the business models, pricing and marketing issues still evolving.

Sprint and Verizon Wireless jumped in early with a la carte music services that let users download full tracks right to their phones, with a copy sent to their PCs. Sprint charges $2.50 per track, while Verizon charges $2. As of December 4, more than 9 million songs had been downloaded via the Sprint service. Verizon has not yet disclosed sales.

In October, Cingular Wireless introduced a subscription model, providing mobile access to existing services like eMusic,
Napster and Yahoo Music. Customers can't wirelessly download music yet, but they can transfer subscription tracks from their PC to their phones.

Once Cingular adds over-the-air downloading, expected early next year, the true test of whether a subscription or a la carte model works best on wireless will commence.

Cingular VP of consumer data services Jim Ryan believes wireless will rejuvenate the struggling music-subscription model. "We can double their base in the next 12 months," he says.

Sprint executives, meanwhile, seem content with the a la carte model, but haven't ruled out a subscription element in the future.

The more immediate goal for 2007 is to raise awareness of both models. Only 3 percent of mobile users say they've listened to music on mobile phones, so the wireless industry hopes that offering a broad portfolio of mobile-music services will spark consumer interest in 2007. A pending mobile-music service from mobile-phone manufacturer
Nokia could aid in that effort as well.

BEYOND THE RINGTONE

Aiming to raise the volume of the mobile-music message, wireless operators are creating a broad range of music-related services in an attempt to recast the mobile phone as an entertainment hub. Here are just a few of the music-related services and applications that gained prominence during 2006:

* Streaming radio: Sirius and XM Satellite Radio stations now stream multiple channels over such wireless networks as Sprint, Cingular and Alltel for a monthly fee. Others like MobiRadio and MSpot offer programming as well.

* Streaming concerts: Wireless operators have sponsored and hosted live performances by such acts as the Fugees, Josh Turner and the Pussycat Dolls and made them available for download or, in some cases, streaming live exclusively to subscribers.

* Concert tickets: Wireless leaders like Nokia and Verizon Wireless have begun experimenting with using mobile phones as a means to enter live events. Trials are under way that let fans buy their tickets via the mobile phone and receive a unique bar code sent to the phone's screen that can be scanned like a paper ticket.

* Lifestyle portals: Not content with letting wireless operators dictate how ringtones and other music content is offered to wireless users, lifestyle icons like Kevin Lyman and Tony Hawk are creating their own mobile-content portals focused solely on content of interest to their core audience.

Reuters/Billboard