Radioactive: Ready or not, here comes mobile music

Move over, iTunes?
Written by Futurity Media, Contributor on

Move over, iTunes?

Mobile operators believe they can be the biggest music retailers in the country. Futurity Media's Stewart Baines reckons they may be right.

With people showing so little interest in buying CD singles, it was no wonder the compilers of the UK's singles charts broadened their horizons to include legitimate music downloads. Orange has clambered aboard this bandwagon with the news that users of its mobile music download service will have their purchases included in the main singles chart.

It's hard to imagine this currently having much impact, but cast your gaze forward five years. Imagine a music chart that does not include the four dominant retailers of music in the UK. That's where the major mobile operators believe they are headed. They, rather than iTunes, Amazon, Tesco or eBay will be the ones to pick up the mantle from HMV, Virgin and Woolworths as the nation's largest music retailers.

While CD sales still dominate music - roughly 237 million were sold in the UK and 666 million in the US - digital music is muscling in on the action. According to Nielsen Soundscan, 140 million tracks (not albums) were downloaded legally in the US last year. The mobile industry, not surprisingly, wants a Homer Simpson-sized slice of the pie.

Vodafone and O2 have announced they aim to provide a library of 500,000 tracks for downloading and purchasing via their mobile phones, while T-Mobile and Orange have similar ambitions. Nokia has developed a platform for smaller operators to join the mobile music mayhem - Nokia will arrange the publishing rights, host all the songs and process transactions, leaving operators to paste their own brand to the front of it. Handset vendors Motorola, Sony Ericsson, Samsung and Nokia all have music mobiles in the shops or in the pipeline.

The major record labels are playing their part too. Most have signed up with operators, though few are foolish enough to agree to exclusive deals. They've seen CD sales slip so far they need new outlets and the threat of illegal music downloads has encouraged them to realise that the monopoly on the medium (CD, tape or record) has come to an end.

Meanwhile, everyone is playing catch-up with Apple's staggeringly successful iTunes Music Store. While no UK figures are available, iTunes has racked up 300 million downloads around the world. In the Nathan Barley-strewn gyms of London's Shoreditch, almost every gym bunny clings to their funky iPod like it's the only thing keeping their deadened legs pounding through the miles. Can you imagine one of today's mobile phones taking such a beating?

Mobile operators are in a prime position to capture this market: they have an existing billing relationship with at least 10 million customers; they have a device that can support music (although much can be done to improve the device); they have the scale to negotiate with record labels on prices and placement within the music portals (in fact, they could really bully the labels); and they can allow songs to be bought and downloaded any time or place, more so even than online retailers, which require a PC-based internet connection.

Though mobile operators currently have the price and usability of music downloads all wrong, they can, to an extent, take their time getting it right. Today, operators charge around £1.50 per track, while iTunes charges roughly half that. While Vodafone and O2 have announced plans for a 500,000-track library, they currently only rack up a fraction of that, while iTunes has 800,000 different songs to download. Many of the operators are using proprietary standards on devices that will soon be obsolete; iPods continue to gain critical mass without the fears of lock-in or obsolescence.

So far, mobile users haven't exactly flocked to music downloading. But that's largely due to devices. What mobile phone has the style, ease of use and huge memory of an iPod? The mobiles with music players currently on the market cannot compete toe to toe with an iPod - or any other MP3 player for that matter.

When O2 launched its Digital Music Player, a standalone device that connects via infra-red to an O2 phone, it was largely ridiculed for being off the pace, featuring just 64MB of memory, enough for a handful of songs. At £100 it competes with flash-based MP3 players featuring 1GB of memory. And at £200, you can have a 20 or 40GB player.

The mobile handset vendors are beginning to learn from the new wave of consumer electronics firms such as Apple, iRiver, Rio and Creative that are doing so well with MP3 players.

Motorola already has plans to incorporate iTunes into a handset, though in March the launch was indefinitely postponed, following rumours that a number of powerful operators leant on the US manufacturer.

Sony-Ericsson is dredging up the Walkman brand for one of its new mobile phones. Pound for pound, it will be one of the better music mobiles on the market, featuring 500MB of memory and a 30-hour battery life. Samsung is rumoured to be readying a music mobile with on-board multi-gigabit memory too.

So does the public want a converged device or a separate music mobile, gaming mobile, TV mobile and email mobile? It's too early to tell. We are still to see what the MP3 player vendors will respond with. Maybe a wireless iPod is on its way?

Whatever form the devices take, it's fairly inevitable that mobile operators, with their existing payment relationship with customers, will be a fierce match for online music retailers, who are already looking old before they have had time to mature.

Stewart Baines is a freelance journalist and director at Futurity Media.

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