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Summary:

When Cingular, the largest and generally the least aggressive U.S. carrier when it comes to new services, moves into a market, you know the market has been set to take off for awhile. Cingular will launch a mobile music service with deals in place with Napster, […]

When Cingular, the largest and generally the least aggressive U.S. carrier when it comes to new services, moves into a market, you know the market has been set to take off for awhile. Cingular will launch a mobile music service with deals in place with Napster, Yahoo Music and eMusic, says the WSJ. Supposedly the service will enable users to transfer those subscription music services as well as ripped songs via a cable, with over-the-air transfers set for next year.

Cingular is just the latest company that is looking to tap the mobile music market. Why now? A lot has to do with the availablity and the success of phones with music capabilities. Nokia says it sold 46.5 million music-enabled phones last year and has a target for 80 million this year. And we all know about the iPhone rumors.

While both the cell phone companies and MP3-device companies try to downplay the competition between the two sides, Jupiter Research says that the number of people that have cell phones that play MP3 quality songs will surpass the number of music device users beginning in 2009 in the U.S — though that doesn’t consider usage. The ongoing iPhone rumors, the underwhelming Cingular/iTunes/Motorola phones, the Zune’s WiFi capability, and Nokia’s increasingly sophisticated music-media devices all point to the fact that companies are trying to figure out what kind of converged and connected devices consumers will want for mobile music.

But while Jupiter says the iPod will reign supreme for at least the next 12 to 18 months in the U.S., there are so many big players in this market that Apple’s dominance isn’t necessarily assured in the long run. Cingular follows Verizon and Sprint into the mobile music market and Sprint says today that it has sold eight million songs through its Sprint Music Store. Cingular was rumored to be a launch partner for the much-speculated iPhone, but who knows how Cingular’s solo music plans will affect that deal (if there is one.)

Nokia is another major player that is investing a lot into mobile music, see “Nokia Starts its Big Music Push”. The company acquired LoudEye in August for $60 million, announced a music recommendation service and is working on services for discovering, purchasing and managing mobile music. Then there’s Microsoft, which is launching the connected Zune, but also provides its software for phones like Verizon’s music Vcast service — Steve Ballmer was at Verizon’s music launch event in Vegas — and it has its digital rights management. And Sony Ericsson has all those popular Walkman phones.

Outside of the U.S. the market is whole different ballgame. Carriers in South Korea and China are increasingly trying to become music media companies. According to Instat the size of South Korea’s mobile music industry has already surpassed the country’s conventional music industry, Japan will have $3.4 billion in mobile music revenues in 2010 and China $2.8 billion in revenues by 2010 (those figures include ringtones.) It helps when there is a really neglected music industry to begin with. In Europe the market is taking off too, and the European full track music download market is thought to reach 674 million euros ($857 million) by 2011.

E-Marketer puts the total global mobile music market at $7.5 billion by 2010 — no wonder everyone is trying to grab a piece.

By Katie Fehrenbacher

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  1. Finally carriers in the US are catching on. Check out http://www.p1sms.com an interactive radio product that should drive sales of these downloads on the fly.

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  2. To me, this is two separate issues. What you’ll see is Motorola/SE/Nokia/etc driving the market more than any carrier. If it’s easy for someone to drop 4GB of music on their phone, you’ll see some of that siphoning off the low-end MP3 players.

    Whether mobile carriers will make any money on this is another issue. Sprint’s cost per song far outweighs the convenience surcharge of double the rate of iTunes.

    If Motorola didn’t cripple their phone with that 100 song limit, you would have seen a siphoning of the iPod Nano/Shuffle market and help kickstart this industry. Oh well.

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  3. It is not that Cingular is the least agressive in rolling out new service, it is that they tend to just do a worse job of it than everyone else. They do all kinds of interesting things that they don’t bother to market and let die on the vine (for example, EDGE kicked everyone else’s ass for over a year before Verizon rolled out EVDO, but they never marketed it properly). Other things they market well, but don’t but enough effort into product development (these are usually things where the service is tightly integrated with specific hardware, like the ROKR).

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  4. [...] already knew that AT&T had a deal in place with Napster for the company’s mobile music service. Now the companies are adding some promotional details of the plan. AT&T’s broadband and [...]

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  5. [...] already knew that AT&T had a deal in place with Napster for the company’s mobile music service. Now the companies are adding some promotional details of the plan. AT&T’s broadband and [...]

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