[by James Quintana Pearce]
The mobile music market is being hindered by industries with vested interests, according to Alberto Montesi, CEO of Flycell, the US subsidiary of Acotel Group. Flycell sells mobile content, mainly ringtones and other personalization content, and is the company that recently signed a deal with the Naked Cowboy. I had a chance to interview Alberto Montesi on the current mobile music market and where he thinks it is heading… Flycell is currently in negotiations with major labels and artists to sell full-track songs and hopes to launch the service in September, but has some problems to overcome.
Mobile content providers are having a pretty tough time at the moment as bigger players take large slices of the mobile content pie, and companies keen to sell mobile music have a particularly tough time. “Labels and publishers are not helping the growth of the market”, said Alberto Montesi. “They’re asking for too high a revenue share, and a minimum guarantee for each download which is really high“. He reported that the labels typically ask for around 50% of the end-user price, which is about 100% of the money received by third-party sellers after the mobile carriers take their share. The labels also require a minimum of $1 per download, which already puts the price at double that which customers are used to paying on the internet.
“Selling real music you’re going to lose money…unless you’re a carrier because the economics are different,” said Alberto Montesi. Carriers can invest in marketing to retain customers because content is not their main money driver. “At this stage the labels are not understanding how important it is for third parties to sell musicâ
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