Blog Post

Carriers Must Tackle Pricing To Make Money At Music

Pyramid Research points out that carriers add another level of complexity to downloadable music, which is going to create problems.
“Mobile carriers will wield all their power to become a key part of the value chain. Their main leverage is handset subsidization, but that’s a vulnerable leverage as handset manufacturers will increasingly partner with publishers like iTunes, Napster and Real Rhapsody, cutting operators out of the loop,” said Pyramid Research senior analyst Nick Holland. “There are too many parties in the mobile music value chain all vying for a slice of US$1 per downloaded song.”
Operators may be the first to be cut from the loop (as being the most extraneous) but will be able to push ‘over-the-air’ downloads to increase data revenue, but this will require that consumers accept the downloads will cost more than the $1 barrier set by iTunes.
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