Blog Post

A Quick Rethink Over Mobile Music

It has been argued by Steve Jobs and widely accepted by most people except carriers and record labels that selling full-track downloads to mobile phones will be a minor part of the overall music business because the price is set at a pretty significant premium to online music — and in fact it will be almost impossible to get the price of music downloads to compete with the price of online music due to the higher cost of bandwidth and the extra players in the value chain…but that could be coming at it from the wrong angle.
Reuters has run another story about the increasingly heated debate between record labels and Apple over the price of songs on iTunes — the labels want to increase the price of music by introducing “variable pricing”, with the idea being that the songs that no-one buys will be kept at 99c but the price for popular songs would be increased. Staci over at PaidContent has done a good job of summarizing a webcast by Warner Music Group Chairman Edgar Bronfman Jr on this issue.
Irrespective of arguments on whether variable pricing is a good or bad thing for music sales, what if the labels win? What if Apple is forced to raise the price of songs at its iTunes store? Suddenly the differential between online music and mobile downloads becomes a lot smaller…although I doubt it will disappear. But if the latest Coldplay single goes for $2.99 at iTunes and $3.25 on mobiles that’s less than 10% difference, and suddenly mobile music is looking a much better proposition. Although music overall probably isn’t…
Related stories:
Cingular To Launch Music Download Service Next Year
Nokia Delays N91 Music Mobile Phone To Q1 2006
Mobile Music: The Good & The Not-So-Bad